What happens to our mortgage if we sell our home for less then we bought it?

Question

My fiance and I bought a house for 429500 in November, he is thinking about taking a job in another state. We put no money down on the house and the house has gone down in value. Because we could barely afford the payments we have NO savings. What would happen to our mortgage if we had to sell at a lower price. Niether of us has good credit, and we realize that buying the house to begin with was bad, our realtor insisted we would be fine... stupid us listened to her... What can we do? Are we stuck?

Answer 1

Welcome to the world of renting.

You have no choice, you must continue making payments until you have equity. Find a renter for the house. Continue making payments as you do now

Take the rental money you receive and rent a home at the new job. It could work out good. Rent a cheep apartment for a while to get ahead and let the renter in your house pay down the mortgage.


Once you have a tenant renting your house you will not be in stress financially and can take your time to work things out.


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The value of the house did not go down, you payed too much for it.
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You can not sell the house. The mortgage company will not release the lien on the house for closing if it is not payed off on full. There can be no sale unless you can raise the difference and bring it to the closing as cash. You can not do that so you options are loose the house to foreclosure or keep paying. If you must more, you will need to find a renter.

There is no solution that involves selling the house no one can get a loan on your house while you have a loan on it.

No closing could ever go through. All the people here talking about you selling the house are talking out their Arrases this can not be done sorry.


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Lawyers can not make a criminal act legal. You can not sell someone a home if the bank can not release it.

You are broke already bringing an experienced broaker into the deal will cost another 6 pecent and yu are already in the whole on this deal. A lawyer will want $5,000 up front and more later. Just rent the house and move into an apartment for a while.
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Answer 2

Well, you are responsible for the mortgage and payment. The bank had you sign a note promising to pay the note back.. If you sell at a loss to an individual, then you will have to come to closing with the difference in the money. If you can get the bank to let you "short sell" the property and show you are a hardship, find a buyer who has the cash and get bank approval, it can save your credit and let you walk away from this. It is an intricate process and one that requires knowledge. Look at your area and see if you have a real estate investors association. They have investors who do these "short sales" and may have an investor who would want your property. I am sorry that your realtor made you feel things were ok. They probably were when he/she said that, but ultimately, it is totally YOUR responsiblity, not the realtor, the bank, anyone but you to make sure you were aware of the process and what you were doing. I am sorry that this has happened! I hope you can find an investor to help you.

Answer 3

You will owe the difference between what you sell it for and the balance on the mortgage . ( & it sounds like you do NOT have that extra $$$$ )

If you take the job in another state , and let this one go into foreclosure , you will probably Not be able to buy a house again for years .

If this new job is a guaranteed good thing with promotions and all , it may be worth the sacrifice
( You'll be living in rentals ) .

But , if this is not the most excellent job ever , you maybe should stick it out where you are at .

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Answer 4

if you don't need to relocate, what is the point of buying another house now? your current hosue is probably worth 20-30% less than it was 4 yrs ago? Does that fact even leave you with any equity? - plus the 6% real estate commission you will need to pay on the sale. even if you have equity left after all that, you will still need extra cash for closing costs on slae and purchase and probably some down payment money if you have negative equity - you will have to come up with cash to pay off the shortfall if you want to be able to buy another house, so you would need cash for that, cash for the real estate commission on the sale, cash for closing costs on the sale and the new home and down payment cash on the new house, since you have no equity on the old house - either way that's a LOT of cash if you do a short sale, no way will you be able to get another mortgage anytime soon - your credit will be ruined and if you just stiffed the bank, why would any other bank lend you money?

Answer 5

My husband and I were in this mess ouselves just 4 short months ago. It will be hard and VERY stressfull but you need to get an experienced broker/realtor and a good lawyer if needed to negotiate something called a short sale. We saved over $40k on our deal and walked away without our credit being totally ruined. It's still not great but we don't have a forelcosure on our hands. Your mortgage company is going to pull every trick in the book on you and will stonewall you and try everything they can to scare you but you must not forget that they really do not want your property they want money and if they know what's good for them they will take whatever deal they can get. We owed our lawyer almost $3k form previously trying to sue them for breach of FDCPA laws and trying to negotiate a deed in lieu of foreclosure and we were able to ge those fees negotiated and paid as part of the short sale. Also Lawyers if you owe them will sometimes setlle your bill for less than is owed as long as it's reasonable. Please feel free to contact me if you have further questions or just need someone to talk to. I wish you luck it was the hardest position I have ever been in in my life and I know what you are going through all too well.

Answer 6

First, advertise it yourself. No room for a realtor fee here.. Spruce it, hold open house. If you get an offer, go with it to your mortgage company. Take comparison info you have found on www.zillow.com
Do the best you can to sell it, and let the mortgage company know what you are doing. Try to work with them.
The best you can do is ALL YOU CAN DO. All this would be taken into consideration at the time you apply for another mortgage. Keep every effort documented. Good luck to you.

Answer 7

If you don't have the difference to bring to the closing table to close the loan, then you can't sell the house.

Your only other option is a Deed in Lieu, but that could render you unable to rent and it will destroy your credit history for a minimum of four years.

Answer 8

The new buyers would want to have a clear title, that is one of the reasons you use a lawyer for closing. Don`t try to keep any info from potential buyers, it can come back and bite you later. Discuss this with your mortgage lender and see what your options are. Unless they settle for a less payoff on your original mortgage, your probably stuck with the payments.

Answer 9

If you don't have the funds to cover the difference between the payoff and the sales price, you will need to contact your lender's "Loss Mitigation" or "Home Owner Retention" department, explain your situation and ask them to consider either a Deed-In-Lieu (you deed the home back to them) or ask them if they'll accept less than the payoff balance.

Since few lenders want more foreclosures in their portfolio (this hurts there ability to borrow more funds), they'll likely work something out with you.

Good luck.

Answer 10

You'll have to pay the bank the difference between the sales prices (minus commission) and the balance. Next time don't take advice from a salesperson, they will screw you everytime.