Were trying to sell the house right now...but, the market isnt looking to good...I just want to prepare myself for the worst!
2006-09-15 10:56:09 · 8 answers · asked by D W 1 in Business & Finance ➔ Renting & Real Estate
A foreclosure will have a devastating effect on your credit! It could be years before you could get a mortgage again, and, you would have to put down a large amount of money. What I would suggest is if you are having problems, call the bank and tell them. Ask them to give you interest only payments for a while. This should lower your payment a bit. Let them know you are trying to sell the house to avoid foreclosure. Banks do not want to be in the real estate business and are generally fairly cooperative. Is there a possibility of renting the house? What about taking in one or two boarders for a while?
2006-09-15 11:01:27 · answer #1 · answered by brucenjacobs 4 · 0⤊ 0⤋
Foreclosure will ruin your credit, for at least 4 years (bankruptcy lasts 7) and make you a very high risk credit liability. that means you have to put down much more towards a new home, and your loan will be classified as "subprime", meaning that it's high risk. That also means that the interest rate and payments will be VERY high.
If your employer checks your credit, your job may also be at risk. You can actually be fired for having a forelcosure on your credit, and we have seen this happen.
A quick note:
Contrary to "Rich Z", investors (99.9% of them) are not vultures. While the news does focus on one or two bad seeds, the rest of us take our business seriously. We do help people in a foreclosure situation, and while we do make money off the deal, the homeowner is able to save their credit and get out of a bad situation at the same time - so it's a win-win situation.
The majority of the time a home in default has very little, if any, equity available. While your mortgage balances may total up to say, 90% of the home's current value, late fees, arrearages, attorney fees, etc quickly swallow any equity and can actually result in you being over 100% financed.
I would be able to work with a property like that and frequently have. However, a realtor that takes 6-7% commissions (wanna talk about vultures?) would never list the property because there's no money in it.
Also consider that as investors, we don't charge commissions or fees. When selling conventionally, you can spend up to 14% of your asking price in holding costs, commissions, upkeep, closing fees, etc.
Vultures? I think not.
2006-09-18 03:35:48 · answer #2 · answered by Pat F 3 · 0⤊ 0⤋
It destroys it. You have to wait 7 years till your old record is clean and then you need to start building a new acceptable credit rating that a lender would like for a loan.
If it really gets bad in the market you could try raising money by getting a tenant.
If it is still hanging around your neck like an albatross you could always call up one of those vulture investors who will give you bare minimum but at least he will do enough with the house that he can resell it and you pay your bank. If you do go the vulture route make sure that he gives you at least what your existing equity in the house is worth and if he says how much are you asking for it don't fall for the trick of lowering your asking price if he says "Is that the best you can do?"
2006-09-15 11:03:53 · answer #3 · answered by Rich Z 7 · 0⤊ 0⤋
yep 7 years is correct...and a forclosure will devastate your credit
here is a suggestion...speak to a mortgage pro about a different mortgage....I have one where each month i decide wether to make an intrest only payment, a principal only payment or the normal principal and intrest payment...its a real help as i run my own business and if i have a slow month i can make the lesser of the payment options.
2006-09-15 11:08:01 · answer #4 · answered by Anonymous · 0⤊ 0⤋
7 or 10 years,, I think it is 10,, that is the maximum allow by law
But you may still be able to buy a house,, they will require a much higher down payment then they would normally do,, plus the interest rate would suck!!
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2006-09-17 13:09:54 · answer #6 · answered by Anonymous · 0⤊ 1⤋
If you're in Southern California, let me know and I can help you. If I don't sell your home, I'll buy it myself and prevent a foreclosure.
Regards
2006-09-15 15:52:00 · answer #7 · answered by Anonymous · 0⤊ 0⤋
its not good. put it up in eveyr local paper.
2006-09-16 13:29:29 · answer #8 · answered by Piffle 4 · 0⤊ 0⤋