Now more than ever, I would try to keep the home. We are near the bottom of the market. As long as you are able to make your payments, and need a place to live, you will be made whole again with property values over the next 5 years, maybe sooner. The builders have stopped building (less inventory). There are fewer illegal aliens to build homes due to stricter laws (high cost to build new homes in future). There are jobs in arizona (more people moving here). The USA dollar is low (more people moving here from Canada and abroad). There are 69 million baby boomers that just started to hit 62 years of age this year (more "snow bird" buyers). Weather disasters in other regions of the USA make Arizona more attractive for relocation (more people moving here from the cold north and other natural disaster zones).

I hope I have encouraged you to "tough it out". You are on a fixed rate loan for 30 years, that's good. Just hang in there! You will be glad you did.

Hi Martin
You are like a lot of people out there that purchase in the peak of the market and have interest only loans. A big question is your loan adjustable? If it is adjustable, when is it due to adjust? Lenders are working with people if they can't make their payments. You may want to give your lender a call and see if they can help. I would not advise walking away unless you really needed to but i do not know your situation in full.
Good Luck! Let me know if you have any other questions.

If the interest rate is comfortable can you start making payments on the principal and weather the storm. How long have you had your interest only loan and is it near the point where it gets reamortized?

If the home is comfortable for you and you are able to make the payments I wouln't walk. Prices go up and prices go down, and again they will go up.

I would sit down with your financial person to see exactly where you stand. In order to guide you here more information would be needed.