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Lynne, Home Buyer in Lahaina, HI

I am upside down in a loan on a rental property. Should I try to pay the mortgage down or not? It's been rented the whole time I've owned

Asked by Lynne, Lahaina, HI Sat May 21, 2011

it. I bought in 2008 in Cocoa, FL at $160,000. It's now worth about $90,000. I owe $119,000. It's not quite paying for itself and I just had to put in about $1300 in repairs/fix-ups when a tenant moved out. Thanks!

Help the community by answering this question:


I, too, have a rental property and am in a similar situation. This type of problem even happens to real estate professionals. I have found that my lender is willing to refinance my property loan even though it is not a primary residence. This was not the case even several months ago. If you have been making your payments and have good credit you should approach your lender and request a refinance. Mine did not require an appraisal, and they are not charging closing costs. This is one of the major lending players. I would not be surprised if somewhere along the line there is some incentive for these lenders to offer this type of program. Give it a try. You have nothing to loose. My interst rate dropped over 2 points bringing down my payment by $250 a month. Now if I make the same payment that I was making I can pay this down much more quickly.

Amy Seidita
Coldwell Banker Cocoa Beach Realty
321-223-7055 cell/text
0 votes Thank Flag Link Fri Jun 15, 2012
Hello Lynne. As I read your situation description the first thing I thought was a 2008 purchase should not be down 43%. I would be willing to do a market analysis for you if you are interested in marketing your property. If you are comfortable with your on-going rental income I would recommend you continue ownership and in a few years you should experience property value increases of 2-4% annually as we have historically in the past. This should allow you tax benefits during that time and the possibility of market value gains.
Tom Eason, Pruitt Real Estate, Inc.
0 votes Thank Flag Link Sun May 22, 2011
Since I don't know your tax issues I would ask a tax person first. If you need a tax write off and want to come to Fl every year to (check) on your property you might want to keep it. The bank will not do anything because it is investment property. If you are done with the property short sale it and go on with your life.
I have 35 years of local experience. Call me.

Leon McDaniel
Daignault Realty, Inc.
0 votes Thank Flag Link Sun May 22, 2011

Are you taking advantage of all the tax benefits the propety may provide to you?

Also, have you spoken to your lender to see if they can modify the terms of the loan to lower the payments?

Think about it before you defualt...
0 votes Thank Flag Link Sun May 22, 2011

If you walk, that is, stop paying everything, you stop the bleeding financially.

You could try to short sale, do a deed in lieu if foreclosure or just let the bank take it back and end the nightmare for yourself. There is no incentive for your bank to assist you and it may take literally ten or more years of paying to maybe get to zero.

I find people that are creative and go through a short sale or foreclosure to get their life back do just fine.

Good Luck
0 votes Thank Flag Link Sun May 22, 2011
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