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  1. #1
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    Anyone walked away from your mortgage?

    For now, I'm not going to walk away but curious if others did. As of now, I am $25k underwater. Which is nothing compare to others at $100k+! But, recently an article from cnn, washington post, times, and etc... wrote an article about a company from youwalkaway.com. Seems like for under $1k they tell you all the things you need to know to walk away. They even show smiling faces in their page as well. Anyways, if anyone did or may consider, let me know your opinion as well.

    I read in somewhere that some 50+ yr old guy bought a 2nd home and walked way from his old home. He knew his credit will be ruined if he walked away so he bought the 2nd and left the 1st!! lol~

  2. #2
    King of Paralysis by Analysis bronze trophy
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    The fact that he had good enough credit to get a mortgage for a second house is crazy.

    What happens when he has to renew his mortgage in 5 years though, good luck getting it renewed then and bye bye house all over again.

  3. #3
    Pragmatic Programmer halfasleeps's Avatar
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    Why do you have to renew a mortgage? I am asking because I just bought my first house a few months ago.
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  4. #4
    King of Paralysis by Analysis bronze trophy
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    Quote Originally Posted by halfasleeps View Post
    Why do you have to renew a mortgage? I am asking because I just bought my first house a few months ago.
    Most mortgages are for a period of time (1 yr, 3 yr, 5 yr), especially if you choose to lock in your rates.

    Your mortgage payments may be based on a 20 year amortization schedule but that doesn't mean that the bank has agreed to lend you money for the next 20 years.

    I'm not sure how it works for variable rate mortgages but I believe that it's the same. My house is on a line of credit because it was cheaper than a mortgage so I don't need to worry about that stuff (plus my wife is in banking so she takes care of all that crap so I can be blissfully ignorant of how the details work).

  5. #5
    Programming Since 1978 silver trophybronze trophy felgall's Avatar
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    It depends on where in the world that you are. Here if you take out a mortgage for 30 years that means the lender has agreed to give you the money which you agree to pay back over that period. At least that's the way it works with variable rates. My understanding of how it works for fixed rates is that the loan reverts to the variable rate at the end of the fixed rate term unless you fix it again at whatever the going fixed rate is at that time.
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  6. #6
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    I haven't, but I can't hold it against anyone who got suckered into the real estate bubble and can't afford to pay it. Feeding your family is more important than feeding the banks & credit companies IMO.

  7. #7
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    I'm sure there are families who simply couldn't afford it but I believe there are some who just won't pay because it's not worth it. From the articles I read, there's many people who can easily afford the payments but decide to walk away because they are $100k+ underwater. Of course, they won't be able to buy a house unless they pay in 100&#37; cash. Then again, I'm sure there's other way around to buy another house....

  8. #8
    SitePoint Wizard silver trophy linkin99's Avatar
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    I have a 30-yr fixed rate. Nothing renews in 5 yrs. My mortgage is simply due in full in 30 yrs (well, 27 to be exact).

  9. #9
    Pragmatic Programmer halfasleeps's Avatar
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    Well I have a 30 year fixed rate, I was never told of ever having to renew or anything like that....I think I need to look into this. Of course my house is only 36K.
    Altoona Design
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  10. #10
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    Don't have any mortgage right now but I don't know What Will I do when I have A mortgage that is so big to handle for me.
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  11. #11
    King of Paralysis by Analysis bronze trophy
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    What do you guys with 30 yr fixed rates pay in interest?

    It must be through the roof to compensate for the amount of risk involved in such a long financing deal.

  12. #12
    King of Paralysis by Analysis bronze trophy
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    Quote Originally Posted by halfasleeps View Post
    Of course my house is only 36K.
    That's awesome if you can get a nice place for that kind of $$$. What's your mortgage payment, like $275/mth?

    I'm assuming you're in a rural area and work completely online?

  13. #13
    Pragmatic Programmer halfasleeps's Avatar
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    Quote Originally Posted by tke71709 View Post
    That's awesome if you can get a nice place for that kind of $$$. What's your mortgage payment, like $275/mth?

    I'm assuming you're in a rural area and work completely online?

    Its just over $300 I got 6.5 interest rate. Its a really small town I wouldn't call it rural though. Theres a local jewelry company here I work for as the head web developer/graphic designer/promo video maker/etc..
    Altoona Design
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  14. #14
    King of Paralysis by Analysis bronze trophy
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    Excellent. That wouldn't even cover my property taxes, sigh...

    I did a little more looking out of curiosity and I can't find anything over 10 years in Canada as far as mortgages go so this 30 year mortgage must be an American thing. I've also heard that the tax code in the USA actually discourages people from paying off their mortgages due to the interest being a tax deduction as well which isn't done in Canada or anywhere else in the world as far as I know.

  15. #15
    SitePoint Wizard silver trophy linkin99's Avatar
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    I pay under 6.5&#37; interest rate as my credit was pretty good. (Shoulda waited another year cuz my rates would've been another point lower - but what can ya do? (Don't say refinance cuz it wouldn't be worth the cost in refinance fees.)

  16. #16
    King of Paralysis by Analysis bronze trophy
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    I think we pay 3&#37; or so, we were down around 2% for the longest time but rates have gone up in the last few months.

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    Yes I did! I've paid all I had to pay.

  18. #18
    SitePoint Wizard silver trophy Crazybanana's Avatar
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    I have paid off my mortgage, all of it. it took me 13 yrs to pay off my house, which was my goal to do before I was 35.

    I feel more relax and can be more home doing what I want, knowing I have no pressure on me from the bank or whatever.

    I feel lucky when talking to my friends and they tell me they still got 20-30yrs of paying left on their houses, but i know I've worked hard for it so this is the reward
    Who's to doom when the judge himself is dragged before the bar


  19. #19
    ✯✯✯ silver trophybronze trophy php_daemon's Avatar
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    I didn't want to come in bragging, but since the example is set

    I never took any loans whatsoever, and do not intend to. Even if it means I have to live modestly sometimes. I don't believe in borrowing a life... have to earn it.
    Saul

  20. #20
    Pragmatic Programmer halfasleeps's Avatar
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    Quote Originally Posted by php_daemon View Post
    I didn't want to come in bragging, but since the example is set

    I never took any loans whatsoever, and do not intend to. Even if it means I have to live modestly sometimes. I don't believe in borrowing a life... have to earn it.
    I read somewhere that the only things you should ever borrow money for are education and a house. So far that is all I have borrowed for. I can't say the same for my credit card happy fiance lol (but shes always pays the bill in full at the end of the month).
    Altoona Design
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  21. #21
    King of Paralysis by Analysis bronze trophy
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    Quote Originally Posted by php_daemon View Post
    I never took any loans whatsoever, and do not intend to. Even if it means I have to live modestly sometimes. I don't believe in borrowing a life... have to earn it.
    I have a friend who had that exact same attitude, he lived at home until he was 30 saving saving saving over time to pay cash for a house.

    Of course, the cost of houses was consistently rising faster than he could save money so he just kept falling further and further behind. Eventually he caved in and got a mortgage.

    The moral of our story is, some things (and very few) are worth getting into debt for because a) the value of the items will increase greater than the amount of interest you're going to pay, b) you're going to have to pay for something similar (e.g. rent an apt) that you will gain no equity in.

  22. #22
    ✯✯✯ silver trophybronze trophy php_daemon's Avatar
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    Yes, that does make sense, that's why I usually keep that philosophy to myself and never advice anyone to be against any kind of credit. It very much depends, sometimes it's a matter of survival.

    I'm not doing it religiously, perhaps if I lived in US or elsewhere, I'd have no choice. But I can get away with it here, so far so good.
    Saul

  23. #23
    King of Paralysis by Analysis bronze trophy
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    Credit is, like fire, a useful tool.

    It's when it gets abused that people get into trouble.

  24. #24
    SitePoint Wizard silver trophy Crazybanana's Avatar
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    Off Topic:


    Quote Originally Posted by php_daemon
    I didn't want to come in bragging, but since the example is set
    It isn't bragging
    Try to see the work behind it, if you can

    Quote Originally Posted by php_daemon
    I never took any loans whatsoever, and do not intend to. Even if it means I have to live modestly sometimes. I don't believe in borrowing a life... have to earn it.
    This is exactly what goes through my mind, but a house is a big investment and most of us has to loan the money.
    But if you can afford it, you can pay it out faster.

    I have worked hard and feel I have earned my freedom
    Who's to doom when the judge himself is dragged before the bar


  25. #25
    Pragmatic Programmer halfasleeps's Avatar
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    Quote Originally Posted by tke71709 View Post
    Credit is, like fire, a useful tool.

    It's when it gets abused that people get into trouble.
    I think thats a pretty good analogy.
    Altoona Design
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