In this wacky real estate market, new things pop up all the time. One of the recent trends catching on is for homeowners to literally walk away from their mortgage. These are homeowners who decide to stop paying their mortgage and remain in their home until their lender forecloses.
We will say right up front: We don’t condone this.
In fact, if you don’t have to move and you are not in financial difficulty, the best thing to do is sit tight and wait until the market is more on your side.
Still, we’ve seen our fair share of frustrated homeowners ready to give up because they are severely upside-down on their mortgage or because they have tried to sell with no serious offers for months (in some cases, years!).
For you homeowners who have entertained the thought of walking away from your mortgage (even for just a fleeting moment), an attorney who is also a real estate broker has written a white paper worth reviewing on the pros and cons of walking away from your mortgage. It also lists some options to walking away.
Here’s the thing … If you are like many Atlanta area homeowners and you are upside-down on your mortgage, the author strongly recommends pursuing a short sale. But a short sale assumes you’ve found a buyer in this market. And a short sale assumes that you are ready to endure the typically long and drawn out process of getting a short sale approved by your lender.
Homeowners who have to move and are thinking about walking away have another option that is often missed: Buy yourself some time to let the market rebound and let someone ELSE pay on your mortgage in the meanwhile. In a word, rent.
Yup, we said the taboo word, rent. Rent your home to a responsible tenant that makes the mortgage payments for the next 12 – 24 months while you move on. At the end of the lease term, if the market has improved in value, sell at that time. Ideally, sell to the tenant who has been living in the home.
What if you’re moving out of town? What if you don’t want the hassles of being a landlord? What if you simply don’t have the time to market for, screen, and manage a tenant?
If any of those describes you, then consider having Home Pride Properties be your corporate tenant. You’ll be a landlord on auto-pilot with a company “on the hook” and not an individual.
What to know more about how that might work for you? Ask us. We’ll gladly give you more details. Then, you decide if it’s better than walking away from your mortgage, if that is one of the options you were considering.
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