Why You Should Keep Your Underwater Primary Home than Opting to Rent

Why You Should Keep Your Underwater Primary Home than Opting to RentHome values have dropped, your neighbors have walked away from their homes, and you have a mortgage balance that is larger than the value of your property. What are your options other than following the masses of stop paying your mortgage payment and opting to rent.

Rent inflation is a result of the large strategic default and foreclosure rates. The landlord or real estate developer recognizes the demand for rent and are inflating rent prices. In popular areas, rent rates have gone up a minimum of $200.00 from six months ago, for the same unit. Because there is a demand for rent, there is also a demand for good credit to rent and larger deposits. Consider that rent may not be a smart option for your household.

What are your options other than “Walking Away” from your Home?

  1. Keep your property; home ownership is better than renting. Negotiating with your lender about your financial hardship is a simpler process than asking your landlord to modify your rent payment. In addition, homeowners have larger tax benefits than renters do.
  2. Ask for a loan modification.
  3. If your loan modification gets declined, apply for HARP, HARP 2.0 or HARP 3.0
  4. Sell your non-performing investment properties. Short sale your investment properties and only keep your primary residence.
  5. If you have overextended your personal or business debt, settle your debt or enter into a credit counseling program. File a Chapter 7 or Chapter 13 only as your last resort and reaffirm your primary residence in the bankruptcy filing.
  6. Start a new budget.

It’s true, homeownership is not for everyone. Nonetheless, homeowners should not follow the masses of strategic defaulters.

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