Wickland Group Foreclosure ExpertsIt wasn’t too long ago that to stop making payments on your mortgate would have been unthinkable! However, in this down real estate market, some homeowners are choosing to abandon their loan obligations … even when they can afford to make their payments!

Home values have dropped significantly and some homeowners are finding themselves owing more than their homes are worth. Because of this, some are making the decision to ’strategically default’ on their mortgages, not out of necessity but because they feel it is in their best financial interest.

Walking away from your mortgage is NOT risk-free! Foreclosures affect your credit record for seven years and can lower your score as much as 160 points. And with a lowered credit score, you will likely have much higher interest rates on car and other loans, plus credit cards issuers may raise your interest rate or even refuse to issue you a card.

Banks are also warning they will be getting tough with ’strategic defaulters’ by going after their other assets. Banks may also decide to sell the right to pursue claims to collection agencies or other firms which could then dun borrowers for up to 20 years after the foreclosure!

So before you decide to stop making your mortgage payments … make sure you ask yourself these very important questions:

  1. Am I willing to rent for at least three to five years while waiting to quality for a home loan again?
  2. Can I accept a blot on my credit record for seven years, one likely to make any future loan I need more expensive?
  3. Does my state allow lenders to dun me for the money they will lose on my foreclosure?
  4. How much can I save by renting, taking into consideration the loss od any tax deduction on mortgage interest?
  5. Do I feel a moral responsibility to meet my financial commitments?