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Hi All,
About 6 years ago my Husband (before I met him), bought a house in Michigan for 160k with a 3 year ARM. Before the ARM reset he refinanced for $5,000 into a 30 year fixed. About $140,000 is still owed on the house, it has a good chance of going for $100,000. We could probably scrape up $10k to cover the gap, and borrow another $10k from my parents.
Is it possible to get a loan for an additional $20,000 to cover the gap? Both my Husband and I own loan free vehicals, have credit scores in the 700s, and have never missed or been late on a mortgage payement ever. We both have been working in our jobs for over 5 years and net about 80,000 a year as a household.
I just don't know who to ask? The bank that holds the morgage? Just some random bank/credit union? Is it possible to go and just "get" a loan for $20k?
We do not have a problem making the morgage payments, we would not have a problem making the payments on a much smaller personal loan either. Is this even possible?
on a personal "signature" loan you're most likely going to be paying a high interest rate. Do you have to get rid of the house? Can you rent it out and cover your mortgage? The interest deduction on your taxes alone might be enough reason to keep it if you can cover the mortgage with rent. even if there's a minor gap every month, you could make up for it with your tax deduction possibly.
Other options:
1) Do short sale, agree to promissory note for difference - usually this note is at 0% interest.
2) Do short sale, get deficiency waived, take hit on credit.
3) Let it go to foreclosure, possibly be sued for deficiency.
If it were me and I could cover the mortgage with rent (or close to it), I'd do that and take the interest deduction when I filed taxes and try to break even. Either that or do a short sale w/ promisory note.
Thanks for the info to consider, I was worried that doing a short sale and agree to a promissary for 0% might have an impact on our credit?? Maybe it won't?
Renting is another option to keep the property for now, when I first looked into that option we would be short a few hundred dollars a month between the rent and the payment.
The reason for wanting to sell the house is that we have inherited a house fully paid off, and would prefer to live in that part of the country....Oh wait, does that mean I could take out an "equity loan" on the new house? Thanks for any advise on bridging that gap!
Thanks for the info to consider, I was worried that doing a short sale and agree to a promissary for 0% might have an impact on our credit?? Maybe it won't?
Renting is another option to keep the property for now, when I first looked into that option we would be short a few hundred dollars a month between the rent and the payment.
The reason for wanting to sell the house is that we have inherited a house fully paid off, and would prefer to live in that part of the country....Oh wait, does that mean I could take out an "equity loan" on the new house? Thanks for any advise on bridging that gap!
Late payments will be the first thing to hit your credit. I think that if you missed no payments and got the bank to agree to a short sale w/ you paying back the difference on a promissary note that it would not hurt your credit. Some banks will make you miss a payment to consider you for a short sale though. It also depends how the incident is reported to the credit bureaus.
It might also be worth it to lose a few hundred a month and rent it out and sell in a better market.
Thanks for the info to consider, I was worried that doing a short sale and agree to a promissary for 0% might have an impact on our credit?? Maybe it won't?
Renting is another option to keep the property for now, when I first looked into that option we would be short a few hundred dollars a month between the rent and the payment.
The reason for wanting to sell the house is that we have inherited a house fully paid off, and would prefer to live in that part of the country....Oh wait, does that mean I could take out an "equity loan" on the new house? Thanks for any advise on bridging that gap!
You can absolutely take equity out of this property to cover the shortfall. Just be honest about what you want the money for if asked. I would do it as a HELOC so you are not obligated for any more than the exact amount needed. Open it now and you can just write a check from it when you sell your other home.
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