Loan and Equity Help

Financial struggles and trouble making the mortgage payments is common, what is the right decision continue to use up what money they have left in reserves or save the reserves for their families. The latter has a high risk of derogatory credit and foreclosure. So the burning question when faced with this dilemma is “Should I stay or should I go” or should I refi my home?

The facts are that many people took cash out, borrowed more than they can afford, took teaser rates, or applied using some form of a stated income loan which would often over inflate the borrowers actual income through the home refinance or home purchase process. World markets are in chaos, we are all finding it increasingly difficult to make the payments, and they have run out of options. When a borrower decides to vacate the property the bank is just taking the house through foreclosure. Is this the right decision?

I don’t have the right or wrong answer here but I do know that up until the 90’s most people bought a house as a place to live and somewhere to stay and raise a family.We all know that is true despite it being an “old school” way of thinking.With national home values increasing faster than expected in the 1990’s to 7% a year; it started a trend.  Lending practices began to recover from the S/L crisis and a new way of thinking was born in the lending world. Are you still breathing?What is your credit rating? Then we can presume you can pay for a home.With that in mind you might be able to say stated income and teaser loans were common, due to a housing prices from the mid 90’s.Now you have an Achilles heel with outrageous home value increases and people scrambling to spend that money of high priced toys. Most used the money to “keep up with the Jones” purchasing big ticket item they really had no business of buying in the first place.

Fast forward about 10 years to 2008 we are all faced with the dilemma should I stay or should I go.If I leave the home I might be able to buy it back and home values should be lower by then.  This is all true you can walk, you could buy your home for less, but do you really want to?Despite the huge amount of economic news and political banter, we all need to understand that it was a contract we all signed.   Again You knew what you were doing when you took the cash out home refinance, you knew what you were doing when you bought the home, don’t bring everybody else down even further as somewhere along the line we must just stop this madness.Remember the historical significance of American fortitude, we have always fought for what we feel is right; and now we need to fight for our right to save our homes.