What would you do?

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ns2524_IHB

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What would you do?

Lets say you buy the following property for the asking price. You put 200,000G down and finance 700,000. Your payments with tax and association would be about 5,500 a month. Comes 2010 and the price drops to 2002 levels of 533,500, which is a distinct possibility according to all the bears. Would you continue payment or better to walk away?

Price: $899,000

12 Capistrano

IRVINE, CA 92602

Beds: 4

Baths: 3.5

Sq. Ft.: 2,600

$/Sq. Ft.: $346

Lot Size: -

Type: Single Family Residence

Style: Contemporary/Modern

Year Built: 2002

Stories: Three or More Levels

Area: Northpark

County: Orange

MLS#: P600579

Status: Active

On Redfin: 6 days
 
I guess it depends. What ever home we move into next will be the home we expect to stay in for the rest of our lives (barring any unforeseen circumstances). As a result, whether RE goes up or down wouldn't matter to us. It's not an investment to us, but a home. All we're waiting for is affordability. The point at which prices hit the 2003 level, we will start looking in earnest.
 
<p>ns2524:</p>

<p>You must have needed the "deduction" to have purchased the house instead of renting. Otherwise, you wouldn't be given a choice, you would be a FB, and packing your bags before the sheriff kicks you out. </p>

<p>So if your income could support it, why would you walk away? </p>

<p>So you can buy another home for cheaper? </p>

<p>Not easy to do if unless you could pay all cash. Having a foreclosure on your credit could disqualify you from getting a mortgage in 2010. If you think credit is tight now, think what it will be like in 2010 after hundreds of billions of $$ worth of real estate got foreclosed.</p>

<p>The point most prospective homebuyers miss, is that real estate will no longer be as easy to get in and out of like in the past 20 years. Your next home will either be yours or the bank's for the next 10 - 15 years. </p>

<p>You need to chose wisely, because you may not get another chance. </p>

<p>1. Because you can't sell it for the price you want. (too many other homes, cheaper and in foreclosure)</p>

<p>2. Less people qualify for mortgages due to more stringent credit requirements.</p>

<p>3. People who could buy homes, will wait, because they don't see the price getting any higher, only cheaper.</p>

<p> 4. Economic conditions are uncertain or in a recession, because everyone wants to hold on to cash or gold.</p>

<p> </p>
 
<p>I say wait till you pay the price you want. If that is now, so be it. BUT you're thinking that credit will be easy to come by. It won't and it isn't. Credit is only going to be harder and harder to get from here on out. SO "walking away" is not and option because you probably won't be able to repair your credit or have enough cash on hand to be foreclosed on (unless you have something like 50% and even then they will beat you up on the interest rate....) well good luck </p>

<p>-bix</p>
 
<p>i guess it would depend on how much your credit means to you. i can see why homeowners with zero equity might walk away from their home. but just realize that doing so will destroy your credit history. </p>

<p>it also depends on your perspective on debt. for some, being negative 10K is bad. for others, it might be negative 100K. as for me, i wouldn't file BK if i was negative 10K. Maybe if I was negative 100K. But for high income individuals, negative 100k is not that much. Perhaps their threshold is negative 500K.</p>
 
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