what’s the point in continuing to pay my mortgage, even if I can afford to?

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My husband and I make a decent living, I’d say we are upper middle class. We have EXCELLENT credit and yet, because the market value of our house has gone down substantially, we can’t get a refinance to save our lives. My question, what benefit is it to continue to pay my mortgage at almost 2% higher interest when someone else who has bad credit, has missed payments, maxed out their equity two years ago to buy boats, cars, or vacation packages can re-finance for much less? Or better yet, someone who has no history of good credit at ALL can buy a new home for much lower interest and even get a HUGE tax credit for doing so!

We did everything right. We didn’t max out our equity, we didn’t do an adjustable loan, we stayed conservative, we have never missed or been late for one payment, we are loyal customers who I think deserve the breaks. But when I go to my bank, the same bank that holds my mortgage, my car loans and all of my investment/savings, and ask for a refinance, they say NO because my house does not hold the same value it did before. So what’s the point? I’m not asking to take a loan for more than I currently owe, all I want is an opportunity to take advantage of the same low interest they are giving the other customers. If I do wrong… and walk away from my loan, then maybe some day I will get a break… what a shame.

  1. Reply
    April 30, 2011 at 12:30 am

    I understand your frustration. I was in a similar circumstance and was able to refinance through a mortgage broker when my bank was not willing.

  2. Reply
    April 30, 2011 at 12:40 am

    Pay what you owe and stop worrying about what others have or don’t have.

  3. Reply
    April 30, 2011 at 1:19 am

    Life isn’t fair, is it? OK, walk away from your mortgage. You’ll soon find that things aren’t going to be as easy as you think once your credit is ruined.
    Real estate values fluctuate. Your house is worth less than it was only if you are selling it.

    Take care

  4. Reply
    ibu guru
    April 30, 2011 at 1:57 am

    You did things right except possibly for one detail – insufficient down payment to weather the market storms. This is why it is always best to pay at least 20% cash down plus closing costs! It’s a protection against vagaries of the market, and cuts your interest rate, points, amount of debt outstanding. If you did put at least 20% down, and the house is still underwater, at least you did the smart thing as well as the right thing to limit the damage.

    If you want to keep that house, keep your excellent credit, and keep your good karma, pay off the mortgage. You might see if a mortgage broker can help you with a refi even tho your bank is uncooperative. You might also see if a big paydown helps – with that, a shorter term could be possible with even lower interest rate (rates on 15 or 20 yr loans are below those for 30 yr loans). This will save you thousands in interest over the term of the mortgage and you could recoup much of your losses in this lousy market.

    Don’t give up. Try a few alternatives here and you could keep your happy home, your excellent credit, and your integrity intact. Meanwhile, those who are getting “modifications” are losing their homes as well as their money, credit, and more. Over half of those getting temporary modifications end up in foreclosure without even qualifying for “permanent” modifications. Keep yourself out of that mess!

  5. Reply
    April 30, 2011 at 2:42 am

    You are not talking about “… I think deserve the breaks…”. You are talking about keeping the money the bank gave you and refusing to repay it.

    You are not entitled to just keep the money. Yes, other people are greedy as hell and have no problem robbing the poor banks blind, they are completely indecent and lacking in even rudimentary ethics. But how does that make it OK for you to become dishonest and unethical too? You are either a decent human being or you aren’t. You can’t have it both ways.

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