Posted on: 13th Dec, 2012 10:08 pm
I purchased a small house in Michigan for $85,000 using a rural development loan. This was in the year 2005.I was on the home and loan alone.I am now married with two kids and have since purchased a second home that will suffice for the rest of my life. The old house is currently empty and I'm spending $670 a month for mortgage/insurance/taxes. The house is worth $30,000 and I can't even rent it for the $670 a month. I imagine it will take 10-15 years before I could even break even on selling it, not to mention paying on it for 10-15 years. Should I foreclose on it? Both my wife and I have 800 credit scores. I understand my credit will be shot but her credit should be fine for whatever loans we need in the future. I absolutely hate the idea of walking away but it just seems the smart thing to do. What to do?
hi guest,
rather than immediately walking away from the property, it will be better if you could get in touch with your lender and apply for a deed in lieu of foreclosure. this will help you in getting rid of the property and you won't be liable for paying the deficient balance resulting from the sale of the property.
thanks
rather than immediately walking away from the property, it will be better if you could get in touch with your lender and apply for a deed in lieu of foreclosure. this will help you in getting rid of the property and you won't be liable for paying the deficient balance resulting from the sale of the property.
thanks
While it may be true in a rural area to have to wait a while longer then a populated area for the home price to rebound, but you could look at it like this. So it takes 10 years to recover to original purchase price. That would be 17 years paid on the mortgage, so your mortgage balance would be much less then the original price. Now you have equity in it. In 13 more years, its paid in full. If you used a renter and lost 100-200 a month, would it make sense to save your credit and have another person make most of the payment for you, build equity and then sell or continue renting it out or damage the possiblity of needing your income on another home loan in the future? If you could invest 100-200 a month, in 23 years, your max cost is 55k, and if you sold it for original price, you earned a profitt or continue to rent it out and use for supplemental income. Not and easy decision, but good luck
