Should I Stay or Should I Go?

When The Clash wrote the simple yet memorable riff, “Should I Stay Or Should I Go” back in 1982, who could have predicted that it would become a theme song for so many homeowners now?

Much like the severe real estate downturn we experienced the year this song was written, many individuals are now staring down the barrel of a monthly mortgage payment that is calculated on a loan amount far higher than their home’s current market value. So why then would anyone still pay their mortgage?

For some their decision is based on principles – finish what you started – therefore stay where you are and tough it out.

For others it is based solely on their financial wherewithal; why should you pay your mortgage when the actual market value of your property is now 20% and in the extreme cases, 60% less than what you paid?

Finally, others will base this decision on their moral beliefs.

No matter which route you travel there seems to be very few individuals who aren’t to some degree impacted by the current recession.

Some have said that leaving your home and mortgage behind will not smudge your credit score as bad as a bankruptcy, however, even if that were true, there would still be a blemish that could make it more difficult to rent another residence or purchase a car.

Yet along this same vein, some experts believe that a housing-related hit to your FICO score will be evaluated differently due to this once-in-a-century real estate market.

Who can really know for sure?

Certainly, there is something to be said for honoring our commitments. On the other hand, sometimes life just throws you a curve ball.

So what is your take on this? Would You Stay Or Would You Go?