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We are being relocated from Wa state to SC at the end of the year. We currently own a 4 acre lot with a 1800 SF home and a 6 stall barn. We currently owe $301,000 on a 1st and $58,000 on a HeLOC. The relocation company had BMA's done and have come back with a MLSP of $320,000, with a SLP of $339,900. We are able to come up with $15,000 to go towards negative equity, but that will tap out our down payment on a new house, and that doesn't cover it completely anyway. So, I'm assuming Short sale is our next option, but how does that work? Would we be able to purchase a house in SC?
We are being relocated from Wa state to SC at the end of the year. We currently own a 4 acre lot with a 1800 SF home and a 6 stall barn. We currently owe $301,000 on a 1st and $58,000 on a HeLOC. The relocation company had BMA's done and have come back with a MLSP of $320,000, with a SLP of $339,900. We are able to come up with $15,000 to go towards negative equity, but that will tap out our down payment on a new house, and that doesn't cover it completely anyway. So, I'm assuming Short sale is our next option, but how does that work? Would we be able to purchase a house in SC?
A short sale is one step above a foreclosure in a lenders eyes. You will not be able to qualify for a new home for probalby a few years after a short sale. Your credit will be negatively impacted. See if the HELOC lender will carry the difference in a personal note.
A short sale is one step above a foreclosure in a lenders eyes. You will not be able to qualify for a new home for probably a few years after a short sale. Your credit will be negatively impacted. See if the HELOC lender will carry the difference in a personal note.
Yes I agree with Tim - he is an expert when it comes to Mortgages.
I used to fix credit reports, to qualify people for mortgages when I was an L/O. I focus now on saving peoples homes, and tell people what they need to do by themselves to turn their credit around. Credit is easy to be fixed. Realize you need credit mainly to buy a new home, or a new car (noting there are smaller reasons). My opinion - don't focus on a goal of buying a new property moving to S.C. Get an apartment, getting a storage garage if needed (it will be cheaper).
Realize - you can't just wake up one morning and decide you're going to sell your home at a loss by asking for a short sale. You have to show a hardship. and due to your loss of current income, cannot afford the home. Lenders will try and do a modification before awarding a short sale.
Here's what happens to your credit report if you go late on your mortgage.
30 days late: 40 to 110 points drop
90 days late: 70 to 135 points drop
Foreclosure, short sale or deed-in-lieu: 85 to 300 drop
The ding on credit will show up as a pre-foreclosure in redemption status, which will result in a loss of 200 to 300 points. This means an individual with a previous FICO of 720 could see it fall from 520 to low 400's. The lowest score I have even seen was 315 mid (that individual was a walking disaster).
If you are in your 20's to 30's - your can afford to take a hit on your credit, because you have time on your side to repair your credit. Conversely - a person in there 40's to 50's, need to do things to protect and promote the credit score. Were a mature person in their 60's plus - having bad credit is almost impossible to turn the scores around.
I have seen through cases of people looking to move to another state, but had financial obligations holding them back. One thing is stay current on the 1st mortgage - stop paying on the 2nd mortgage, a few months later do a lower settlement with the 2nd.
In lien holders position the 2nd mortgage cannot foreclose on you without paying off the fist mortgage. Because the State of Washington is a either/or Judicial state. There is a very strong chance your 2nd will take your case to court to file a judgment. Once there is a judgment you are pretty much screwed, becuase you will have to pay that amount to get it off your report.
The secret is complicating doing a bankruptcy with your 2nd, becuase if you do a B/R they do not get anything. In 4 to 6 months of no payments, your goal is to negotiating a lower settlement.
It is very rare I would even consider telling some one to go late, you may have to consider this is you come up to a brick wall and nobody works with you.
Understanding your goal - is why I am discussing above. I do not know all your details - my comments are based on previous experiences. Noting no situation is the same.
What ever you do talk it out thoroughly with your husband. Understanding your 1st priority - is working with each other building your future together.
Good Luck....
Last edited by Modification Specialist; 10-26-2010 at 02:15 PM..
So, then really our only recourse is either renting, or trying for a personal note with The 2nd lien holder? And in that process, I basically ask them to give me a loan for the amount owed, correct? Without the collateral of a house?
We have Excellent credit, and are in our mid 30's. Renting is definitely an option for us, although we have horses and have had difficulty finding rental properties that allow for them (We are still looking though.) As far as the relocation company paying the difference, they don't offer that unfortunately. They cover all other costs but the negative equity.
What would I do? Tell my employer that I can't afford to move and either they cover the cost of selling the home (including the neg equity), or rent the house from us until the value reaches the necessary level or we're not going. And yes I have been in that position myself and did do exactly that. We turned down several opportunities while our mortgage was upside down.
What would I do? Tell my employer that I can't afford to move and either they cover the cost of selling the home (including the neg equity), or rent the house from us until the value reaches the necessary level or we're not going. And yes I have been in that position myself and did do exactly that. We turned down several opportunities while our mortgage was upside down.
She mentioned the relocation company wasn't going to do anything to help them towards negative equity. Also taking into considering getting a good job, is getting tougher each year.
Over the last decade - have spoken 1000's individually about their mortgage and credit problems. Plus had a similar situation originally living in the south, 20yrs ago accepting a job up here in the north, helps me understand whats going on.
Finding rental properties that allow horses? Did you ever hear renting a stable?...lol..
My Sister lives in Maryland - they have 25 acres that pays for itself. To qualify for a farm tax exception. They have to have farm animals on the property. They rent out space for people to use for their live stock.
Mid 30's - as far as your credit is concerned and taking a hit, you have plenty of time to turn it around.
In my opinion your best option is to settle for less with your 2nd Lender. Do not go to them ask if they will talk about, because they will say no. By going late will get their attention. Timing and planning is really important, to accomplish the best results.
Understand banks make millions of dollars of profit each year. By being late a couple of months, and then mentioning about going into bankruptcy. You are basically telling them they are not going to get anything more from you. Then you tell them you want to settle for less. Their response will be - what do you want to settle for.
Important - do not want you to go past 60 days late on the payments. When it comes to credit - the ramifications of the different lateness's, 30 to 60 day late's are not as bad as 90 to 120 days late's. Because 90 days or later lateness's, the credit bureaus will consider the likely hood of going late again more likely in the future. 60 day lates only punish you until the debt is satisfied, later it can be easily explained.
A year after your move living in SC, then you can start cleaning up your credit, and apply for a new mortgage. If you have a car loan, because it is an installment type of debt, by sending in more then the agreed upon payment, is like pouring gas in a fire. Your credit score quickly shoots up.
Sent you a link where you can learn how to learn and repair your credit. Check your personal messages.
G.L.
Last edited by Modification Specialist; 10-27-2010 at 07:39 PM..
Sounds like this move is going to cost you , no matter what.
Is the alternative unemployment or is this optional.
There is no certainty that you will be approved for a short sale given you have 2 loans and savings. There is no certainty a short sale will close and this could proceed to foreclosure. Either way, this is going to impact your credit which has consequences, including your cost for heath and auto insurance, ability to find a suitable rental or an increased deposit, increased deposits for utilities, increased rates on credit cards debt and auto loans.
Only you can decide if this relocation is worth this.
Hello there, If you are able to rent it out then I would do so! Rental properties with horse stables are few and far between in the Tacoma area I work in, and I have even seen some posts on here about people with horses looking to rent in Washington. A short sale will hurt your credit and can prevent you from buying a home in the near future, so don't do it if you don't have to! Best wishes.
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Try renting
