DaCounselor’s advice is crisp and correct, as usual, and is the right advice for you to act on, sandiego. The rest of the discussion in this thread is an opportunity for Piggingtonians to argue over the opportunities and morality of your type of situation. Don’t take it personally.
Asianautica’s comments make it clear that many people are indeed assuming, and pulling for, a government bailout, just as Marion says. Saying that walking now and buying for much less in 7 years time is a good idea assumes that this will be possible. Any purely self-interested investor would not lend money to such a deadbeat borrower in 7 years time unless the rate was very high, or the downpayment was huge. Would you loan everything in your bank accounts and money market funds at a low rate to sandiego in 7 years time, asianautica, if they put none of their own money down? Loosening those tight (high rate/downpayment) conditions can only be done via some government intervention favoring more leveraged buyers at the expense of people who’ve always kept their house purchases low compared to their savings.
For me, the biggest lesson of this upswing and downswing in the home market is not that it’s a good idea to limit your home purchase to what you can comfortably afford with low borrowings. Nope, the lesson is that it’s a good idea to take maximum advantage in non-recourse states of any stupid lender who’ll offer 100% loans at low teaser rates. Buy lots of properties when the market is heading up, and start cashing them out as the market continues to head up. When the market heads down, you only lose tiny amounts compared to your gains. What a racket!
