Posted on: 05th Nov, 2009 11:34 am
I purchased a second home in December of 08'. I put the first home on the market at a lower price than appraised, I also leased the 1st home with a month to month lease. I have not had any offers on the home and the person that is there now will be moving which puts me in a position. The value of the home has actually decreased further and as I am sure you have heard this before, I owe more on the mortgage than what it appraises for. I was thinking of a short sale or loan modification as the home is also a ARM but the ARM is not up for 5 more years. I really just want to get rid of the home but I do not see any light in the tunnel. Just looking for suggestions. I would rather not turn our credit bad but it seems that all options will mean doing just that. I will struggle if I have to make both payments and I hate the idea of having another tenant. I also do not have 25,000 laying around to re-finance to the appraisal plus 20%.
Hi,
Keeping both the properties will not be easy in this market. In this situation, I think either a short sale or a deed in lieu is the best possible option. If you do not want to keep the first home, it is best to short sell it. But given the fact that the home has been listed on the market for quite some time now, it is unlikely that you will immediately get short sale offers on the property. In case the property cannot be short sold, you can ask your lender to accept a deed in lieu on the property. Through the DIL, you can sign over the property to the lender, who will then sell off the property to recover the balance amount of the mortgage.
Keeping both the properties will not be easy in this market. In this situation, I think either a short sale or a deed in lieu is the best possible option. If you do not want to keep the first home, it is best to short sell it. But given the fact that the home has been listed on the market for quite some time now, it is unlikely that you will immediately get short sale offers on the property. In case the property cannot be short sold, you can ask your lender to accept a deed in lieu on the property. Through the DIL, you can sign over the property to the lender, who will then sell off the property to recover the balance amount of the mortgage.
Hi,