Quote:
Originally Posted by holmesmic
My husband is an active duty Air Force officer. We purchased a home in Virginia in 2006...its a variable due to adjust in late-2009.
We have already moved away from the area due to PCS orders. We tried selling the house for what we paid for it...not looking to make any money (and actually were going to lose a great deal with realtor fees etc.) Unfortunately, due to the market we were unable to sell. We ultimately decided to rent it out (for hundreds less than the mortgage/ins./taxes we pay on it per month).
Anyway, now that we've got renters in there helping pay the mortgage, we have called around looking for the best interest rates, etc. because we think we should go ahead and refinance now instead of waiting until October in case rates go up.
PROBLEM IS....the two banks we've called consider the property an "investment" property because we don't live there any longer. Its not an investment AT ALL (we pay out 2100 per month and only receive 1600 per month and that's before property manager fees). We still own the home through no desire of our own. We are just trying to "do the right thing" and continue paying on our debt.
Is there anyway around this being considered an "investment" property?? The two banks I called...one being USAA...seemed like it was so cut and dry.
Its unbelievable to me that its that way. We, as military, have no say when its time to move to the next station. We don't have the luxury of riding the market out...we move when the military says its time despite our INability to sell a house.
Anyway, I'd love any insight to be offered.
|
Welcome to the gamble of purchasing a home while on active duty! I have owned a few houses and am currently in the same situation you are with the exception of the type of loan I opted for.
Your home is an investment property because it is no longer your primary residence. Like it or not this is how it is. I highly recommend that you refinance as quickly as you can regardless of how your investment is viewed by potential lenders. Keep the house until the market improves and sell as soon as you can regain your original investment.
One more thing I should tell you.... As of January 2008 THE CAPITAL GAINS TAX BREAK HAS BEEN REPEALED. What this means to you and (me) is that the tax break we used to qualify for if we lived in a home for 2 years out of the last 5 is now no longer in existence. When you do finally sell your home any money you make above the original purchase price will be subjected to the capital gains tax which is calculated based on everyday the home was no longer your primary residence. Simply put; if you turn a profit you will pay capital gains on it where as before you would be exempt from the tax. As a rental you can claim depreciation and a loss if you are losing money since your house is now considered a business as a rental. Talk to your accountant for details....
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
