Is it advisable to buy a home in California if I intend to return to my home country permanently after 3 years, that is, before I complete my mortgage payments? Is it OK to tell the money lender that I cannot pay off the remaining mortgage loan payments as I have to leave? Does that constitute foreclosure and what are the legal implications to me? I am looking for the worst case scenario. I don't want to rent out the home.

If you are not planning to stay longer than 3 years, it might be better for you to rent a home. You could buy and then simply try to sell the home before you were to move back. This would take care of what you would owe on the remaining mortgage. How well you may or may not do when selling would depend on the housing market at that time. There would be no guarantee that you would sell quickly and going into buying a home, knowing that you will just walk away without meeting your debt, is just morally wrong, not to mention financially irresponsible.

Renting would allow you to simply stay until your lease was up then simply move back to your home country with no housing financial commitments to take care of.

If you move out and do not pay, then after a period, they will foreclose on the home. After they foreclose, you will owe the difference between what it sold for, and what was owed, plus late payment fees, legal fees, and foreclosure costs.

In three years property value would not go up enough, to justify buying and trying to sell. Foreclosure will hurt your credit rating for years.

The term of the loan is irrelevant. A 30 year mortgage, so what, you SELL at the end of your stay, and that lump sum goes to pay off the loan, and you either get what's left or you pay what is still owed, at the closing. As said above, walking out is unethical and ridiculously time consuming and risky, and the foreclosure will haunt you if you ever want to return. Shop around for a house that you can bargain down enough to at least break even in 3 years. My current house I paid 262K for, down from 299K, after dropping from 350K. Since you are new to all this as well as to CA, pay a (good) buyer's agent to help you shop.

However I agree with the others who say to RENT. 3 years probably isn't long enough to gain value unless the market changes a lot, and it certainly isn't long enough offset the closing costs. You can, however, finance the closing costs, so with careful and smart work, it can be done.

Renting/leasing an apartment/home is cheaper, less risky, and leaves you more flexibility to come and go as you please, with less legal, and financial consequences, or hassles.

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Originally Posted by kritvarma

Is it OK to tell the money lender that I cannot pay off the remaining mortgage loan payments as I have to leave?

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If you say that to a lender you won't get a loan.

A lender will require a down payment, at least 5% probably much more. So unless you plan on selling the property in 3 years, don't bother buying.

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Originally Posted by kritvarma

Is it OK to tell the money lender that I cannot pay off the remaining mortgage loan payments as I have to leave? Does that constitute foreclosure and what are the legal implications to me?

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. That would constitute theft.

I'm going to be blunt: this kind of thinking has me concerned for your daughter, who is developing tics, a sign of stress. And you want to blame her teacher. You ask about collecting SS and Medicare, and you ask about walking out on a mortgage (and you ask about other scenarios having to do with financial situations). Sure, the lender gets to keep the house, because they have a lien on it, but it takes months, and they have to try to sell it, and get what they can for it. Yet you don't seem to be hurting financially. So I wonder if your daughter is picking up YOUR stress. Why are you thinking this way???