Home Selling in Crystal Lake>Question Details

Jessica, Real Estate Pro in 60014

if i sell my current property for less than i owe, will i be able to buy another property and roll the remaining amount into the new mortgage?

Asked by Jessica, 60014 Wed Jan 13, 2010

or will i owe the remaining amount at closing?
And if i do that how much will i need down on the next property? --( my credit score is high and my joint income, makes us not a risk as far as over extending ourselves financially.

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Robin Silverberg’s answer
Well technically not true, because on a short sale the loan balance is not satisfied. However, the lien is released, and that's what needs to be done. If Jessica can tell us why she wants to do a short sale and buy another property, it would be helpful. If she still pays on the balance from the short sale, and takes out a new loan, she may not be any better off unless she downsizes a lot, or has to move to an area far from where she now because of a job transfer.
0 votes Thank Flag Link Wed Jan 13, 2010
Jessica, mortgages are attached to the original property that it was created for. In other words, you cannot roll over to a different property. If you selling for less either you doing a short sale, in that case you won’t be able to get financing for another house until at least 24 months or you are bringing cash to the closing to cover for the gap of value. In that case, the down payment that you will need for the new purchase would be determine by the loan that you qualify for, ( if you qualify for FHA could be 3.5%) or by the amount that you feel you want to invest. Let me know if you have more questions.
Silvia Oliva
Realtor/ Mortgage Consultant
Fax 386-523-0202
0 votes Thank Flag Link Tue Feb 26, 2013
no, its not like the car industry. you must satisify the loan bal. at closing
0 votes Thank Flag Link Wed Jan 13, 2010
Mortgages are liens on title. All liens need to be satisfied when transferring title by sale. So you would have to pay off the current mortgage in full. Depending on the shortage, some and I say some banks have been known to make a new loan for the difference and you can pay that loan. It becomes more of a personal loan rather than a mortgage. You would have to look into it with your current lender.

If you have a good credit score, sufficient funds and are not late on your mortgage, you probably don't qualify for a short sale. You need to be in a hardship position in order to do a short sale.

Trying to get a loan after doing a short sale? Not going to happen. Those with great credit and good jobs are sometimes finding it hard to get a mortgage, I don't know of any bank that would approve a loan right after someone defaulted on the previous loan.

If the deficiency between what you received from the sale and what you owe on the mortgage is a manageable amount, you can bring money to close and pay the difference. This will have no effect on your credit and the loan would be considered paid in full. Then you would be able to get a new loan.

Mortgage guidelines are changing since the 1st of the year. You will need to check with a lender to see what is required for a down payment. Conventional loans will require more than going FHA for the down payments.
0 votes Thank Flag Link Wed Jan 13, 2010
Hello Jessica,
Your best bet is to talk to your bank. Ask them this question and they will be able to tell you what options you may have. Most likely no they will not allow for 100%plus loan. If you can afford to come to closing with cash, maybe they would allow an unsecured loan. Maybe you have a personal line of credit you could use. We could spend all day with the possibilities, so give them a call. I wish you the best of luck and hope it all works out.
Have a wonderful day,

Nancy Doyle
0 votes Thank Flag Link Wed Jan 13, 2010
If you are saying that you are going to Short Sell your home and then try to buy another one you may have some bad news. No bank in their right mind will loan money to someone that just, in essence, defaulted on their previous mortgage. Your credit may be great now, but after the Short Sale, it won't be.

When you say "roll the remaining amount in" you're asking if you can take your negative equity and finance it in with the mortgage on the new house??? This is something commonly done with automobiles but NEVER with houses...

Think a little about the consequences of that course of action. If you start your mortgage off with negative equity you are going to be in the same shape you're in with your current home only worse with the new one.

Your best bet is to stay where you're at, pay it off, or speak to an experienced mortgage broker and Short Sale Attorney to see what your options are.

Best of luck!
Web Reference: http://www.dreamtown.com
0 votes Thank Flag Link Wed Jan 13, 2010
Jessica, you have brought up a very interesting question. I think that what you would like to do is admirable. Have you been current on the mortgage you have now? I would be interested to hear if you can get anywhere with your current lender. When they approve a short sale, they get nothing on the extra money that is owed. Would they consider giving that to you as an unsecured loan, and lending you the money to purchase a new house? The problem might be that the short sale department and the mortgage origination department are 2 separate units, even in the same bank. I think it is worth a shot though trying to get this done if it will benefit you. Is there a reason you need to move right now?
0 votes Thank Flag Link Wed Jan 13, 2010
Jessica you will need to pay off you existing mortgage prior to being able to sell your current home. You can not roll over any shortfalls. Your choices are to ask your lender to complete a short sale, however if you are in a good financial situation you may not quailify., A short sale is where the bank reduces your mortgage amount to allow you to sell you home for less than you owe. I have heard of situations where people who are not in a financial need can sign a note for the difference and the bank will allow the short sale. You would have to show them you have a need to sell your current home and what the value is compare dto how much you owe. .
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Wed Jan 13, 2010
Good Morning Jessica

That is a great thought to roll in the remaining amount you owe into another mortgage. What a way to AVOID damaging your credit. It is best to ask a lender what programs are available for creativity like this.

I can help you with the Short Sale process when you are ready to sell.

Melissa Leetzow E-PRO SFR Realtor
Coldwell Banker Primus
0 votes Thank Flag Link Wed Jan 13, 2010
Hi Jessica,

You will need to pay off your existing mortgage in full at closing. As for your next home purchase, if you were to go with a FHA loan, you would only need to put down 3.5% plus any additional closing costs.

Scott Epstein
(847) 829-0130
0 votes Thank Flag Link Wed Jan 13, 2010
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