If you want stop foreclosure mortgage help, there are three questions you will want to answer for yourself:
1. How much would it cost to rent instead of own?
2. How much can I afford in housing costs right now?
3. Where is my equity going? Increasing or decreasing?
Notice that these are business questions. I don't want you to think of your house romantically or emotionally for a moment. We are going to think of your house in a business sense, and to stop foreclosure, or do a short sale, or move out, or keep it...these are business questions for the remainder of this article.
So first, let's talk about the rent versus own question. In some areas, you can rent the same house as it would cost to own. And by cost to own, I am talking about PITI+M, or Principal, Interest, Taxes, Insurance, plus maintenance. The midwest is like that. In those areas, it pays to own a house right now, or it can pay in some cases.
But in other areas, like where I live near Washington DC, the cost of renting is about one third of the costs of owning.
And when you own, you are losing equity as prices fall. Plus, as a renter, you have a plentiful supply of houses to rent because a lot of folks can't sell so they are renting, assuring the rental market of decent rental prices.
None of this is relevant if you can't afford what you are paying. The big issue today with mortgage foreclosures is people cannot afford their house payment. Their mortgage is too big. The mistake they make is running through their savings.
You are much better off facing reality and not going broke if you have more house than you can afford right now. And especially so if your equity is falling or negative already.
In my opinion, the handwriting is on the wall. It will be harder to sell your house next year than this year. The US housing crisis is a credit crisis, a problem with money being scarce. That will not go away any time soon.
So if prices are falling, and you cannot afford to live where you are living, and especially if you can rent for less, you should consider selling.
Many times you can only sell if you do a short sale, but then you are out from under. And if you really want to buy another house, and not rent, then you can have your choice to buy houses with little or no money down and no qualifying. These deals are plentiful in many areas of the country.
The real critical questions are what you need to answer for yourself. The rest is fairly easy if you can be realistic about what you can afford, whether to rent or own, and where house prices are going.
