I bought my house for $457.000 It is now worth $250.000 and still dropping. Should I try to stay or just bail ?
My payment is $4050.000 a month
- 1 decade agoBest Answer
Bail. You will spend $250,000 (mortgage payments) in the next five years on the long shot that you will have gotten back to your purchase price.
THe problem in the economy is based on mortgages not being serviced (paid). Originally, these were subprime loans but now they are the loans of "regular" (Alt A ) homeowners. Defaults on loans means banks take over those houses and eventually sells them at a loss. This in turn lowers the price of homes in that neighborhood and more people are "upside down" in their home loan to value. Which leads to more foreclosures and we are in this viscious cycle. You need to make a Financial decision. The bank agreed that the house was "worth" the loan they gave you. THEY TOOK A RISK. You put something down, I assume, so you have a risk/loss as well. The guy who tells you to refinance must be on Mars...or have no understanding about the credit/liquidity problems in the market today. You should SAVE the mortgage payments you stop making and extend the time you live in the house. Your credit rating will take a hit, but you can rent cheap now with the housing inventory at an all-time high. (at least in "bubble" state which it appears you are in). This is happening in $500,000 - $900,000 houses in FL. Stop throwing money at a doomed deal.Source(s): www.ml-implode.com
- DavidLv 51 decade ago
You should talk to your financial advisor because you need more in the equation that what you're provided...
...but unless you're having trouble making payments, I'd say stay. If you sell, you know you'll lose $207,000. If you stay, you have a place to live, and it could go up.
Questions - forget current price - what's the house worth? Will your market recover? Are you earning well or getting into debt? Where will you go if you sell? Will you buy cheaper or rent? And so on...
- SmokeyDLv 61 decade ago
$4,050/month? Holy smokes! You need to refinance into a better loan for starters. Second, if you plan on staying in your home for the next 10 - 20 years, the value will return and surpass the amount you initially paid. Real estate is a cyclical market. You just happened to buy in when the market was up. Best of luck to you.
- 1 decade ago
Did your employment change?? Just because the so called "value" of your home is less now it will recover, but that is not the real question. The question is can you still afford the payments. If your income hasn't changed and your finances are ok, stay put and wait it out.
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- Anonymous1 decade ago
Well depends if you can afford the payment an wheather you want to lose $200 000, I would sit on it personally if you can, it will rise in value again.
You selling will only add to the drop in the market.Source(s): http://www.investment-for-beginners.com