Posted on: 02nd Jan, 2009 08:04 am
My wife and I married almost 3 yrs ago, which enalbed us to make her existing home a rental. The home was purchaseed in the peek of the market with a subprime loan. The amount owed is 300K, value is about 220K. Payments on 1st and 2nd are $1868.00mo. not including taxes and insurance, total is about $2200.00mo. We rent out for 1350.00mo. This loss is slowly eating up our savings and we want to get out of this negative income. We have been current on our payments and have great credit but the loss of 10k a year for the last 2 years does not settle well and we do not see the market getting any better in the next 2 or 3 years. What are my options :?:
not many options here that are favorable, bond.
you can simply walk away, which will do a big number on your credit; you can negotiate with your lender to seek relief from the mortgage (perhaps a write-down of the balance or a reduction in the terms of the loan). you can sell it, seeking a short sale in which the lender will end up with a payoff far less than what is owed. of course, you can continue to see this eat away at your resources, as well. maybe you can find a new tenant, or increase the rent to the current tenant, making this an easier deal.
there may be other options, but i surmise that those are the likeliest scenarios at this time.
you can simply walk away, which will do a big number on your credit; you can negotiate with your lender to seek relief from the mortgage (perhaps a write-down of the balance or a reduction in the terms of the loan). you can sell it, seeking a short sale in which the lender will end up with a payoff far less than what is owed. of course, you can continue to see this eat away at your resources, as well. maybe you can find a new tenant, or increase the rent to the current tenant, making this an easier deal.
there may be other options, but i surmise that those are the likeliest scenarios at this time.
The house is in my wifes name only, how will this impact my credit, we do live in California?
your credit ought not to be affected. i cannot comment on the ramifications of your living in california, however.