| 2 houses, trouble keeping up with payments |
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dcl2049
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| 2 houses, trouble keeping up with payments |
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Hi everyone, just signed up here and I'm posting this to help a friend who doesn't really know where to look for advice, so I'm going to do the best I can to try and paint a picture of the situation here.
Basically right now she has 2 mortgages to pay and can't keep up with payments at all. And yes she is on her own with this. She's starting a new job soon but can't afford these in the long run even after selling a bunch of her stuff and needs to get rid of one.
The story is basically, she had bought a new place in the interest of downsizing and cutting utility bills, etc. because it was difficult to afford the first place. She then let her grandfather move in to the bigger house and take over payments on that. The problem is, due to unforeseen circumstances he was removed from that property and can't go back, and she hadn't yet transferred her name from the mortgage. So now she's paying for two and needs to lose the bigger house without it dragging her down with it.
I know it's a little vague but what kind of options are there for a situation like this? She needs to get rid of it soon but it isn't a long term plan to keep it, just can't keep up payments to sell it, and she doesn't really have the funds to get it appraised or anything like that right now.
I didn't have any idea what to do so I just recommended her to talk to a credit counselor of some sort, does anyone have any opinions or input on that as well? Thank you.
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Sun Dec 27, 2009 5:39 pm |
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oldguy
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quote:
and she hadn't yet transferred her name from the mortgage.
Well, a lender won't allow that - she can't just 'transfer her name", she is the one who is responsible to repay the loan.
She doesn't need to pay to get it appraised at this point, she can list it with a realtor who will search for a buyer. Then, after the deal is made, the appraisal will be required to provide proof of value to the buyer's lender. An appraisal will cost about $300 to $350.
Her options are -
1. Price it to sell and get it sold. (It makes no sense to put the 2006 asking price on it and hope for a miracle, she needs to put the 2009 asking price on it to sell it).
2. Find a renter and become a landlord. Ideally she wants enough rent to cover her monthly payment - but that is determined by the supply/demand in her area.
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Sun Dec 27, 2009 6:10 pm |
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dcl2049
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Thanks for a quick reply.
She had thought about renting but was concerned about everything being up to code, making sure everything is legal, all that good stuff that she or I have no idea about. This will be the second month of this and she's really struggling as you can imagine. Is there not anything else she may be able to do to lessen the impact of having the house in the meantime with intent to get rid of it asap?
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Sun Dec 27, 2009 6:22 pm |
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coaster
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quote:
Originally posted by dcl2049
.... concerned about everything being up to code, making sure everything is legal, all that good stuff....
But that would apply if selling as well.
She might look into the MHA program; part of Pres Obama's recovery plan. It doesn't cover two mortgages on two properties but perhaps getting one refinanced at a lower rate will improve the situation.
I have the feeling that there's some information withheld that's material to giving advice about the situation. That's up you whether you want it divulged or not. But without all the relevant facts, any advice given may be relevant or it may not.
~Tim~
Eye Candy : Why Whimsy
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Sun Dec 27, 2009 6:29 pm |
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dcl2049
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I did look around the forums and saw the MHA plan mentioned and next time I talk to her I'm going to see if she could perhaps qualify for that.
I know I'm being a little vague because I don't know everything she knows of course, I'm just trying to get across everything relevant I know. If there is anything in particular that would help clear things up I'll tell you if I know it.
As far as refinancing on its own I can't remember exactly what she said about that possibility, but told me something to the effect of it was probably out of the question. I believe with this brand new mortgage she got and having already refinanced the old house it might make things difficult.
But really she's still in panic mode and doesn't know where to ask for advice so I figured this would be a start. As far as myself I'm young and have managed to avoid debt thus far so I have no idea about anything to help either.
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Sun Dec 27, 2009 6:41 pm |
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littleroc02us
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She needs to get this house sold asap and to not expect 2006 prices. She may need to come up with a smaller loan to make up the difference she owes on the the remaining amount. Sometimes it's a good lesson to learn by facing the facts sooner than later.
“If you want to stay in debt forever, keep borrowing money.”
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Mon Dec 28, 2009 2:23 pm |
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coaster
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Agreed with the above. When you're in a spot with limited options you have to do what you have to do to minimize the damage, and you have to do it now if waiting increases the damage.
~Tim~
Eye Candy : Why Whimsy
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Mon Dec 28, 2009 4:16 pm |
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Cherryl Hanson-Simpson
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quote:
Originally posted by oldguy
quote:
and she hadn't yet transferred her name from the mortgage.
Well, a lender won't allow that - she can't just 'transfer her name", she is the one who is responsible to repay the loan.
She doesn't need to pay to get it appraised at this point, she can list it with a realtor who will search for a buyer. Then, after the deal is made, the appraisal will be required to provide proof of value to the buyer's lender. An appraisal will cost about $300 to $350.
Her options are -
1. Price it to sell and get it sold. (It makes no sense to put the 2006 asking price on it and hope for a miracle, she needs to put the 2009 asking price on it to sell it).
2. Find a renter and become a landlord. Ideally she wants enough rent to cover her monthly payment - but that is determined by the supply/demand in her area.
Was thinking this same thoughts as well. So I would encourage her to go ahead with what you have said.
http://blog.financiallysmartonline.com
www.financiallysmartonline.com
http://fsadvice.com
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Mon Dec 28, 2009 6:05 pm |
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dcl2049
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According to her, the way things are right now she is netting about -900 bucks or so a month with all the bills, and doesn't have any backup. She's been in touch with a realtor that has told her she needs to front the cost of inspections and appraisal before anything can really be done, but she is concerned because even though it's only a relatively small amount of money, that's impossible when you're losing 900 bucks a month and have 0 to begin with.
Those fees would be recovered in closing costs but right now she doesn't know what to do to pay for what needs to be done to get rid of the house. That's the problem right now.
She does have a couple cars paid for that she may be able to sell, and had been considering, but most need work and that sale isn't going to happen overnight either. But at least it's something.
The biggest concern is that even though her credit is pretty good, she's considered an "at risk" case because of that income/debt above and had trouble finding anything when looking for some loans.
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Mon Dec 28, 2009 7:13 pm |
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oldguy
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quote:
She's been in touch with a realtor that has told her she needs to front the cost of inspections and appraisal before anything can really be done
That is incorrect - tell her to talk to more realtors before selecting one (and this one sounds like a wrong choice).
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Mon Dec 28, 2009 8:05 pm |
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Raptor
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Any realtor looking for money up front has red flags up all over it, probably some type of scam or looking to push work towards a friend. Inspections and appraisals normally are just rolled up into the closing cost, if not, then don't commit to any until the buyer signed a contract and showed that they actually have financing.
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Mon Dec 28, 2009 11:20 pm |
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coaster
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Apologies if I missed it, but it occurred to me today that maybe a short sale would be a way out at this point. Has she considered that? These days many lenders will consider accepting a short sale in order to avoid a default. They've got foreclosed properties coming out the wazoo...... 
~Tim~
Eye Candy : Why Whimsy
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Tue Dec 29, 2009 4:39 am |
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dcl2049
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Says it's some kind of neighborhood requirement. I'll talk to her and see if she knows anything else about it and ask her about a short sale and second opinions from realtors.
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Wed Dec 30, 2009 1:07 am |
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