40 yr old.
debt free except house
6 mo emergency fun
401k of 12% plus 3% match
I bought a townhouse at the exact wrong time given what has happened to the market. I bought the first unit in a new development in Florida that is only 3 miles from my office.
My first hint should have been when they took about 20k off the price the week of closing without me even asking. I thought I had struck it rich.
I got somewhat dupped on the mortgage terms(my own fault for not using due dilligence, I just took their word). I swear I was told it was 30 yr fixed with first 10 yrs interest only. Turns out the rate resets in Nov. 2011. My rate is 7.3% I put no money down.
I can afford the payments, I am in no jeopardy so I did not qualify for Hope for Homeowners. I had/have no hardship.
My issue is the house is now valued at about 60-70 less than what I paid for it. New units are being built and sold for dirt.
I owe WAY more than the house is worth. I can't refinance because of that.
I could rent the townhouse next door for probably $400 a month less than I am paying on my interst only loan plus HOA montly fee.
Should I just walk away? Should I stop payment and just bank the money until they foreclose?
Seems like I could be stuck in this house forever, it will be a decade before it regains its value. For the same money I spent 3 years ago, I could have a dream house near the beach.
What do you think? Do I have ANY options? I know walking away when I have the ability to pay is unethical.