Walking Away From Mortgage: What to Consider
Walking away from your mortgage has become a trend as more homeowners find themselves underwater -- that is, their home is worth less than their mortgage. But as Ann Brenoff explains, at our sister site, WalletPop.com, you need to know the consequences of strategically defaulting before making the leap.
As home values slip below what people owe on their mortgages, people are strategically defaultingon their loans. Why? Because in some cases, it makes good business sense to walk away from a bad investment -- just like the banks do all the time.
Of course banks like to beat their chests about how walking away from a mortgage will ruin your credit. Truth is, having good credit may be a luxury that no longer makes financial sense for your family -- right up there with taking vacations to Europe and leasing a new car every year.
We spoke to various mortgage and credit advisers, all of whom advised that walking away cavalierly from a financial loan obligation may be injurious to your financial health. But if you are going to do it, they quickly add, do so prepared: