Posted on: 21st Jan, 2010 09:33 pm
Hi, my name is Patrick and am on a dilema of what to do with my property. Let me explain you my situation. I bought my house in 2004 for 350,000. I put 70,000 down so my loan ended up to be 275,000 with a 5 year interest only and variable afterwards. I lost my job last year and had to go to unemployment checks...I asked to my lender to give me a break and what they did was to extend the interest only period to another 5 years. Currently am about to file bankrupcy for all my credit cards and some other bills. I will keep my car but my dilema is about my house...what to do or better said what can I do...do I try to get a modification of my loan with a fix 30 year payment that I can afford? or do I try to do a short sale? or is there any other options for me? Please help me with this situation...Thanks.
Hi fitzgerald,
Can you continue making interest only payments on the loan? If you can, then the bankruptcy will not affect your mortgage. You can reaffirm your mortgage and keep making the interest only payments on time. As long as you are making the payments, the lender will not come after you.
A loan modification will also be a good option for you. You can apply for the modification. If it is accepted, you will be offered a trial plan. If you make payments on time as per the trial plan, you will be offered a permanent modification plan.
A short sale will not help you save your home and it will also affect your credit adversely to a great extent. Thus, if you want to stay in your property, a loan modification is a better option than a short sale. However, make sure you keep making the interest only payments till the time your request for modification is accepted.
Can you continue making interest only payments on the loan? If you can, then the bankruptcy will not affect your mortgage. You can reaffirm your mortgage and keep making the interest only payments on time. As long as you are making the payments, the lender will not come after you.
A loan modification will also be a good option for you. You can apply for the modification. If it is accepted, you will be offered a trial plan. If you make payments on time as per the trial plan, you will be offered a permanent modification plan.
A short sale will not help you save your home and it will also affect your credit adversely to a great extent. Thus, if you want to stay in your property, a loan modification is a better option than a short sale. However, make sure you keep making the interest only payments till the time your request for modification is accepted.