There have been a few articles online and reports in the news about homeowners who have chose to pay off their credits cards and miss some or completely ignore mortgage payments to the point of defaulting on their home. Many people think this is an absolutely crazy notion, but is the reasoning behind this new trend for homeowners sound?
The idea is, “I need my credit cards for daily and monthly expenses, but I can always rent or live with a relative if I lose my home.” Many homeowners feel there credit cards are vital during these tough economic times and letting a mortgage payment or two slip by is no problem.
Those who have begun to focus on their credit cards are in such a tight financial situation that they are having to charge everything from food to gas just to get by. So, these people feel that defaulting on a home is something that beats losing their credit card, increasing their credit card interest, or maxing out their card and being unable to purchase any necessities.
Critics of this practice make a good point in saying that a home is an investment that should be kept at all costs because credit cards are a trivial matter when compared with a home.
Yet, many of those who are choosing credit cards over mortgage payments are said to have a mortgage that is underwater, or they owe more than the home is worth. Is defaulting in favor of credit card payments still an excuse in this case?
Many say an underwater mortgage, more than likely, is going to see an increase in value over the years, hence the idea of a home as an investment, and homeowners who owe more than their home is worth need to just ride out the tough housing market.
However, many disagree with this notion and are taking huge losses on their credit score by letting their home go into default in favor of their credit cards.
Advisors say that if a mortgage is too much then the homeowner should look to refinance or sell the house. Living off of credit in a time of desperation is one thing but the majority of people weighing in on this argument believe that a full house beats a few pairs of credit cards every time.
