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Old 04-14-2010, 01:58 PM
 
741 posts, read 1,217,984 times
Reputation: 1221

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I am so fustrated and trapped feeling right now, any input on the following would be so very, very welcome!

My Husband and I own a house in Michigan that is way undervalue and we can not unload it, it has been dangling out there for going on five years. We could probably sell it if we brought 30-40K to the table.


I just happen to have 30-40K sitting in my Saving Account, I have been pennypinching for years now to save a downpayment for a new house in the state we reside in now. Currently we are living rent free in a borrowed home (the downside is it is pretty much condemned and has no interior walls, no heat etc but we are lucky to have been able to live here free)

The dilemma!

Should I bring all our nest egg to closing and just dump the MICHIGAN HOUSE so we can just start fresh? Of course this means we have no downpayment money

OR

Should I use my downpayment money to buy a house were we live now and carry two mortgages for a bit, and possibly take out an equity line on the new house and use that 30-40K to sell off the Michigan house. Is that senario even possible??

Please help! I would be so happy to hear any input, my husband and I are really struggeling with the options.
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Old 04-14-2010, 03:00 PM
 
1,989 posts, read 4,275,600 times
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Before you make any decisions, consider that some major principal forgiveness programs are supposed to be in the pipeline. They're discussing the idea with the big banks in Congress this week.

I think what I read is that you qualify if you stay in the home for 5 more years. Not sure if you want to do that, but they also haven't entirely worked out the terms, so it's at least something to check into.

GOOD LUCK!
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Old 04-14-2010, 03:06 PM
 
Location: Barrington
63,957 posts, read 43,658,002 times
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Consult with both a financail planner and an attorney before you do anything so that you understand long terms consequences.
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Old 04-14-2010, 04:02 PM
 
Location: Salem, OR
15,204 posts, read 38,007,040 times
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I would also talk with a lender because if you don't qualify to carry two mortgages then it removes that option for you.
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Old 04-14-2010, 04:15 PM
 
359 posts, read 1,072,547 times
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Have you considered leasing it? I'm in Michigan leasing a condo right now in Livingston County and there is a wait list for the units. At least it would offset or maybe cover your mortgage. What area is it in?
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Old 04-14-2010, 10:53 PM
 
Location: Suburban Chicago
163 posts, read 433,415 times
Reputation: 146
How much could you save each month in your rent free house if you didn't have the mortgage payment? If you unload the house and can save up enough for even a minimal down payment in six months or less that's probably your best bet particularly if the MI house is still losing value. Why keep throwing good money after bad?
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Old 04-15-2010, 10:06 AM
 
Location: Northwestern VA
982 posts, read 3,357,784 times
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Excellent point. You definitely need to speak with a lender.

Have you been pre-approved to buy another house? FHA financing has lower down payment requirements. So if the amount you have to bring to the table is closer to $30K and you have $40K, FHA may make it possible for you to buy another home.

Quote:
Originally Posted by Silverfall View Post
I would also talk with a lender because if you don't qualify to carry two mortgages then it removes that option for you.
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Old 04-17-2010, 10:23 AM
 
8,231 posts, read 13,403,545 times
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Quote:
Originally Posted by middle-aged mom View Post
Consult with both a financail planner and an attorney before you do anything so that you understand long terms consequences.
Both hard to find the right ones for a situation, both very expensive. I don't want to speak for the OP but I think she's here because she wants ideas from forum members because she doesn't have the money for such.
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Old 04-17-2010, 03:43 PM
 
Location: Tempe, Arizona
4,511 posts, read 13,040,651 times
Reputation: 2200
Quote:
Originally Posted by middle-aged mom View Post
Consult with both a financail planner and an attorney before you do anything so that you understand long terms consequences.
Quote:
Originally Posted by Giesela View Post
Both hard to find the right ones for a situation, both very expensive. I don't want to speak for the OP but I think she's here because she wants ideas from forum members because she doesn't have the money for such.
But not consulting with qualified professionals on such a major financial and legal issue will likely cost more than the money saved by not doing it. The advice here is at best only based on incomplete information and could do more harm than good. The OP said she has $30-40K available - spend some on professional advice.
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