Posted: Tue Sep 28, 2010 11:43 pm Post subject: Need advice on my now second home in california...
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Hey,
I bought a condo in 2006 at the height of the market in the Los Angeles area... It is now worth around 50% less than what it was due to a number of different problems in the building as well as of course the market. I got married and recently bought a house by qualifying for both mortgage payments with my wife. We plan on having a family and had to move somewhere bigger than a 1 bedroom condo. I have a terrible interest only loan with the condo(I was young and stupid), and of course can't refinance because of the price of the condo.
We bought a larger and only slightly more expensive house than the original by saving up a lot for a large downpayment,this used up pretty much all of our liquid assets. We love our new house, however the condo is a ball and chain on our lives basically losing $1000 a month even when we are renting it. Originally I had bought the condo with my uncle but he then had to get out of the agreement because he had some tax issues... I agreed not knowing the market would collapse, and we refinanced. He took out his original downpayment, however I did not take out mine. I am not sure what type of refinance it was, it seems that from looking at it I may have purchased it off of him, there is two loans on the house.
I intend on talking to some real estate lawyers for opinions. I am not in a horrible situation now because luckily I can afford the loss on the condo at the moment, however it is painful every month to do so and it will make it very difficult for us to have children I think...
I love my new house and don't want to lose it.
I am just looking for opinions, should I keep renting it out and taking the loss? I have pretty much nothing invested in this house since I have paid 0 principal and had a very small downpayment(3%).
Should I try to shortsell? I think it would be difficult because I don't really have a financial hardship...
Should I consider foreclosure? I would like to avoid this, however my credit score really isn't an issue to me. I just don't want to lose my current house, car, etc... I am curious since I refinanced to let my uncle out of the loan how that would go down?
Please don't be too judgmental, I am more just looking for the facts, I don't blame the banks or anything like that... I don't see this building ever recovering and when my loan goes from interest only to paying principal I won't be able to afford it at all.. if I could go back in time and kick my young dumb self I would. _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
I can understand your situation. Unless you have a financial hardship, the lender will not be ready to short sale your property or offer you a financial hardship. In my opinion, you should list the property in the market for sale. If you get buyers for the property, then you can sell it off and you may pay off the rest of the loan amount to the lender.
Take care.
NeedALittleAdvice Guest
Posted: Wed Sep 29, 2010 10:31 am Post subject: hmmm
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There is no way I can afford to pay the balance of the loan(over 150k)... so that isn't really an option.
In that case, after the sale of the property, you can request the lender to forgive the dues or give you an affordable repayment plan so that you can pay him back. _________________ Procrastination is the enemy of your financial success
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sara
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