Financing in Raleigh>Question Details

Fuzzman, Home Seller in Raleigh, NC

I have an 80/20 mortgage on a home I am upside down in by 20K. Can I roll this debt into another loan with the same company on a foreclosure home?

Asked by Fuzzman, Raleigh, NC Sun Aug 7, 2011

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Conder Realty, LLC’s answer
Below are all very good answers to your question. Here's a solution to purchase and keep your good credit- Lease the 1st property and buy the 2nd. If you can improve your equity position to 30% equity in the 1st home(which its sounds like you may not) you can move forward as soon as you have a lease. Otherwise, lease your property for 1 year to report on your taxes the rental income. You will be able to claim 75% of the rental income towards your debt ratios for a new loan on the second house. This allows you to take advantage of mortgage rates and low housing prices! Once you close on the second house, you can short the first or have a property management company like Conder Realty manage your tenants. Remember, if you short, its likely to get a 1099c from your lender which will bring income tax liability on the federal and state levels unless you can show insolvency. See a CPA for tax advice. - Jimmy Conder, Conder Realty, 896.7131
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1 vote Thank Flag Link Fri Aug 26, 2011
Do you want to buy the new house with a negative down payment of $20K or do have actual cash to use as a down payment? No cash, no can do.
0 votes Thank Flag Link Wed Aug 10, 2011
You need to speak with your mortgage company, if it is a large bank, they may not be flexible enough to help you out. Either way, the first step is to talk to mortgage company. Unless the new loan is going to put you closer to a 70/30 or 60/40, I doubt they are going to want to talk to you further about rolling into a foreclosure.
0 votes Thank Flag Link Sun Aug 7, 2011
It is very doubtful, your best bet may to sell that home via a short sale and try and negotaite forgivness of that debt. You should ask your current loan officer for details. Good luck working things out.…

Pleasen see my blog for tips and advice on getting a short sale approved
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0 votes Thank Flag Link Sun Aug 7, 2011
The simple answer would be no, with one possibility. If you can borrow enough money on the new property to pay off the second loan on the first property entirely, then it would work. You can always fully pay a loan and if you get enough to pay it off entirely, the bank will be happy to take your money. The problem is you will not get excess funds out of your purchase of the new home, so you would have to have sufficient cash to make it work. If you have that kind of cash, you could sell the first home, bring cash to closing to cover the full payoff of the loans and buy the new home. If you do not have that kind of cash, you can do a short sale of the first home (see and try to buy the second home before the short sale of the first home affects your credit. Like I said, the most likely answer is no. Good luck.
0 votes Thank Flag Link Sun Aug 7, 2011
You may be upside down (on paper) for the moment, but you still have the same mortgage interest and tax deductions as before. Your current options include paying more towards principal (which you can usually do at anytime) and/or just hold on for a few more years until values return.
0 votes Thank Flag Link Sun Aug 7, 2011
hmmmm No. Residential loans cannot be bundled at the consumer level.
0 votes Thank Flag Link Sun Aug 7, 2011
I am doubtful of that. If you are very strong financially with good cash reserves, you may qualify for another (totally separate) loan for a foreclosure home. You can always talk with a lender about the possibilities.
0 votes Thank Flag Link Sun Aug 7, 2011
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