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Old 08-27-2013, 07:33 AM
 
Location: Austin, TX
8 posts, read 12,562 times
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Lets say my spouse and I get a house (new or old) and start financing and paying mortgage then suddenly decide to move to another town after a year or two, what would happen? is there a negative impact to our credit? Are we paying the whole balance of the house or we would just put the house back to the selling market? Are we going to owe something or get something back? Im a nurse sorry have no clue with realty
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Old 08-27-2013, 07:46 AM
 
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As long as you are not late on the payments, it won't hurt your credit.

When you say move to another town, do you mean buying or renting?
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Old 08-27-2013, 08:47 AM
 
Location: Boise, ID
8,013 posts, read 22,537,670 times
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Quote:
Originally Posted by chasehunter View Post
Lets say my spouse and I get a house (new or old) and start financing and paying mortgage then suddenly decide to move to another town after a year or two, what would happen? is there a negative impact to our credit? Are we paying the whole balance of the house or we would just put the house back to the selling market? Are we going to owe something or get something back? Im a nurse sorry have no clue with realty
You have to pay off the full outstanding balance of the loan, regardless of what the current market is. If you can't afford to do that, you have to negotiate a short sale, which will hurt your credit, often a lot. You also have to pay your closing costs. Whether you owe or get something back will depend on how much you put down when you bought the house. If you put 10% down or more, you'll likely get some money from the deal. If you put down less than 10%, you may have to pay.
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Old 08-27-2013, 08:55 AM
 
Location: Austin
7,082 posts, read 16,911,735 times
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Quote:
Originally Posted by chasehunter View Post
Are we paying the whole balance of the house or we would just put the house back to the selling market?
This is not an "or" question. This is more than likely an "and" statement. Of course you would have to pay the whole balance if you don't plan on turning it into a rental property and you're selling it. And to sell it, yes you put it back on the market for another person to buy. If you want to keep this house and also buy a new house, you have to be able to qualify/afford both mortgages.

Am I readying you question as you're thinking you might get a discount for your payoff because you don't own the house very long? You committed to paying a certain amount back to the bank, and the only way to not pay it is to Short Sale it (which will hurt your credit) or let the bank take it in a Foreclosure (which will hurt your credit).
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Old 08-27-2013, 09:01 AM
 
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Are you planning to sell the house and move, or would you just walk away and leave it? Which one you plan to do will determine what happens. If you sell the house, you would pay off the remaining mortgage from the proceeds. If there is anything left over, you get to keep that. If the house sells for less than the balance you owe on the mortgage, you would have to make that up. If you just walk away from the house and stop paying the mortgage, you would likely eventually find yourself with significant financial and legal difficulties.
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Old 08-30-2013, 12:39 AM
 
Location: Austin, TX
8 posts, read 12,562 times
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Its basically moving to another town and start new mortgage there. The house that I'm leaving will be put back to market coz I'm giving it up.

So meaning if my house is 200K and after 2 years I sell it put it back to market, the value of it will be deducted and I will pay for the difference? House value lets says is 160k after 2 years, and I have paid 20k so far then I owe another 20k?
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Old 08-30-2013, 05:50 AM
 
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No, you owe what ever the balance is on your mortgage.

Let's say you bought your house for $ 200,000 and put down 10% . 10% is $ 20,000. That means you financed $ 180,000.

When you sell, you have to pay back $ 180,000, less whatever mortgage payments toward the principal of the loan you have made. In the early years of the mortgage, your payments are mostly toward interest, so you would owe and have to pay back almost $ 180,000.

Even if the value of the house drops, you still owe what you borrowed. If you can't get
$ 180,000 out of the house, then you have to hope you can do a short sale or the bank may foreclose. If you short sale or foreclose, you won't be able to buy another home for quite some time. Those two things really make a mess of your credit.
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Old 08-30-2013, 07:24 AM
 
7,672 posts, read 9,342,441 times
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Also let's say your balance is $180K for your mortgage. And you use a realtor to sell the home. You would have to sell it for at least $195,000 to pay off the mortgage, 6% realtor commission and any closing costs. Hopefully your comps in the area will support that figure. Anything less than that selling amount, you will have to pay for the difference.

Also do you have an early prepayment penalty on your mortgage? It's rare but I have seen some with it.
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Old 08-30-2013, 01:22 PM
 
Location: Phoenix, AZ > Raleigh, NC
14,320 posts, read 17,531,665 times
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Quote:
Originally Posted by chasehunter View Post
Its basically moving to another town and start new mortgage there. The house that I'm leaving will be put back to market coz I'm giving it up.

So meaning if my house is 200K and after 2 years I sell it put it back to market, the value of it will be deducted and I will pay for the difference? House value lets says is 160k after 2 years, and I have paid 20k so far then I owe another 20k?
Another point: The vast majority of the $20K you've paid so far has gone to interest. Very little of it has gone towards the principal of the loan - the amount that you actually borrowed and promised to pay back, plus interest.
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Old 08-30-2013, 02:39 PM
 
Location: Boise, ID
8,013 posts, read 22,537,670 times
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Quote:
Originally Posted by Jkgourmet View Post
Another point: The vast majority of the $20K you've paid so far has gone to interest. Very little of it has gone towards the principal of the loan - the amount that you actually borrowed and promised to pay back, plus interest.
I noticed that too. If they really have paid off $20k in principal, it must have been a very short term loan, like a 10 year or less. If it was a 30 year loan, they have likely only paid back a couple thousand.
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