Posted on: 01st Jul, 2009 02:51 pm
i have been reading about short refinances and loan modifications and i trying to see what can and will work for me best. i am hoping someone could give me advice and not try to sell me on how they can help. here is my situation.
2 years i lost my job because the company i was working for closed. i decided to start my own company that i ran out of my house. i opened a home equity line of credit with wells fargo and borrowed 80k to start the business. about 6 months ago i came to the conclusion it is more of a side business for me to make a few extra bucks and not enough for a full time income. so i got a full time job a few months ago in addition to my company as i couldn’t fully get my company off the ground.
so, now i am making enough with my new job to pay my monthly bills. the problem is i still owe that 80k. now since i am not using the money i am making from my company for my own personal use, i can start slowly paying back that 80k. after doing the math though, it looks as it is going to take me at least 3 years to do that.
i owe 420k on my first mortgage with aurora with an interest only loan at 7 1/8%. so in total i owe 500k and my home is worth 410k at best. i don’t want to be someone that just forecloses or does a short sale because home is worth less then what i owe. especially when i borrowed the 80k myself, but a part of me feels that i didn’t put myself in the position solely with me losing my job and the value of my house going completely down the toilet because of the economy.
please let me know what you think. any advice would be greatly appreciated. thank you.
2 years i lost my job because the company i was working for closed. i decided to start my own company that i ran out of my house. i opened a home equity line of credit with wells fargo and borrowed 80k to start the business. about 6 months ago i came to the conclusion it is more of a side business for me to make a few extra bucks and not enough for a full time income. so i got a full time job a few months ago in addition to my company as i couldn’t fully get my company off the ground.
so, now i am making enough with my new job to pay my monthly bills. the problem is i still owe that 80k. now since i am not using the money i am making from my company for my own personal use, i can start slowly paying back that 80k. after doing the math though, it looks as it is going to take me at least 3 years to do that.
i owe 420k on my first mortgage with aurora with an interest only loan at 7 1/8%. so in total i owe 500k and my home is worth 410k at best. i don’t want to be someone that just forecloses or does a short sale because home is worth less then what i owe. especially when i borrowed the 80k myself, but a part of me feels that i didn’t put myself in the position solely with me losing my job and the value of my house going completely down the toilet because of the economy.
please let me know what you think. any advice would be greatly appreciated. thank you.
Hi dnazzal!
Welcome to forums!
It would have been better if you could have refinanced both the loans into one at a low interest rate. However, as the value of the property has gone down, it won't be possible for you to get a refinance. You have further mentioned that you are now in a position to pay the debts because you have a new job in hand. In such a situation, I don't think the lender would agree to a loan modification.
In my opinion you should try out the option of short payoff refinance and check out if your lender agrees to it or not. It is the lender's discretion whether or not he would agree to it. If the lender does not agree to it, then you'll have to think about short selling the property.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
It would have been better if you could have refinanced both the loans into one at a low interest rate. However, as the value of the property has gone down, it won't be possible for you to get a refinance. You have further mentioned that you are now in a position to pay the debts because you have a new job in hand. In such a situation, I don't think the lender would agree to a loan modification.
In my opinion you should try out the option of short payoff refinance and check out if your lender agrees to it or not. It is the lender's discretion whether or not he would agree to it. If the lender does not agree to it, then you'll have to think about short selling the property.
Feel free to ask if you've further queries.
Sussane
Hey!
In continuing with what smithsuzanne said, I'll also suggest you go over forbearance terms with your lender if he isn't ready for short refinance.
In continuing with what smithsuzanne said, I'll also suggest you go over forbearance terms with your lender if he isn't ready for short refinance.