Hond Financial

With millions of Americans facing financial hardship and difficulty making their mortgage payments, there comes a time when a homeowner has to decide whether they should continue to make their mortgage payments and burn up their reserves or stop making the payments and conserve their cash savings. The latter deteriorates your credit and will expose you to a possible 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. The stumbling economy and a significant loss in home values, no wonder people are becoming trapped under mortgage payments they can’t pay and a home they can’t sell. There are a lot of people that are leaving their homes and just giving the properties to lenders. Is this the best option?

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.That might be a Walton’s way of thought but sometimes the truth hurts.It was a shock to some to see national home value increase seven percent a year though the nineties.  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?  Do you have a credit score? Obviously you can afford a house.By then home prices were lower and stated incomes supported those prices; with that in mind it could have been okay for stated incomes.Now you have an Achilles heel with outrageous home value increases and people scrambling to spend that money of high priced toys. The blame lies with borrowers that used their homes equity like an ATM machine to buy the luxury item they desired.

Fast forward about 10 years to 2008 we are all faced with the dilemma should I stay or should I go.  If I walk from my home I can buy another house in two years(in theory) based on current lending standards which if property values keep going down I can buy another house or maybe even buy back my existing house at half the price I used to owe on before I walked.  This is all true you can walk, you could buy your home for less, but do you really want to?Several media and news stories have put a spotlight on a home market on life support, but the truth of the matter is everyone agreed to the terms because they suited the borrower at the time.   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.With the threat of a depression looming it is time we all take control of our homes and neighborhoods to ensure we avoid foreclosure.

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