Thursday, March 27, 2008

 

You can walk away Renee, from your home

Not sure about the legality of breaking your contract with the bank but from a financial point of view Jim Cramer is right on the ball. If you own a home you can't sell, the payments are onerous, i.e. greater than 40% of your income, and you have little or no equity walking away makes an awful lot of sense especially if the bank let's you off the hook. And they might if going through the foreclosure process is costly enough and the bank thinks it can sell at a better price today than 6 months down the road.

The truth is that it makes sense to rent in most urban environments while prices are falling and while the housing market is years away from picking up. Walk away now and you will pay less for housing and be able to buy in a few years perhaps 20% cheaper. That is if your credit isn't ruined. Here is a website dedicated to helping people through the process of walking away from their home. A sure sign that the deflating of the bubble is not anywhere near over.

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