Posted on: 22nd Sep, 2008 06:49 pm
i bought a house and i am paying 93,000 for it and i took out a home equity loan for 13,000 from a different place but i am about to forclose on the first morgage what will happen to the home equity loan
Hi skithuy!
Welcome to the forums!
The home equity loan is subordinate to the first mortgage of the house. As far as my knowledge, the lender can forgive the home equity loan. But it is solely his discretion. If he forgives the loan, then he will report this as an income to the IRS. They you will have to pay taxes on that. This will also affect your credit score.
If you do not want to foreclose then you can go for deed in lieu or short sale. You may consult your lender for the same.
Feel free to ask if you have further queries.
Sussane.
Welcome to the forums!
The home equity loan is subordinate to the first mortgage of the house. As far as my knowledge, the lender can forgive the home equity loan. But it is solely his discretion. If he forgives the loan, then he will report this as an income to the IRS. They you will have to pay taxes on that. This will also affect your credit score.
If you do not want to foreclose then you can go for deed in lieu or short sale. You may consult your lender for the same.
Feel free to ask if you have further queries.
Sussane.