Home Selling in 49329>Question Details

R3d Myst, Both Buyer and Seller in 49329

Our house is too small for our growing family and mother in law who is living with us and is worth less than we owe by about 30%, what can we do?

Asked by R3d Myst, 49329 Fri Mar 18, 2011

We have a home that is in the current market only sellable for two thirds of what is currently owed on it. We have a 9 year old daughter and a 5 month old boy, and mother in law who lives with me and my wife. We have been approved to buy a bigger home but can't move our current house because it will not sell even close to what is owed, what can we do? We have 2 bedrooms and an office/den that our daughter uses as a bedroom and can't be considered a bedroom because the window is by code not big enough/ to high to escape from in emergency.

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Unfortunately there are not a lot of options available to you that may not adversely affect your credit in some fashion. A short sale will effect your credit and probably eliminate your ability to get the new loan for your new home. In addition you could potentially be responsible for the balance of debt on your home that the short sale did not cover or be responsible for payment of taxes on the amount of the loan that was forgiven. If you can qualify for the loan on your new house without selling the old one then renting it out may be your best option. You would have to talk that over with your lender.
I would be happy to talk more with you about what your options may be. My office is in Newaygo and I deal a lot in the Howard City area. Give me a call or shoot me and email.
0 votes Thank Flag Link Sat Mar 19, 2011
R3d Myst:

Is the approval based on selling your existing home?? If not, the only option that is available is to lease the current home unless you have the money to pay the difference between what you sell it for and what you owe. If you try a short sale it's going to effect your credit which may cause your new loan to be denied. You must be approved for a mortgage that includes the debt of your first mortgage or current home. Most lenders will not consider the rental money you receive for your current home as a basis for qualifying for a new mortgage. Unfortunately, alot of homeowners were buying new homes and letting their old home go into foreclosure so the lenders have made rules to avoid this. You need to talk to your current lender and see if they have any alternatives for you.

Good Luck,

Karen Paytas, GRI, CMS
Realtor
0 votes Thank Flag Link Fri Mar 18, 2011
You have a few options but it's important to understand all aspects before proceeding. First, you could lease the home and purchase a new one assuming that the loan you are approved is not based on you selling your current home. Certain restrictions may apply so check with your lender.

Second, you may be able to do a short sale if the lender will allow it but make sure that it will not affect your credit scores or put the new loan you're approved for in jeapordy. Talk to an experienced short sales realtor in your area and lender to get all of the ins/outs for this.

Third, and probably not the most popular option, you could stay put for the time being and see what type of cost effective adjustments you may be able to make to your home, i.e. enlarge the window to the office/den.

Finally, it sounds like financially you are saying that you can't afford to sell, take the loss and purchase another home. However, it may in the end be your best option if you can't wait to sell. Consider the fact that the loss you take on this home will make up on the savings you get with a new home considering the market in down in your area so the same 30% can be made up in the puchase of a bigger home for much less.
0 votes Thank Flag Link Fri Mar 18, 2011
I just emailed you back, not sure if you received it. I'm up now, if you want to call - 561-361-1909. I would be happy to answer all your questions, just a lot to write in an email.

Eli Givoni, Director
Short Sale Department, LLC
561-361-1909
info@shortsaledept.com
http://www.shortsaledepartment.com
Serving all 50 states

MARS Disclosure for General Commercial Communications
IMPORTANT NOTICE:
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
0 votes Thank Flag Link Fri Mar 18, 2011
I'm sorry to hear that..but that is the market that we are living in today. My first guess is that you bought in 2005 at the height of the market. Is that right? The thing that you need to keep in mind is that the house that you would like to buy was worth alot more in 2005. It is a tought spot to be in, but keep in mind that a home is not meant to jump up in price in one year or two. The great deal that you will get,(and you will get a great deal today) in this market over 20-30 will more than make up for the loss that YOU are going to take. I'm sorry to tell you that, but that is the truth. So put the home at a price that will sell right away and get on with your life, money is a small part of life your family is what matters, you will make more and this will be a good learning experience. On a high note rates my never be this low again...and if the mother in law is not the daycare have her kick in a little. Just take the loss sooner rather than later and get on with life...If you want to talk more click on my profile or call 828-989-5938

Kindest regards, Shawn Anderson
0 votes Thank Flag Link Fri Mar 18, 2011
Hi, I recommend renting it, especially if it won't sell close to what you owe. A shortsale isn't recommended because it has a negative impact on your credit and you also have tp prove hardship. The banks will let you know what is acceptable as a hardship and what isn't. The rental income can be considered income and if you have positive cashflow that will help you with your purchase.

Sincerely,

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
914.406.9023
0 votes Thank Flag Link Fri Mar 18, 2011
You can short sale your property and move. We are a professional short sale service and would be happy to explain the process to you. Please call us directly to discuss your specific situation. Our services are FREE to homeowners. We look forward to hearing from you.

Eli Givoni, Director
Short Sale Department, LLC
561-361-1909
info@shortsaledept.com
http://www.shortsaledepartment.com
Serving all 50 states

MARS Disclosure for General Commercial Communications
IMPORTANT NOTICE:
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
0 votes Thank Flag Link Fri Mar 18, 2011
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