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I wanted to get some input on this subject. My name is Brian and my wife and I have two kids. We pay our bills every month on time and have good credit. I work full time my wife works part time so she can stay home with our kids. We purchased a house in Washougal 2 years ago which has a view of the Columbia river and is a Rockford home. We purchased the house 2 years ago which was brand new at $273,000.. before we moved in it got appraised at $330,000. We thought it was a good move as it seemed at the time we had some Equity (not bad before we moved in!). Needless to say, the builder (rockforhomes) and there so called CC&R's and had wording of not allowing more than 10% investors in our track.. Well 2 years have passed, half the track are renters, several are investor homes,, and a few of us are actual home owners. We bought in an upscale neighborhood that literally crashed…. We have one of the nicest homes in our track and have put in roughly 20K in landscaping.. Now we have been hit by the market.. like everyone else.. only thing different is our track is a "special case" We have quick sales, foreclosures, renters.. thanks to the quick sales our home values has plummeted.. We currently owe 290,00 our home due to upgrades (deck, Landscaping, bills etc).. Other homes in our track are selling now for 220,000 (quick sales) same models, some situations bigger houses..... so thanks to this, current home sales (comps) don’t help our cause….at this point I’m pretty certain we are upside down now.. Makes me sick to see me paying 1800 every month knowing our neighborhood will take years to rebound, what incentive is it to pay on a home when as of today you’ll never get that money back.. . the thought of walking away as entered my mind but my pride is getting in the way.. my wife and I want to do the right thing but family comes first.
With the economy now, gas, food etc.. we are struggling every month, we used to get by just fine with just my income.. but now a day’s things are different….
If you have any input it would be great, even if its negative. Again I appreciate you taking the time to hear our situation.
Last edited by Tannersdad; 08-03-2008 at 09:35 PM..
Reason: Because of Font Errors
Take a deep look at your spending habits and see where you can tighten up.
Review your homeoners and auto insurance and make sure you have the right plans....Sometimes increasing your deductibles can lower your monthly payment. Keep every penny in your pocket that you can!
Don't buy stuff you 'want', only your weekly needs. Change cable/phone/internet to more economical plans. Or one step further & eliminate and use the library for internet, check out movies, or SHOCK! books
If you have too much credit debt, see if you can consolidate it.
Is it literally costing y'all money for your wife to work? Would you save money on food, gas, clothing, car ins, & maintenance if she didn't?
Do you spend too much eating out for lunch, or dinner? Have simple meals in more often ,take leftover or brown bag lunches. (let going out be an occaisional treat though)
Check out thrift shops to save on clothing costs.. Kids grow too fast and you can find almost new stuff far a fraction of the new price.
Clean out your home & organize. Make a 'fresh' start. Have a yard sale or put stuff for sale on Craigslist. Put the proceeds in a separate account and start an emergency fund if you dont' have one...always keep a little tucked away and add a little as you can...even $5 a month.
More than likely you will itemize on your taxes...gotta have over 10K + married filing joint...based on your mortgage amount you mentioned you will be there...if you walk, you won;t have that, and less of your hardearned dollars will work there way back to you.
If you walk, how much will rent be? will you stay in a familiar area, same schools, etc?
Would you really 'save' in the long run if you walk? Can you live with yourself???
I hope you can work it out the best way you can for you and your family. Blessings and the besk of luck to you.
If you have good credit and an afford the payments you should stay put. Eventually the market will come back your homes value will increase again.
Just by walking away, you would ruin your good credit. If you ruin credit it will make your insurance higher, hurt your ability to get a car loan, prevent you from buying a house again for at least a couple of years, affect your ability to get loans to send your children to college.
It's more than just walking away from a house. If you situation has changed and you can't make payments anymore then you need to at least do a short sale because that won't hurt your credit as much.
Thanks for your responses.. The reason we are entertaining this thought is we are paying 1800 + mortgage...its not a problem to pay..infact i paid a bit more to work on paying down the balance... Its not just the market.. i can handle that..not much that can be done on that... we all are in that boat..the part that gets me is were paying on a house that we owe more then its worth.. like 50K, because of the builder not following there own CC&R Rules.. Now we have investor properties, quick sales.. I just feel like our money is going no were and is working against us.. not even sure this is the right thing.. i have my doubts but wanted to see others input.... The object is to buy a house and make money on it eventually.. but if you are in a house that is perhaps working against you.. what do you do?.. Selling right now is out of the question..because of the local comperable sales..is it smart to just sit this out and see what happens?
If you have a fixed rate mortgage that is great! IMO If I were you, instead of paying extra on the principal, I would start tucking that away in a savings acct. some where. I'd say invest it , but I have no idea on what. Heck a christmas club account.
Maybe the builder was just doing an initial offering on owner occupied homes? I don't know how much contriol they can really have on who lives in the neighborhood. Maybe one of our riesident RE agents can chime in on how those things might work.
Is there a Homeowners Association? Any rules other than icty or county in regard to upkeep of property?
Again Try to stay in your home. You don't seem desperate, just concerned.
The sky is always falling..somewhere. Just imagine yourself a big ole umbrella and crawl under it and wait the storm out. Live, laugh and love...or you are going to drive yourself bonkers thinking
all these whats, ifs ands or buts
Thanks for your responses.. The reason we are entertaining this thought is we are paying 1800 + mortgage...its not a problem to pay..infact i paid a bit more to work on paying down the balance... Its not just the market.. i can handle that..not much that can be done on that... we all are in that boat..the part that gets me is were paying on a house that we owe more then its worth.. like 50K, because of the builder not following there own CC&R Rules.. Now we have investor properties, quick sales.. I just feel like our money is going no were and is working against us.. not even sure this is the right thing.. i have my doubts but wanted to see others input.... The object is to buy a house and make money on it eventually.. but if you are in a house that is perhaps working against you.. what do you do?.. Selling right now is out of the question..because of the local comperable sales..is it smart to just sit this out and see what happens?
1) The purpose of a home is to have a roof over your head, a place to come home to after work, a place for your family to gather and sleep
2) If you looked at it solely as an investment perspective, well, all investments carry a risk and sometimes you lose money on those investments.
3) If you feel the neighborhood isnt safe anymore and you want to leave, then the right thing to do would be sell it and bring money to the table to close on it.
4) One thing I don't understand is what does a person being upside down on their loan obligation have to do paying it back? Why does it matter? Don't people buy cars w/ zero down or like 5 grand down and the moment they leave the lot, the car has depreciated like 20% making them now upside down on their car? They don't just walk away from their car loan obligation because of that.
I'd like to add, if you lost your job or got a paycut or something and can't afford the payment, then that's different. But in your situation just stay put. If your family is safe and everything else is good, then don't stress about the house.
As for gas and food prices increasing, we are all feeling that. Everyone is dropping their daily lattes, eating out, going to the theater etc.
Unfortunately prices are rising and our salaries aren't keeping up.
You asked nicely Tannersdad, so I will respond in kind
You are not alone in this situation and this is NOT the first time in history that homeowners have been upside down in their mortgages . I was upside down myself back in 1997 and walking away from my home/mortgage was never something that I considered doing. And ~3-4 yrs later, the market did turn around in my area and everything turned out just fine . That is always a possibility for you also . Appreciation is NEVER a guarantee in real estate, but obviously, it is what we all hope (and pray ) for!
Unfortunately, the climate now is one where many people seem to feel NO moral obligation to repay their debts . In fact, I personally know of several individuals that are in even worse situations than you state ! Not only are they upside down, but they have extracted all the equity from their homes and have huge unsecured debt to boot! All of the people that I know though, have gotten themselves in this situation by very poor money management - living way beyond their means and their incomes . The housing bubble popping just caused their fiscal irresponsibility to finally be exposed .
The very thing that you are thinking of doing, along with hundreds of thousands of others like you, is actually 'causing' the housing market to continue it's downward spiral. The more houses that flood the market, the lower prices go. The more people who walk away, the less buyers there are to buy all these homes and this causes housing prices to decrease even further . Think about it. What IF all the other homeowners in your neighborhood decided to just walk away because they were upside down??? How low do you think the homes would go then? Now imagine this scenario played out all over the US .
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You asked nicely Tannersdad, so I will respond in kind
. That is always a possibility for you also 
) for!
. In fact, I personally know of several individuals that are in even worse situations than you state 
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