I always wanted water front property. I always wanted a pool. I just never wanted to actually be under water. Unless you are living under a rock, and in that case, you really don’t need to read this article, you know that mortgage foreclosures and delinquencies are at an all time high. Many homes are sitting vacant and still technically haven’t gone through the foreclosure process to be included in that foreclosure data. How many people are paying their mortgage, but are struggling every month to make that payment? How many people, who are under water, wonder if they should keep making that payment when their house is worth so much less than what they owe? Combine those two realities and it becomes especially poignant.
If what I have said so far has struck a cord with you, please know, I am not judging. I know everyone’s situation is different. In fact, every single one of my family members and close friends has suffered from this crisis in a different way. Not everyone has a choice, but some have to make a choice and this is who I am speaking to . I hope people remember that the choices they make today will effect them for the rest of their life. Suddenly, I am hearing people on t.v. talking about how it is better to rent than to own. I just don’t understand this. For all of our lives (not just the last five years since this crisis has happened) we have always been taught, nay, we have always known, that owning is better than renting. Call me cynical but maybe some of the t.v. powers that be own rental property. Since when has anyone ever thought that it was better to rent than own? It has always been the American Dream to own a home. Yes that dream went to an extreme, but does that mean we go to the other extreme? People are just walking away from their homes everyday, and renting because its is less expensive than their mortgage payment. Maybe it seems to make sense to walk away and pay less to rent than own, but what does that really do for you?
You will probably be paying rent for seven years. Its hard to estimate cost of living because every state is different, but let’s say you pay $1200 in rent, which let’s face it, if you have a family, is pretty cheap. In that 7 years it would take you to be able to qualify for another house, you would have thrown over $100,000 out the window. Now it sounds great to convince yourself that you will take the money you save on the mortgage payment and put it away to pay cash for a smaller lesser home, or for a down payment on another mortgage. You will convince yourself that you will put that money away and earn interest and come out way ahead. You will tell yourself you will save tons of money for that next house which you will now have to put a 20% down payment on, which by the way, you may not have had to pay on that house you walked away from seven years ago. If you can do that, then kudos to you, but people tend to live within their means. If you have the extra money to save, you will save it for a while. Then you will start to add back all those things that you cut out when you were tightening your belt to pay that original mortgage. Then your car will break down, or your kids will need braces, and don’t forget about car insurance for your 16 year old son, and a car, and college, your daughters wedding, Oh, and by the way, you will need a good retirement fund because instead of your house being paid off like most people when they retire, you will still have a house payment because you lost seven years. You will also, be paying a high interest rate because if the banks can take advantage they will, and they aren’t going to give you a good rate with a history of a foreclosure.
I can not make Nostradamus like predictions of what this will be like in five, seven or ten years. I don’t know your personal situations. You know if this speaks to you or not. I just feel like America has always been strong and we need to stay that way. It is understandable. We have developed some kind of collective depression about the economy. We have always had so much. And, when you have so much it is hard when it is taken away. What we need to realize is we still have so much. We need to fight to keep it. We need to live for our future and not just today. So if you are considering walking away, just remember how lucky you were to get your home. If you choose to walk away, don’t think it will be so easy to get the same thing later, and don’t just live like everything is going to be this way forever. Realize that things will get better, and if you can get through it, a few years from now you will still be living the American Dream.