House or Credit Cards?
Which would you rather lose?
I am kind of shocked by this article in the Washington Post about homeowners who are current on their credit cards, but not on their mortgages.
They opted to let their mortgage payments go while keeping current on all their cards. “I would rather be late on one thing than on several things,” said [Teesa] Rossman, who works at a local church, pointing to the “very high interest rates” on their cards and the need to keep accessing credit.
I don’t have a lot of deep thoughts on it since I’m super busy at work at the moment, but it does occur to me that folks figure that her logic has some merit. Only one creditor after you, rather than 5. But you’re losing your house? That seems crazy to me.
I don’t understand why they thought they could buy a house going in with no money down. It seems like a poor financial decision on their part.
Dream wrote:
Hmmm they need a lesson in priorities. I’d rather have a roof over my head than credit cards. Perhaps they felt that they could no longer afford the house and/or didn’t want the responsibility anymore and just let it go. Either way it sounds pretty dumb to me.
Posted on 12-Sep-07 at 10:55 am | Permalink
Pinyo wrote:
That’s very sad. Ignorance can really hurt you when it comes to money.
Posted on 12-Sep-07 at 12:58 pm | Permalink
Clever Dude wrote:
We bought a house with no money down and we’re doing fine. Heck, even if we put, 5, 10 or 20% down, if we can’t pay the mortgage, then we’re screwed anyway.
Posted on 12-Sep-07 at 1:40 pm | Permalink
Dean J wrote:
If it’s a one-month situation, maybe that is for the best, as you have one mark on your credit instead of five. For the long run, a roof is better than paying unsecured debt, for sure.
That said, if they were in a long-term can’t-pay-the-bills scenario, they’d be best off sending $5/month to each of the credit cards, and paying the mortgage on time. That keeps the roof over their head, closes the credit cards, but technically should prevent the credit card companies from defaulting them and sending them to collections.
That said, if you have a “need to keep accessing credit”, you need to reassess your income and spending habits.
Again, “I have an ongoing need for credit” is a broken sentiment.
Posted on 12-Sep-07 at 4:46 pm | Permalink
paidtwice wrote:
Credit card companies act a lot scarier. I can see how your thinking can get all twisted. It isn’t right but it is what it is.
I’m with Clever Dude… we bought our house 100% financing. Don’t tell. And in fact - mortgage peeps *expected* us as first time homebuyers to do so. So I can totally see how that happens.
(We can afford our mortgage though even if it wasn’t the brightest decision its a 100% financed straight 30 year loan no interesting weird stuff)
Posted on 12-Sep-07 at 6:22 pm | Permalink
Single Ma wrote:
Debt leads some people to do strange things.
Posted on 12-Sep-07 at 9:21 pm | Permalink
Sistah Ant wrote:
that’s disturbing - i’d rather be in a home than have credit cards. an ongoing need for credit means they’re living beyond their means. if they can’t afford to live in that home without credit cards, maybe they need to downsize their living expenses by moving.
Posted on 13-Sep-07 at 9:56 am | Permalink
Moneymonk wrote:
usually because a cc payment is much less than a house payment
Posted on 13-Sep-07 at 12:25 pm | Permalink