I can't figure out what to do with my house. Should I do a short sale or foreclose?

Question

I've been doing alot of thinking and I came to the notion that I do not want to pay $2800.00 on my house for the next 5 to 6 years that's to say if the interest rate doesn't go up. if it does than I'll be paying even more. Even though I can afford the payment, I don't want to spend the next 5 to 6 years doing so. I rather do something else with that money simply because my house is not new and it's not my dream house. I initially bought it as an first time buyer. what do you think. Short sale can take forever. please be helpful thank you.

Answer 1

Do neither, Janice. You have to have a place to live. You said that you can afford the payment. So what if it's not your dream house. Hold on to it and ride through the storm. The market will turn eventually and then you could put it up for sale and then try to get your dream home. It sounds like to me that you have an Adjustable Rate Mortgage and that possibly the intro fixed period is over or just about over? Consider doing a refinance to a 30 or 40 year fixed. I even heard that some lenders are offering 50 year fixed loans. Absolutely do not do anything that can adversely harm your credit. It's just not worth the time and the aggravation of trying to turn it back around. If you do that, your dream home has just took a hike further back into the future.

Answer 2

I've read your question multiple times, and it sounds like you are giving up. Is that really the case or is there more...

"Should I do a short sale or foreclose?"

You are asking that, like those are your only 2 options.
Are you heading into foreclosure with the bank now???
I am terribly confused because you had stated that you have the $ to pay your mortgage, but didn't like the idea of making the payments for another 5-6 years. After all it is not your dream home, and that you will simply find something else to do with your $ instead.

Let me ask you a couple of questions.

Where is your house located?

What are the terms of your current mortgage?

How long have you owned the home?

Do you have any equity in your home? If you do are you willing to just throw it all away.

Have you thought about your future credit at all? You said that you want to someday get your dreamhouse, right? (In fact, we all do) Plus you still need a place to live, in the meantime.

Have you openly discussed this with anyone else that you know?

To answer your question: If you have to do one or the other... You would be better off doing a short sale and living in your home untill it sells.

I am sure that there has got to be more to this story than just what you are stating. I honestly don't mean to be a real hard nose about this. I know the market is tough in most places. But that doesn't nessisarily mean that it will be like that forever.



Good luck with it!

Answer 3

You cannot short sell the house.
A short sell is when the bank agrees to take less money than the loan balance. The bank has no reason to do that if you are current with your loan. The bank will not consider this until you are in default--and some other things happen. And they will not consider short selling to you.
And in all of the above your credit will get hurt.
If you can, indeed, afford the payments you could just sell the house. If you are over-obligated on the house, that might be difficult
And probably the smartest thing to do is to refinance the house. If you are worried about the interest rate going up, get a loan with the interest at a fixed rate, (which probably everyone should be doing. This is not the time to have a variable rate.)

Answer 4

Here may be another option for you. You have to live somewhere, what about renting out extra rooms if you family situation will make that practical. I knew a barber in Sana Ana, California who earned a very modest living, and lived in an awsome home because he rented out 4 of the 5 bedrooms. Cost him the same to live in a nice home as renting a cheap apt. Now with the internet you can do criminal background checks, etc to get good renters.
Forclosure would be an awful mistake. Trashes your credit, you may want to buy a home in the future and a forclosure on your credit report will make that very difficult.
Refinance now to fixed rate mtge if you can and keep your home. Short sale is only good if you can pay the differance between what is owed and what you sell for. But then you are losing money, essentially paying someone to buy your home.

Answer 5

there's a brilliant distinction. procuring a foreclosures (AKA an REO components) is risk-free as long as you comprise a house inspection contingency on your furnish. The financial employer that owns the abode has to grant a sparkling identify to you with a view to close the sale. attempting to purchase a short sale house is a difficulty - anticipate delays at superb and don't be shocked if the deal falls by. a short sale demands the supplier's lender to approve. additionally be incredibly careful approximately different liens that could be on the valuables (2d mortgages, lower back taxes, etc.).

Answer 6

Unless you have a really bad loan (interest only, for instance), hold onto the house for another year or two. Short sales can take a long time and (someone correct me if I'm wrong) go against your credit.

Good luck.

Answer 7

there is a National Foreclosure Hotline that has been set up by the government to council homebuyers on just this type of thing.
It was announced on the CBS Nightly News a few days ago.
1-888-995-4673
give it a try....

good luck ☺

Answer 8

i think you should go talk with a realestate agent and maybe they could talk with you and maybe you would want to bring your friend or a husband or someone close to you, so you can give and get a second opinion on what you think is the best decision for you. now about the note and what you are thinking about doing, you should have thought about all that in the beginning so you wouldnt have to worry about this now. why dont you rent it out to someone else so they can pay for it for the nest 5to6 years then you can own it and fix it up and sale it for more then you bought it for? i heard that is a good thing to do. maybe you should get into that? like i said figure out what you think is best for you we can only give you our advice and what we think but that doesnt mean that is whats best for what you need to do. good luck!

Answer 9

if you bought the home the last two years, probably would need a short sale..

A short sale won't affect your credit as much as a foreclosure..
something to think about, plus having your home as short sale, it's like free rent until home sold or bank buys it and kicks you out

Answer 10

Do not consider foreclosure an option.

Talk to a Realtor and ask how you can get out of the house without taking the sweeping negative actions that foreclosure would cause. If you price the house well, it will sell.