Is it best to sell or refinance my house? - Posted by Thurman

Posted by Thurman on September 07, 2004 at 09:42:04:

Dave,

Thank you for your response!

So you are saying that I should create a note backed by a first position mortgage and sell the note to a real estate notebuyer, is that right?

Would you explain your suggestion using an example?

Thanks!

Thurman

Is it best to sell or refinance my house? - Posted by Thurman

Posted by Thurman on September 04, 2004 at 16:17:18:

Hello!

My present situation:

  1. Debt expenses exceeds my income
  2. Am up to 3 months in arrears on over half of my debt payments.
  3. Real estate taxes due Tuesday and have no money to pay for it.

People are telling me to take bankruptcy, however, I got myself in this mess and I want to repay all of my creditors and be debt free.

The only asset I have is the equity in my house. The house has a Fair Market Value of about $75,000; I owed about $33,000 leaving me an equity of about $42,000. My plan is to bring all bills current and with the balance of money to pay off some of the high interest credit cards.

Presently, I don’t know whether it is best to sell or refinance my house.

I’m aware that after I sell my house that I will have pay income tax on any profit over the $33,000. Also, there is closing cost to consider. On the other hand, if I refinance my house there will be expenses of getting a new loan on my house plus the loan amount would be a percentage of the appraised value.

Its seem that the best thing for me to do is sell the house, however, I would like to receive your ideas as to what I should do.

Thank you for your time and consideration.

Thurman

Have decided to sell house; need help with plan - Posted by Thurman

Posted by Thurman on September 06, 2004 at 23:38:13:

Thank you to the three responses that I received to my post above.

Well, I have decided to sell my house and use the cash proceeds to pay to pay off the mortgages, some of the credit card bills and to give me time to find sources of income to live.

I’m considering offering a second montgage as collateral for a $15,000, 18 month loan. Part of the loan proceeds will be bring my past due bills current and the rest to update the house in order to get the best price for the house ($85,000-$90,000).

I will be seeking a private lender in order to keep the expense of obtaining the loan cost to a minimum. With a loan-to-present market value of about 65% ($33,000 + $15,000 divided by $75,000), I shouldn’t have to much trouble finding a private lender.

Presently, this is my plan of action to begin getting myself out of debt. However, I’m opened to any other ideas that anybody would have that would be better than the one I considering doing.

Again, any ideas would be appreciated.

Thurman

Re: Is it best to sell or refinance my house? - Posted by CAguy

Posted by CAguy on September 04, 2004 at 20:15:46:

How about apply for HELOC to relief some of your debt now since we have good equity in your home?

Your interest will be tax deductible in most cases.

Refinance and take some money out will be the next option. Shop around for 0% or zero closing cost so no money out of your pocket.

Re: selling house; need help with plan - Posted by Dave Hayes

Posted by Dave Hayes on September 07, 2004 at 08:38:10:

Thurman,

With that kind of equity, and with the need to sell your house QUICKLY, why not use temporary owner financing to accomplish two events at closing: 1. carry back a first lien note, and 2. sell that very note at closing to a note buyer, resulting in CASH proceeds plus the down payment in your pocket to pay your bills!

Let me know if you have any questions. Thanks, Dave