I recently was accepted as an employee with an agency. This job requires me to move out of state. Some of the current terms of my mortgage contract are 1. I cannot lease the property or have it as a source of income and 2. I must make the property my primary residence. These two things would obviously conflict with my transition to another state.
2007-11-24 04:58:43 · 8 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
There should be something on there about prepayment and what the penalty will be. You have to either refinance to an income property loan if you want to rent it out or you can sell it. Either way you have to pay the penalty, that is the only way to break the contract.
2007-11-24 05:03:05 · answer #1 · answered by Anonymous · 2⤊ 0⤋
Those clauses apply at the beginning of the mortgage. If your intent when you bought the home was to live in it, you have fulfilled your obligation there.
The courts recognize that people's situations and goals will change over time and will not enforce an action against you should you now decide to rent the property out. And frankly the lender's primary concern are that the payments are made on time. As long as that is happening, they'll not raise any issues about what you are now doing with the property.
During a 21+ year military career I amassed a significant portfolio of rental properties. When I got a new assignement I turned my home over to a local property manager and let my tenants pay the mortgage for me. I'd then buy a new home at my next duty station and repeat the process when I moved on again. These loans included a VA loan and several FHA loans as well as a couple of conventional loans. Each one had a similar clause but I never had a problem with any of them since the payments were always on time. The VA did question me on that loan as I had a short-notice move just a few weeks after closing but a copy of my military orders put that to rest quickly. It's your intent to occupy the residence as your principal residence at the time of closing that matters, NOT what happens unpredictably at some point in the future.
I've divested my holdings now and moved on to other investment opportunities, being a landlord can be a hassle, but there's no reason that you can't do the same. In many areas rents are higher than mortgage payments so this can be a nice little earner for you. Someone else pays the mortgage for you, you may even get a small tax writeoff due to the deductibility of depreciation, and a handsome profit taxed at favorable rates (usually 15%) once you do sell.
Contact a local professional property manager and see where you sit in the rental market. Their services will typically cost you 10% of the gross rents received (deductible, by the way) and are well worth the expense since you don't have to worry about a water heater that takes a dirt-nap on Christmas Eve or other hassles of being a landlord.
2007-11-24 13:17:26 · answer #2 · answered by Bostonian In MO 7 · 2⤊ 0⤋
Of course you should contact the mortgage company and see if they will renegotiate for you. But they are not obligated and they are certainly backed up with serious problems like foreclosures.
If you can make a case that serves the interest of the lender you might stand a chance in getting there attention. They are interested in cash flow and not more late pays or foreclosures, and they certainly dont want to take back the property and manage it themselves.
The other option is to sell
2007-11-24 13:38:41 · answer #3 · answered by Anonymous · 1⤊ 0⤋
The loan you have is a primary residence loan vs an investment loan. ALL LOANS have these clauses. Because of this, there are requirements that you stated.
However, if you have moved into the home and have lived in it, you should be able to rent it out.
Millions of people rent out what was their premary residence.
2007-11-24 13:16:20 · answer #4 · answered by Anonymous · 2⤊ 0⤋
Sell the mortgage back to the company? No. You are still liable for it - moving to another state doesn't change that. You need to try to sell the house.
2007-11-24 13:02:53 · answer #5 · answered by Judy 7 · 0⤊ 0⤋
Contact the mortgage company and see what options they offer. They probably will not give you the best offer. You might be better served to sell the place.
2007-11-24 13:03:30 · answer #6 · answered by caffine jag 4 · 0⤊ 0⤋
Definitely contact your lender and see what they can do for you. I think the only reason they would try to help you is if you cannot afford your mortgage payments, otherwise i doubt they'll even make an attempt. Your best bet is to try to sell it....Best of Luck!
2007-11-24 13:10:51 · answer #7 · answered by Anonymous · 0⤊ 0⤋
can't sell it back. sounds like you will have to sell. and who lent you the money with those kind of restrictions?
2007-11-24 13:16:08 · answer #8 · answered by Anonymous · 0⤊ 0⤋