Financing in 60123>Question Details

Kurt, Both Buyer and Seller in 60123

We relocated a year ago and have bought a new house. We could not sell our old one, so we now have a renter.

Asked by Kurt, 60123 Mon Aug 8, 2011

Our 7/23 baloon mortage is up next June. It looks like we are now upside down on this house. I don't think we will be able to get another morgage. What should we do?

0 votes Share Flag Financing in 60123

Help the community by answering this question:

Answers

4
I would consider contacting the current lender and seeing if they can offer you streamline type of refinance or to re-negotiate the note. I have several past client who have been successful in having the lender agree to a new 30 year fixed rate note. The alternative would be waiting until the rate adjusts and see where you're at. You might be surprised. The current rates are ridiculously low. Amid all the doom and gloom, I really don't seethe rate going up sharply;y over the next year. Don't worry you have time to consider many options.

Best of Luck!
Web Reference: http://www.AFN-Loans.com
0 votes Thank Flag Link Tue Aug 9, 2011
Your best option is to work with your current lender. It's unlikely that they want you to default on your mortgage, or will call your balloon payment due without being willing to discuss other options if you have no equity. It makes more sense for them to offer you a modification of terms on your mortgage, or an extension of the balloon payment period at the very least. You may need to show them that you had to relocate for a job opportunity, or some other valid reason. They may offer you a short refinance, a loan modification (yes, you can get modified on a former principal residence if you had to relocate), or they may offer to do a deed in lieu, or work with you on a short sale. Any of these options may be preferable to defaulting on your former principal residence.

Contact a HUD approved counselor on the makinghomeaffordable.gov website, and discuss your options with them.

And finally, be certain that your current mortgage situation on your new home is secure and fixed before taking any action that might cause any negatives on your credit rating, or flag you as ineligible for a refinance on your new home if that would be best, first.
0 votes Thank Flag Link Mon Aug 8, 2011
You can probably sell your home in a short sale if you are unable to make the payments. Since it is not your primary residence, there my be tax consequences which you should discuss with a tax attorney or CPA. You can call a local Realtor who can explain what the short sale entails. You may also want to call your lender and explain your situation. Sometimes they will have suggestions for you.
0 votes Thank Flag Link Mon Aug 8, 2011
Kurt,

You really only have two options. One, is to try and sell the home outright or as a rent-to-own (land contract), even if it's at a loss. Two, is to refinance the home as an investment property. Based on the info you've provided, I doubt #2 is a viable option since you'll need at least 20% in equity. You're in a tough situation, either way. Good luck.

Mike.
0 votes Thank Flag Link Mon Aug 8, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Home > Illinois > Kane County > Elgin > 60123 > Financing in 60123 > Question
Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer