Our home, short re-fi, loan mod - Posted by Diane

Posted by davidroybal on March 24, 2010 at 20:16:48:


Our home, short re-fi, loan mod - Posted by Diane

Posted by Diane on March 24, 2010 at 17:39:11:

Hello, I am not a real estate investor (though it’s an idea I’m attracted to - just not sure I’m cut out for the reality of it). I’m looking for some input on the situation with our own home.

We are in process (through a negotiator we’ve hired) to hopefully get either a loan modification reducing our monthly housing costs to about what we could rent for in this area (a temporary fix), or better yet - a “short re-fi” if we can get enough financing and our current lender will agree to it, which would reduce the principal to what the house is worth now, and we’d be the buyers of our own short sale. We paid 197,500 for the house back in 2004, we figure it’s worth 80-100K now, probably closer to 100K, but haven’t had the appraisal yet. We still owe about 155,000 on the house, and our income can’t support our current payments much longer if we want to be able to save anything, which obviously we need to do. If we can’t get either deal, which is unlikely, we would try to short sell.

What I’m trying to determine is what’s the smartest financial decision for the long haul as it relates to our housing - given the fact that we’re in the less desirable area of our funky little community and the home values are not likely to come back as quickly, here, as they might a bit north of us. Should we “get out now” and try to start over? I think in that case we’d be renting, because our credit would take a hit from a short sale, and we probably couldn’t get financing to get into a home in a better area, regardless. Even if we did, we’d be shelling out more than we’re comfortable with on a monthly basis - meaning very little wiggle room for one of us losing a job, etc., which is where we are at now with our current mtg.

My less than educated logic about this is to stay put if we can get our payment down to what we’d pay to rent (and frankly I’m emotionally attached to the house, my garden, etc. and we don’t feel “ready” to uproot our life here), but I’m worried at the same time we may never be able to make anything other than a lateral move if the areas around us (where we’d like to be, ultimately) increase in value, but we’re stuck in a house that hasn’t kept up because of the location. I should mention we are 43 and 51, stupid about money all our lives until recently, so we have very little savings, including retirement, so - more pressure to really make the right decision, here.

Also wondering if there’s a creative solution that I’m just not seeing. I heard about a seminar this weekend about short-selling and (I think) timing it so that you can get financing for another home before your credit takes a hit, something like that - the company has agents looking for business, of course, but I know there are legal issues with those kinds of tactics, as well, and don’t know if that can backfire.

Not sure if this was the right place to ask, but if anyone has any thoughts on it and can take time to write, I’m all ears. Thanks!

Re: Our home, short re-fi, loan mod - Posted by Bill P. Jacobsen

Posted by Bill P. Jacobsen on March 25, 2010 at 22:01:31:

You can negotiate with your lender yourself. You do not have to pay a negotiator. You may be able to get your payments lowered temporary or permantly but will not get the the principal lowered.

You can negotiate a short or hire a realtor to do it. Remember you must have a buyer. The only way you could keep the house is if you had a friend or family member who would buy your house in a short sell and rent or lease back to you. You could buy it back later if you wished.

If you do a short sell you may successfully obtain another loan before the short sell hits your credit. If I were you I would probably not try to buy another house until I was back on my feet. Start saving money for a down payment later.

Just my Opinion,


Re: Our home, short re-fi, loan mod - Posted by Lubasha

Posted by Lubasha on March 25, 2010 at 21:30:29:

You can short sale your own house, but there is no way for you to buy it back from bank for reduced price. Make up your mind what is more important for you: to stay in the house and pay mrg that is no longer affordable, or give house back to bank and look up for another place to live in.

Read about short sales through archives on this site or google it if you decide to help out yourself.