If you do a short sale on the sale of your existing home, it is unlikely
Your present lender or any will lend to you for the next three to five
Years. To start with you and your wives credit will be hit by 150-250
Points and basically after the short sale your best bet will be a private money
Or hard money lender at 3-4% above current market rates.
It is un heard of what you are attempting Prudent to find a new place after you have talked to your present lenderAnd then decide what options you have
Get in touch with a Realtor who is experience and does short sales, after that
Decide what you are going to do.
You are asking your current lender to not only agree to a short-sale wherein they might have to forego a part of their revenue stream.. but at the same time asking them to lend you a similar amount to get you into another, albeit smaller, home..
Keep in mind Banks are in the money-lending and profit-making business - so what is in it for the bank here?
This is an old question, but I post this answer for others to see, because many at the moment are in your situation.
I have two options for you. You may contact me, if you wish.
Ramona, Broker Associate, ReMax Results, MN Broker, email@example.com, 952-239-1697
Feel free to contact me for several references.
You need someone to provide you with some professional estimates of value.
There are three pieces to this puzzle.
One, if you did sell, how short would you be?
Two, normally if you short sale your credit is dinged to the point where you cannot buy. The lender wants YOU to help in the short sale if you have assets...meaning that you'd have no money for a down paynent IF your credit would let you obtain a loan.
Three, is your situation is so bleak that the lender will let you have a short sale, then you shouldn't be able to qualify for one.
Now, it is possible that the lender might issue a promissory note for the difference. However, your question really requires some in depth analysis by a local market expert, and then I would contact the lender as to your options.
I would give it a shot, you really have nothing to lose with asking the question. I would think that a reasonable person might be able to convince the bank to do something like that. The only complication is that they probably wouldn't be able to sell the over colaterized loan back into the secondary market. Another option my have is to have the bank give you an unsecured loan for the amount owed. Banks do this all the time and if you think about it, they really have an unsecured loan for the difference right now since they wouldn't be able to sell the house for more than it is worth.
Selling the house short will require an agent with some experience in how to negotiate with the bank. There are some very specific considerations on a short sale that are beyond the scope of this message board. Give me a call if you would like to talk in some more detail about how to accomplish this. I hope that helps.
You didn't ask, but you might want to seek some advice from a fnancial advisor or really good mortgage professional on how easy or hard it is to get a loan after going upside down. You didn't say what your circumstances are, but your chances of getting another loan down the road can be greatly improved if someone advises you of your options right now.