Tracy Byrnes
Now, "walking away" from your loan can mean two different things, so let's define them first.
It can mean that you go to the bank, throw your hands up in the air and say "No mas! I'm not making mortgage payments on this house anymore. It's a loser, and I want to get out before the carnage gets worse." You hand the bank the keys, and assuming you've put no money down, you walk away, go find a hotel room and hope they don't take legal action against you for blowing off the mortgage you once agreed to pay. You've basically decided to go through the foreclosure process. But know that whether you went into that loser home with good credit or bad, you will put a huge black market on your credit for the next seven years at least, says Keith Gumbinger, vice president of HSH Associates of Pompton Plains, N.J. And that will affect every aspect of your financial life. It will be way harder and much more expensive to get a loan for a home, car, heck, even lunch, the next time around. "Walking away" from the loan could also mean sticking a For Sale sign in the front lawn and keeping your fingers crossed. But again, depending on where you live, prices are deflated in many areas of the country. So if you sell it, odds are good that you're not going to regain those losses. But let's say you do find a sucker to buy it -- where you are going to go? Unless you've banked your recent bonus and can "move on up," you're going to end up buying the exact same house down the block.
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