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I was recently offered a great job out of state and will be relocating soon. From the looks of the market, we likely will not be able to sell our house for the remaining loan balance (only one loan). The difference will be $8,000 to$10,000. What options do i have? I would have no problem taking out a loan to cover the difference. Does such an option exist? I would consider short sale as last resort.
A bank would lose more than 10k on a foreclosure. The problem would be convincing them that you would be willing to walk away. If you have PMI you could sign a promissary note for the difference it that's what it takes to complete a short sale.
It depends upon the bank. I had one seller recently where Bank of America offered him a 10K note, interest free for 20 years (25K).
I suspect if you are willing to take back a note, you're not going to have much of a problem and may not have to go the short sale route......
Find yourself a good realtor (experienced in short sales) to walk you through the short sale process. Many of the short sale contracts come back with a note for the seller to sign.
You may get lucky with your lender splitting the difference. Just don't let your payment get behind, that will be the death of a purchase for 3 years.
You could ask, but without a contract, there won't be much weight to any answer you receive.
I was recently offered a great job out of state and will be relocating soon. From the looks of the market, we likely will not be able to sell our house for the remaining loan balance (only one loan). The difference will be $8,000 to$10,000. What options do i have? I would have no problem taking out a loan to cover the difference. Does such an option exist? I would consider short sale as last resort.
Thank you for your help.
Keith
For that small of shortfall, you will be much better off by just finding a way to cover the difference (personal loan, loan against vehicles or other assets ,or even credit card advances). The lender probably would not grant you a short sale if you have the means to make the monthly payments. Plus a short sale is a big hit to your credit.
After going through 2 short sales I would just try and get a personal loan. One short sale took 6 months the other is going on 1 year. In the end they will try and get you to sign a note or just bring that amount to closing so I would do whatever you need to try and cover the difference. Short sales are a HUGE pain and should be avoided if you can.
I am completely willing to sign a note for the difference, but how does that work? Do I have to begin the short sale process in order to get there? Do I just show up at closing with empty pockets?
I am completely willing to sign a note for the difference, but how does that work? Do I have to begin the short sale process in order to get there? Do I just show up at closing with empty pockets?
I'd like to know the answer to this, too. As I mentioned in another thread in this forum, we're not really underwater but with the new lower selling price of our house we won't have enough cash to go to closing. Our lender (Wells fargo) told us that we have to be 30 days behind to start the short sale process, but I'd much rather do the promissory note option if at all possible.
Call your lender and explain to them what you are wanting to do. I can't imagine a lender would say no to your proposal. Short sale the property and pay the difference. As your lender will your credit take a hit if you sign a note to pay the balance. Understand that the bank knows it will cost them more than 8-10k to do a foreclosure. If you were my client I would jump at your offer.
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