If your house is worth less than the loan you took
Assume you bought a house for LKR 100 mn. Assume that you had cash of LKR 5 mn, and you took a loan of LKR 95 mn to make the purchase. Now, suppose house prices started to tumble, and the house is now worth LKR 70 mn.
Now, one of your richest uncles passes away, and leaves you off with LKR 100 mn. What would you do? i.e.
a) pay the loan off
b) default on the loan, and buy a better house elsewhere (all the prices are going down, so there is this house which was LKR 140 mn then, but now going for LKR 100mn…)
:)
fyi: I am not sure what I would do…
2 comments so far
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hmmm.. that’s a tough one!
One half of me would want to pay the loan off coz I HATE being in debt….
but then the other offer is tempting too….
if you’re sure of the loan.. as in paying it back.. and you’re well to do, go buy it! If it’s a great deal that is..:)
looking at my mind set right now, I’d pay off the loan and put the balance into a FD and take the interest..:)or…. invest the money for while… and then..
HEY, there’s so much you can do!
a lot to do!