Posted on: 19th Jun, 2009 10:36 pm
Seven years ago I sat down at a table with two crooks who sold me my current home for 52,000. They told me that I had 20% equity in my home since it was a foreclosure. I believed what they said because I didn't really know what all of that meant. I assumed that I was getting a good deal. Well, after about a year I realized that I had moved my young daughter to a less than desirable neighborhood and the house had some problems. Being a single mom who was more "house poor" than "house smart" I have struggled with the problems dilemma that comes with not being house savvy. I was very naive and did not understand terms like closing costs and home inspection. I really walked into this deal blind and now I am paying the price drastically changed in my life that have forced me to reconsider staying here another day. I tried selling my house two years ago before the housing bubble burst here in NC but to no avail. I would like to walk away from my home but I am afraid of the consequences. I can not afford to fix the problems in this house and want to sell it as is. Will Citi go for this? At this point I prefer to rent an apartment then live here another day. I figure that for what I pay in rent is the same as what I pay in gas since it has now risen to almost three dollars a gallon and I could enjoy the amenities that are surely lacking out here in the boonies. My credit isn't the best in the world but I don't want to totally tank it either by walking away from my home. I have struggled for years to pay my mortgage and once again I am back current on my loan. I do not want to face foreclosure again! Those months I spent worrying about my mortagage kept me from getting a good night's sleep. I don't want to go down that road again.
I have heard of short sales, deeds in lieu of trust, etc. What would the best option for me? I figure that if I lay low on the credit radar--I have no plans on buying another car or another house for at least five years-- I shouldn't have anything to worry about.
Right?
I have heard of short sales, deeds in lieu of trust, etc. What would the best option for me? I figure that if I lay low on the credit radar--I have no plans on buying another car or another house for at least five years-- I shouldn't have anything to worry about.
Right?
Well, I assume you cant sell the house for what you owe. If not then, you could walk away but you are responsible for the loss the mortgage company takes once they sell it. If they loose 10k after they subtract what you owe plus all there costs in foreclosure. Then you will be left with a 10K judgement that will follow you for years to come. The best bet would be to sell it even if you just break even. I would think after 7 years of paying you would have gotten somewhere on the mortgage balance. Those are some thoughts. If you care to comment on the balance and what the estimated value of the home is we can look at it a little closer.
walking away, in my opinion, is too easy and wrong. as matthew pointed out, the lender still would need to take legal action (foreclosure) and there'd be issues with that as far as you're concerned. selling, whether a short sale is needed or not, would seem to be the best course. repairs needed on the home would, of course, be considered by anyone who wishes to purchase it.
Thank you for responding! You're right, Matthew and George, that walking away is just wrong. The bank had faith in me to repay this loan so I should stand by their trust. I hear of people doing it quite a bit who owed hundreds of thousands on their homes and they make it seem so easy. I guess those same folks neglected to tell me about the SERIOUS legal and financial reprecussions (i.e. a 50 caliber to the old FICO score).
I do owe 48,000 on this house. I pay under 430 a month. I know that is not a lot considering there are people who pay triple that every month. About three hundred dollars of that monthly payment go to INTEREST!!!! i really didnt research this loan or anything seven years ago.
Yet, I really do need to move. I need to live closer to work and now I have a young son so my lifestyle has taken a dramatic change since 2002. Should I rent? That is the question. I really don't want any more ties to this area but would that be a better option?
I do owe 48,000 on this house. I pay under 430 a month. I know that is not a lot considering there are people who pay triple that every month. About three hundred dollars of that monthly payment go to INTEREST!!!! i really didnt research this loan or anything seven years ago.
Yet, I really do need to move. I need to live closer to work and now I have a young son so my lifestyle has taken a dramatic change since 2002. Should I rent? That is the question. I really don't want any more ties to this area but would that be a better option?
i believe that would be a better option, yes. but in order to make that determination, you'll want to find out what a reasonable rental would be. a realtor can help you with that. also, with whomever you find that might rent from you, be certain to have a credit report available for your review. if that means the prospective tenant goes and gets it for your review, that's fine. you won't be able to get one on your own. if you work with a realtor (not suggesting that one way or the other) then the realtor can probably pull a credit report on your behalf.
your debt isn't that high - if you get $600 or more rental income, that would cover your payment and leave a bit for you as well.
your debt isn't that high - if you get $600 or more rental income, that would cover your payment and leave a bit for you as well.