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merrick100
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Post subject: deed in lieu? |
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| I am considering a DIL on a house I moved out of and no luck selling for 1 yr. I am tired of carrying 2 mortgages and the $ is running out. The house last appraised for $370k and I owe $295. Is a DIL a possible route in this scenario. Renting the house would not cover the mortgage in this area. With this equity would the bank still hit me on the credit? |
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Niicss
Joined: 03 Oct 2005
Posts: 4770
Location: New Jersey
499.28 Dollars($)
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Merrick,
As there is good enough equity in the house why are you attempting a dil? You tried refinancing both into a single one? The house value is at $370k, a lot more than what you owe on both the mortgages combined.
If there is any particular reason because of which you are not attempting to refinance the mortgages and instead looking for a deed in lieu then share it with us.
We can provide you some suggestions on how to deal with the situation if you give us more details.
_________________
Good is the Enemy of Great. |
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merrick100
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Post subject: DIL |
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| I'm afraid the property will become negative if I refinance higher. Debt ratio is horrible as well...77% on paper. The house will not sell at $295k and has been vacant for 1 yr. Taxes are coming due on both houses...$11k total....somethings got to give? At this point, I'm not interested in the equity, I just want out with the least damage to my credit. Any suggestions? |
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miller_st
Joined: 17 Jan 2007
Posts: 918
168.95 Dollars($)
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| Quote: | | I'm afraid the property will become negative if I refinance higher. |
What do you mean by property will become negative? and how?
If appraised value of the house is $370k then lender will do the loan on its basis not on what houses are selling for presently.
| Quote: | | I just want out with the least damage to my credit. |
If you go for a dil, your credit will get affected. So you need to explore all the options before selecting to give up the house through a deed in lieu.
Miller |
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Alex12
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Post subject: |
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Hi Merrick,
If the debt to income ratio is higher, why not go for a no-ratio loan. Such loans do not require borrowers to provide information on debt to income ratio and housing ratio. Instead what is required is you should have a good credit score. Just refer to http://www.mortgagefit.com/know-how/about5903.html#no-ratioloan to know more on No-ratio loans. |
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Chuck B
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Post subject: Problems |
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Hi ,
Me and my wife ( now ex wife ) bought our dream home in Aug 2006 , we ended up splitting only 3 weeks after moving into the new home.. I was left with the house and a payment which was over my head.. I now work two full time jobs to barley pay the payment on time, I have been struggling for the whole year.. , I decided to put my house up for sale 2 weeks ago.. even thougjh no one is buying houses .. , I decided maybe I should try to refinance and get me payments lower, then maybe I could afford to stay here .. but now everyone is telling me they cant refinace because i just put my house on the market and I would have to wait 6 months !! 6 Months ! ? By then I can be in Forecloser ... Any ideas anyone? I know the short sale idea.. but again, no one has even looked at my house. Im getting realy tired of working 14-16 hrs a day 6 days a week to pay for a house I never see.. ANY HELP ADVICE ? I have fantastic credit as of right now.. 800 .. but that wont last long.. as soon as I start being late on my payments .. |
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Chuck B
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Post subject: Also.. one more question.. |
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If I do foreclose on my home.. I know I will get hoit with a 1099 for the earned income ( forgiveness of debt ) and also with a short sale.. Does this also happen with a Deed in lieu ?
Thanks for your time ! |
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miller_st
Joined: 17 Jan 2007
Posts: 918
168.95 Dollars($)
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Post subject: |
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Hi Chuck,
You are in a difficult position and doing two jobs can be really difficult.
But if you want save your excellent credit score, you should continue both jobs for some more time. I know it would be difficult but there is no better option right now.
Take the home off the market first and then after couple of months contact lenders about a refinance. I am sure they will agree then to consider refinancing your loan.
Foreclosure, deed in lieu and short sale, all will spoil your credit score. So it would be better if these can be avoided.
Miller |
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Chuck B
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Post subject: Thank You |
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Thanks for the advice ! I appreciate it !
If I leave the house on the market for 90 days and ask my lenders for a Deed in lieu , do I still get the 1099 for debt forgiveness?
- Chuck |
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Niicss
Joined: 03 Oct 2005
Posts: 4770
Location: New Jersey
499.28 Dollars($)
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Post subject: |
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Hi Chuck,
You will have to first take the house back from market before which lender would listen to anything.
And even after accepting a dil, lender would send a 1099 for debt forgiven.
_________________
Good is the Enemy of Great. |
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Jeri
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Post subject: deed in lieu |
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What happens if your house is worth less than what you owe and you do a deed in lieu?
Thank You |
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larry
Joined: 27 Jun 2007
Posts: 3322
474.67 Dollars($)
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Post subject: |
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Hi Jeri,
After giving away the property through a deed-in-lieu, the lender cannot come after you for anything else. It means that you will not owe the lender any more money even if the sale through deed-in-lieu does not cover what you owed on your mortgage. |
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orders
Joined: 25 Sep 2007
Posts: 2
1.86 Dollars($)
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Post subject: Deed-in-lieu |
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Deed in lieu sounds great. I have a friend that's behind in his mortgage payments and he is thinking about doing a short sale. Can you tell me which is better a short sale or a deed in lieu?
_________________
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sara
Moderator
Joined: 05 Jul 2006
Posts: 2642
Location: New Brunswick, New Jersey
488.01 Dollars($)
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Post subject: RE: what if home value less than what you owe |
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Hi Jeri,
You will still owe money even if the home sale through deed-in-lieu does not give the lender a price enough to cover your outstanding balance. Ideally you should pay off the remaining loan balance but even if you don't, the lender cannot seek a deficiency judgement. He may at best declare the debt as forgiven and as such you may have to pay the IRS a certain amount of tax.
Take Care
_________________
Find me at FB: http://www.facebook.com/people/Sara-Jones/100002976822020 |
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larry
Joined: 27 Jun 2007
Posts: 3322
474.67 Dollars($)
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Post subject: |
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Hi,
A short sale and a deed-in-lieu - both have a negative impact on the credit report of a borrower. So, even if your friend does a deed-in-lieu or a short sale, it will hamper his credit report.
However, with a short sale, the loan shows up as 'paid' or 'settled for less than originally owed' in the credit report, which I think is better then a deed-in-lieu of foreclosure. |
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