Q: We have a house in Florida. Purchased for $135K five years ago. Recent evaluation was $78K. We owe about $100K on the mortgage and about $70K on an equity loan. We are 68 and 72 and still work to keep our payments going. We have credit about 780 each. We have no other assets; we have an old car, no investments, savings etc. Can we walk away from all of this and rent an inexpensive apartment or house someplace else in order to finally stop working?
A: We cannot advise you to walk away from your obligation as a course of action; you should contact a lawyer to get some information as to any legal ramification of this choice. You should also know that the damage to your credit score may make it difficult to rent an apartment, since many professionally-managed complexes use your score as a basis. A question, though: As you were tapping all the equity out of your home and then some, raising your debt obligations substantially over the last five years, how did you plan on paying for it without working?
A 25-year expert observer of the mortgage and consumer debt markets, Keith Gumbinger has been cited in thousands of articles covering a wide range of consumer finance and economic topics in outlets ranging from the Wall Street Journal to the Bottom Line newsletters. He has been a featured guest on national broadcasts for CNN, CNBC, ABC, CBS and NBC television networks and has been heard on NPR and other national and local radio programs. Keith is the primary researcher and writer for HSH.com's MarketTrends newsletter and has authored or co-authored a number of consumer guides on mortgages, home equity, refinancing and more.
