Troubled Homeowners Buying Second Homes?

According to ABCNews, there seem to be a growing number of homeowners who are purchasing cheaper second homes and simply walking out of their first homes because they could no longer afford their mortgage payments.

If this is true, it could only be possible for families who can actually afford to pay the down payment on the second home and are lucky enough to get approved for another mortgage even though they still have an existing mortgage, which is about to be defaulted.

Considering that many homeowners have found themselves in a position where they could no longer keep up with their mortgage payments, it is not surprising that some of them want to make sure that heir families will still have a room over their heads.

In addition, most of the homeowners who are facing foreclosure have learned their lesson – opting for fixed rate mortgages on their second home rather than going for the adjustable rate ones.

If you are considering the same option, you should keep in mind that these homeowners have not yet defaulted on their first mortgages, allowing them to get approved fro another one. Also, it will be doubly-hard to get a second loan right now considering the recently-tightened lending guidelines.

Lastly, you should not forget that you will be walking away from your first home, which means a foreclosure record on your credit report. This could be very bad for your credit score and could cause you a lot of inconvenience in the future.

Distressed homeowners should realize that there are actually other options that can be explored such as loan modification or new repayment plan. All they need to do is to talk with their lenders about their mortgage problems. If qualified, they could probably avail of the government’s mortgage relief program, set to be implemented on October 1.