Already on ArticleSlash?

Forgot your password? Sign Up

Walk Away from Mortgage - When It Makes Sense to Turn Your House Over to the Bank

 


Visitors: 1,186

Should you walk away from your mortgage? You should only walk away from your mortgage when it makes sense to turn your house over to the bank.

The first requirement for you to walk away from the mortgage is that you must be “upside down. " That is, you must owe more than the house is worth.

The second requirement is that there is no hard money lender available to purchase your home. If you can arrange a “short sale" this is a better choice than walking away from the mortgage.

The third requirement is that the bank won't grant you a “Deed in Lieu of Foreclosure" (DIL) If the bank will accept title to the house in exchange for eliminating the debt in full, you don't have to leave a vacant home ready for foreclosure.

But assuming that you owe more than the house is worth and cannot arrange a short sale or DIL, you may just want to walk away from the mortgage.

There are some things you should know though.

First, when you walk away from the mortgage, you are guaranteeing that you will have a foreclosure on your record. The foreclosure stays on your credit report for seven years. Most experts agree that you cannot get a new mortgage for at least four years after foreclosure.

Second, if you live in a state that allows for deficiency judgments, the bank can hit you for the difference between the amount owed and the auction price. This means that in addition to having the foreclosure on your record, you may also have to declare bankruptcy to protect your income and any other assets. Then you'll have the deadly combination of both a bankruptcy and a foreclosure on your record.

Third, recognize that you can stay in your home rent and payment free for a period of time. If you just walk away from the mortgage, you may be paying rent on a new place during a time that you could be living payment free. This might give you a small nest egg for the future.

If you're thinking you might just walk away from your mortgage, you need to get the new free report The Foreclosure Survival Guide which outlines the foreclosure process and details your many options. Homeowners faced with foreclosure need information to make the right choices. Get your copy of The Foreclosure Survival Guide today.

(419)
Tags:
,

Article Source:


 
Rate this Article: 
 
Five Reasons Why an Internet Business Makes Sense
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

Fashion Sense That Won’t Break The Bank For The Gentlemen

by: Adam Leaf (November 15, 2010) 
(Shopping and Product Reviews/Fashion Style)

Fashion Sense That Won’t Break The Bank For The Ladies

by: Adam Leaf (November 05, 2010) 
(Shopping and Product Reviews/Fashion Style)

While Experts Confuse, Here's a Common Sense Strategy You Can Take to the Bank

by: Rick Osbourne (February 25, 2008) 
(Health and Fitness/Obesity)

Doing What Makes Sense

by: Adam Singleton (August 12, 2008) 
(Insurance/Life Annuities)

It Makes Sense You Just Have to Be There!

by: William Wade (July 12, 2008) 
(Business/Marketing)

Why LTL Freight Makes Sense

by: Dean McNeely (May 01, 2008) 
(Business)

Why Starting a Day Care Makes Sense

by: Fiona Lohrenz (March 17, 2008) 
(Home and Family/Babies Toddler)

LG U830 - Fashion that Makes Sense

by: Alice Erin (June 24, 2007) 
(Communications/Mobile Cell Phone)

Equipment Leasing Makes Sense

by: Duke Adams (May 13, 2008) 
(Finance/Commercial Loans)

Five Reasons Why an Internet Business Makes Sense

by: Nate Ohman (July 18, 2008) 
(Home Based Business)