Posted on: 28th Jan, 2009 07:55 pm
We currently own house A and are now "underwater", although we can absolutely keep paying our mortgage without issues. Unfortunately, we don't like where we live and would like to move to another area in the state. If we were to sell house A for a loss, is there a way to transfer the balance of what we owe onto a mortgage for house B without an impact on our credit score?
Do you have down payment money for the new home? If so, then you may have to use some of that to get yourself at "water level". For example, if the home is worth $10k less than what you can sell it for, then you sell it and pay the $10k to the bank at closing.
You can also appeal to a realtor. Sign a contract where you promise to use them for the purchase of your new home if they only charge about 2% on the sale of your existing home. The savings in fees will help in reducing your out of pocket expenses on the sale.
You can also appeal to a realtor. Sign a contract where you promise to use them for the purchase of your new home if they only charge about 2% on the sale of your existing home. The savings in fees will help in reducing your out of pocket expenses on the sale.
We do have about $50K in cash, but are probably about $125K underwater in the mortgage (estimated decrease in value since Sept '07 when house was purchased!). I'm guessing that the only reasonable option would be to rent out our house (also for a loss) until the market improves, although we'd love to just cut our losses now.
Hi Guest!
Welcome to forums!
If you are delinquent on your payments, and apply for a short sale or a deed in lieu, then your credit will be affected. Apart from reducing your credit by 75-100 points, in short sale, you will have to pay the deficient amount to the lender. In case of a deed in lieu, your credit will drop by 250 points but you will not have to pay for the deficiency. Thus, in my opinion, it would be better if you can rent out the property.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
If you are delinquent on your payments, and apply for a short sale or a deed in lieu, then your credit will be affected. Apart from reducing your credit by 75-100 points, in short sale, you will have to pay the deficient amount to the lender. In case of a deed in lieu, your credit will drop by 250 points but you will not have to pay for the deficiency. Thus, in my opinion, it would be better if you can rent out the property.
Feel free to ask if you have further queries.
Sussane