The housing market has crashed with a resounding boom, and while it has affected everyone associated with the real estate industry, it’s the homeowners who purchased their mortgages a few years ago who are feeling the pinch in more ways than one.

• Many of them have lost their jobs to the recent economic downturn.
• The value of their homes has dropped considerably.
• They are still supposed to pay mortgage according to the original rate, an unfair situation that only leads them deeper into the dark hole of debt.

At the other end of the spectrum, we have the owners of homes and apartments who are looking for tenants to rent their places. The vacancy rate is high, and people are leaving for better deals with regular alacrity. So it’s all they can do to retain occupancy by sweetening the deal for tenants who decide to lock in their leases for a six-month or one-year period or more. Most of them are offering:

• Lower rents
• Better tenant services
• Free rent for the first month
• Half rent for the second month
• Cleaner surroundings
• Room and kitchen upgrades or other similar incentives for those who renew their leases for a year
• More flexibility for tenants like allowing them to keep pets

And so homeowners are faced with a difficult decision – should they continue to pay sky-high mortgages on homes that have dropped significantly in value or walk away from the contract and settle for foreclosure? Should they risk damage to their credit ratings if they foreclose or refuse to pay their mortgages?

At first thought, it’s a hard question to answer, but the more you think about it, the clearer the solution. If you have the financial wherewithal to meet your monthly rent, it’s best to agree to a short sale – the procedure where your home is sold for much less than your mortgage amount. This way, at least you’re cutting your losses at the earliest possibility. If you decide to walk away from the mortgage and are worried about your credit rating, it’s only going to take about three to four years to wipe the slate clean and start again, an option that’s infinitely better than getting into the whirlpool of debt.

So you know what to do – get out of those elephantine mortgages and into an apartment or home that you can rent for a low rate. After all, when the chips are down, the wisest course of action is to play to your advantage!