Posted on: 07th Apr, 2010 06:41 pm
my husband and i are in a losing situation with our bad mortgage and we are unsure what to do.
he has filed chapter 13 and his entire check is going toward debt payment and the mortgage. we are basically living on my salary, which is stretched very thin and sometimes doesn't cover everything.
he thinks we should walk away from our house and become renters and perhaps in a couple of years, start over as home owners. this way we might save $500 a month, excluding property taxes.
we have little to no equity in our home. our interest rate is outrageous. i am not on the deed or title. we thought perhaps if he stopped the chapter 13 (or took the house out of it), we might quit claim the house to me and try to refinance, but isn't that nearly impossible with no equity?
my credit rating is also low, around 610. we thought to start over with my buying a house, but i am sure no lender is willing to work with my credit. of course, if we could get out of this current mortgage, we could more than afford a cheaper house.
is my husband's solution the only way out? i don't feel right walking away from this house and accepting foreclosure.
he has filed chapter 13 and his entire check is going toward debt payment and the mortgage. we are basically living on my salary, which is stretched very thin and sometimes doesn't cover everything.
he thinks we should walk away from our house and become renters and perhaps in a couple of years, start over as home owners. this way we might save $500 a month, excluding property taxes.
we have little to no equity in our home. our interest rate is outrageous. i am not on the deed or title. we thought perhaps if he stopped the chapter 13 (or took the house out of it), we might quit claim the house to me and try to refinance, but isn't that nearly impossible with no equity?
my credit rating is also low, around 610. we thought to start over with my buying a house, but i am sure no lender is willing to work with my credit. of course, if we could get out of this current mortgage, we could more than afford a cheaper house.
is my husband's solution the only way out? i don't feel right walking away from this house and accepting foreclosure.
Hi Guest,
If there is no equity in the property, then you won't be able to refinance the loan though it is transferred in your name. Moreover, with a credit score of 610, it will be quite difficult for you to get a conventional loan to refinance the existing mortgage. However, with a credit score of 610, you can apply for a FHA loan to buy a new property.
If your husband stops paying as per the payment plan, the bankruptcy will be dismissed and the lender will have the rights to foreclose it. Rather than letting the lender foreclose the property, it would be better if your husband can contact the lender and check out if he could give him a better payment plan.
If there is no equity in the property, then you won't be able to refinance the loan though it is transferred in your name. Moreover, with a credit score of 610, it will be quite difficult for you to get a conventional loan to refinance the existing mortgage. However, with a credit score of 610, you can apply for a FHA loan to buy a new property.
If your husband stops paying as per the payment plan, the bankruptcy will be dismissed and the lender will have the rights to foreclose it. Rather than letting the lender foreclose the property, it would be better if your husband can contact the lender and check out if he could give him a better payment plan.