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I bought this house 5 years ago, and have put about $10k into fixing it up. The market has tanked, and now I'm in a bind. My job and personal situation has changed, and I can no longer be comfortable living here for several reasons, both financially and mentally.
I currently owe $97k. In December it appraised at $87k. The market in my neighborhood hasn't gotten any better, so I'd be surprised if it would appraise for any more now. Throw in realtor fees and possible closing costs, and I'd likely have to bring $20k to the closing table, after paying off $7k and putting $10k in it. I only gross about $37k per year, so that isn't a likely scenario. How would I even get a bank loan for that? If you know, please tell me.
I can't refinance, being under water, and just found out that I can't rent it out due to FHA rules. I wouldn't qualify for a "hardship" to short sell, and I already have a bankruptcy/foreclosure on my record from my divorce in 2005. Preserving my credit rating is very important to me.
So what can I do? Mentally and emotionally, living here is extremely detrimental to my well being. And it's starting to drain me financially, which is making it worse.
I currently owe $97k.
In December it appraised at $87k.
...and just found out that I can't rent it out due to FHA rules.
In short... F the rules. Rent it.
The only alternative is to stop paying the mortgage and wait for them to force the issue.
I bet they'll prefer getting the payment every month... and in time the market may turn.
That's my recommendation for now, as well, plus SAVE that rent money until you have enough to get out from under that house. Even if you can rent it, you have the problem of the tenants tearing up the house and costing you even more money, unless you know them well and they respect property.
Also consider some sort of second job and SAVE that income, as well. Again, aim for a short term, reasonable time frame so you don't burn out.
You may eventually have to declare bankruptcy but this might be a way to keep your credit intact for another two years or so. Also have a Plan B, like moving into a relative's basement if you have a heart attack or some other life-changing event that wipes you out.
I bought this house 5 years ago, and have put about $10k into fixing it up. The market has tanked, and now I'm in a bind. My job and personal situation has changed, and I can no longer be comfortable living here for several reasons, both financially and mentally.
I currently owe $97k. In December it appraised at $87k. The market in my neighborhood hasn't gotten any better, so I'd be surprised if it would appraise for any more now. Throw in realtor fees and possible closing costs, and I'd likely have to bring $20k to the closing table, after paying off $7k and putting $10k in it. I only gross about $37k per year, so that isn't a likely scenario. How would I even get a bank loan for that? If you know, please tell me.
I can't refinance, being under water, and just found out that I can't rent it out due to FHA rules. I wouldn't qualify for a "hardship" to short sell, and I already have a bankruptcy/foreclosure on my record from my divorce in 2005. Preserving my credit rating is very important to me.
So what can I do? Mentally and emotionally, living here is extremely detrimental to my well being. And it's starting to drain me financially, which is making it worse.
Why can't you rent it? Its 5 years later. I think after two years you can rent it out. If you want to save your credit renting it is your only option until prices go up high enough to sell it.
The only reason you wouldn't be able to rent it would be if you had a state bond loan and FHA insured it (basically an FHA loan with restrictions)
I agree, rent it. Document everything else you have state here. If you have had issues with depression, document that too (copies of RX receipts, doctor visits). It is highly unlikely anyone would come after you (but be discreet). What are they going to do, sue you for being responsible in troubled times?
The only reason you wouldn't be able to rent it would be if you had a state bond loan and FHA insured it (basically an FHA loan with restrictions)
I agree, rent it. Document everything else you have state here. If you have had issues with depression, document that too (copies of RX receipts, doctor visits). It is highly unlikely anyone would come after you (but be discreet). What are they going to do, sue you for being responsible in troubled times?
OP, For better/more advice, you really need to be more specific as to why you cannot rent it due to FHA rules.
I agree, rent it out. The only way they will find out is if they investigate you and the only way they will investigate you is if your payments are late. So rent it out and make your payments on time all should be fine.
The market tanked longer than 5 years ago! Proceed with a deed in lieu of foreclosure.
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