laraereynolds, Home Buyer in Fredericksburg, VA

What are my options to get out from under?

Asked by laraereynolds, Fredericksburg, VA Mon Jul 16, 2012

Bought our house in 2006 at peak price. Unfortunatly drank the kool aid and have an arm and currently have an interest only loan. So basically we still owe what we paid for the house 5 years later. In addition because of the market we bought at 270K but our house is worth now about 125K. We have out grown our house and hate our neighboorhood. We want out but can't sell. We need HELP.. how do we get rid of our house, do we rent it, do we rent another house until we can show ours as a rental? Do we refi to get out of the arm and the interest only.. Please help!!

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Your alternatives are listed in this article.

http://moyersteamblog.com/2012/03/19/program-hr-3648-short-s…


Dwayne Moyers, Realtor
Maryanne Moyers, Associate Broker
0 votes Thank Flag Link Mon Jul 16, 2012
I have options for you that typical Real Estate Agents may not have. Contact me directly at 540-379-0345 and we can set up a time to discuss these options. With many years of experience and knowledge working in this industry, I can say with confidence that I will get the job done right. You are also welcome to visit my website: http://www.lancechristmas.com for additional information.
0 votes Thank Flag Link Mon Jul 16, 2012
Unfortunately, loss of market value caused by the bad housing market - or not liking the neighborhood - are not good, valid reasons that your lender will consider to approve a short sale.

The only way your lender will approve a short sale is IF you can prove a genuine hardship documenting that you are NOT able to meet your monthly mortgage payments or must sell for other reasons.

You have to look at it from your lender's perspective: your lender paid $270K to the seller from whom you purchased your home in 2006 hoping that you will repay the loan - they have the loan documents to prove it. Sure, the lender gambled and probably should NOT have approved a loan with no money down for apparently an overpriced property..... but, the fact remains they did finance the purchase by paying out $270K to your seller. Short sale means that you are asking your lender to accept only current market value of the home ($125K) as a REPAYMENT for $270K loan.

This is why unless you can prove a HARDSHIP, your lender might not approve a short sale. Even IF the short sale is approved, you will NOT be able to purchase for 2-3 years due to lower credit score.

You can rent this home out, if the rent will cover your current mortgage payments. If it does cover - unless you can afford to pay the difference - you can purchase another bigger home IF you can qualify for the second mortgage. The lender on the second home, primary residence, will treat the rental home as an investment property, but only 80% of the rental income will be counted as qualifying income.

I suggest that you contact your current lender and discuss your situation with them.

NOTE: For a legal or tax advice always contact experts in those fields.
0 votes Thank Flag Link Mon Jul 16, 2012
As Don Tepper pointed, a short sale is an option, but should not be the one and only part of your discussion.

You have indicated you want to be rid of the home. You do not like the community and you have not attachment to this house. This is an imporant start.

Now, you really need a multi-dimensional real estate professional who knows the multiple ways a home such as your can be sold. Select the agent with a real strategy, not a mere modification of PPP.

It is CRITICALLY important you discuss with your tax adviser and attorney the outcome you need. If you start this process incorrectly,,it will not end well. But YOU MUST ACT NOW!! The potential exists for big changes in 2013 that may nor be favorable to your situation.

Call a VA real estate professional to get the first rundown of what is possible in your situation. This can be a highly complex, trouble prone, high risk operation that will require resources, experience, skill and multiple strategies as the process progresses.

But, you truly must act as soon as possible. Time is not your friend.

Best of success to you.
0 votes Thank Flag Link Mon Jul 16, 2012
Watch out for the sharks who propose a short sale as your first step. Yes, it's an option, but should be far, far down on your list.

You certainly can rent it. Analyze the numbers. Will the rent come close to covering your mortgage costs? If not, can you handle the difference? Then--along the lines of your question--you'd have to figure out whether you could afford to buy another place, or whether renting would make more sense.

You can check with your lender and ask about a loan modification.

Also, check with a good local Realtor. While prices have gone down, I'm not sure that Fredericksburg prices have dropped that much in all cases. I was looking on the MLS and--yes--I did see some selling as short sales today in the range of $125,000-$140,000, but those appeared to be priced closer to $240,000-$250,000 when you bought. And I looked at some that are selling today for $175,000-$185,000, and those, too, were selling around $250,000. Point is: You really need a good local Realtor to determine what your house is worth. It could be as little as $125,000, but it could be substantially more.

So, basically, you need to know what your house is worth now if you were to sell it, and what it would rent for. Those will help guide you in the right direction. That, plus trying to pursue a loan modification.

Hope that helps.
0 votes Thank Flag Link Mon Jul 16, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Hello, Amy Cooper Realtor in Fredericksburg. I can help you! I have the facts and would be glad to discuss your options. You are not alone in this scenario. I have helped many families with their real estate needs that are upside down in equity. I have a financial chart that shows it would take you a minimum of 150 months to break even from the loss. Don't do anything until you review your options. You don't want to make a decision that is going to make your situation worst. Call me directly 540-522-1497!
0 votes Thank Flag Link Mon Jul 16, 2012
You are in a tough situation, but you are not alone. Just about everyone who purchased a home between 2004 and 2009 may be "underwater." You may be able to sell you home at market value through a short sale. Loan modifications through your lender are also sometimes possible if you wanted to stay in the home. However, it sounds like it is no longer suitable for your family.

Short sales impact families in different ways and require some careful consideration. For example, there are possible tax and credit implications that you might want to discuss with a CPA or attorney. It is likely that you won't be able to purchase another home for two to three years after the short sale. You also need to make sure that your lender will give you a waiver of deficiency so that your obligation to your mortgage ends with the sale. You'll need to talk to HR at your place of employment if you have a government security clearance.

It is a complex process, but short sales close every day relieving homeowners from financial hardship. My wife and I have completed many successful short sales for our clients. Please give me a call at 540-847-8140 if you want to discuss your options.
0 votes Thank Flag Link Mon Jul 16, 2012
Dear laraeeynolds,

In addition, here are some websites to help you understand more of your options:

http://www.makinghomeaffordable.gov/programs/exit-gracefully…

http://www.makinghomeaffordable.gov/programs/fallen-value-he…

This wesbite and articles will help you in the HARP and HAFA programs you sound like you would be eligible for at the current time.

Kristy Satterfield - Realtor®
Century 21 Battlefield
15521 Real Estate Avenue
King George, VA 22485
Top Producing Agent 2011 - Ruby Award
Accredited Buyer Representative, Short Sale Foreclosure Representative
Quality Service Award 2010 and 2011
Rookie of the Year 2010
(540) 273-0152- Direct
(540) 663-0385 - Fax
"Just THINK Satterfield at Battlefield"
Licensed in the Commonwealth of Virginia
0 votes Thank Flag Link Mon Jul 16, 2012
Have you asked your lender for advice?
0 votes Thank Flag Link Mon Jul 16, 2012
Dear laraereynolds,

I feel your pain and I want to tell you that YOU DO have options available to you at this current time.

Has anyone talked to you about selling your home as a short sale and buying a home at the same time. I recently helped similiar clients sell their underwater house that they had outgrown as it was their starter home. I sold their home as a short sale for $158,900 which they owed $238,000 and at the same time they bought a bigger new home for $309,000.

I would like to better understand how I can help you with my years of selling and real estate experience. I have sold over 60 homes in the last 3 years and I would love to help you decide which options are best for you and your family.

Please call me at 540-273-0152 to personally discuss. Not all realtors are the same and I want you to know you have a choice!

Thank you for time and consideration in calling me to discuss your home selling or refinance options.

Kristy Satterfield - Realtor®
Century 21 Battlefield
15521 Real Estate Avenue
King George, VA 22485
Top Producing Agent 2011 - Ruby Award
Accredited Buyer Representative, Short Sale Foreclosure Representative
Quality Service Award 2010 and 2011
Rookie of the Year 2010
(540) 273-0152- Direct
(540) 663-0385 - Fax
"Just THINK Satterfield at Battlefield"
Licensed in the Commonwealth of Virginia
0 votes Thank Flag Link Mon Jul 16, 2012
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