short sale after buying another home?

Guest 0.10 Dollars($)

Posted: Mon Dec 24, 2007 10:41 am Post subject: short sale

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In continuation of my first question-
I found out it will take about 60k to do the repairs and add the space we need. I have 45k in savings that I really didnt want to touch . The house is allready mortgaged beyond its value and what I could afford. I do have a 45k heilock 2cnd I havent tapped into yet, but that would raise my monthly even that much further. The housing market has dropped around here (as everywhere) so when I look at the listings and see that I could get more house for less money I ask myself do I really want to dump more money into a problem house. What do you guys think of renting the house out after repairing the floor and purchasing another home ? It would meen having two renters on my property - a very big potential problem for me. -or could I do a short sale before or after buying another home.

larry · Joined: 27 Jun 2007 Posts: 3328 473.51 Dollars($)

Hi Southernmetal,

Now here the question is can you afford two mortgages together? I think it's better if you short sale the previous one before you buy the new house. Short sale will affect your credit report less and the deficiency judgment also may be exempted.

Best of luck,
Happy holidays

blue · Posted: Mon Dec 24, 2007 7:29 pm Post subject:

Hi,

Welcome to Mortgagefit discussion board.

I agree with Larry. It seems that it will be very difficult for you to carry two mortgages at the same time. Sell the property and try to pay as much as you can before buying the new house.

Contact with a real estate agent before deciding the matter.

Do let me know if you have any other questions.

Thanks
Blue

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.80 Dollars($)

Hello Southermetal,

Do you have plans to buy another house? Will you take mortgage for that?

I don't think that will be an intelligent choice.

You may put up your house on rent after the repairs are complete. That will help you to make the monthly mortgage payments.

Guest 0.10 Dollars($)

I am sorry. In a previous question I had stated that I had transformed a seperate garage into an apartment. I have asteady renter at 850mth currently. I would like to buy a new place to move my family to and then make the neccessary repairs to my current home while empty..then find a renter for the main house.

Guest 0.10 Dollars($)

If the result six months later is that renters aren't paying or some other unforseen would it still be possible to do a short sale to what would then be an investment property?

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.80 Dollars($)

Hello Southernmetal,

There lies the risk. If there are no renters or if they are not paying then you may have payment defaults. You may do a short sale but if the market is down then the unpaid balance could be more than expected. And you shall remain responsible to pay off the balance if the lender seeks deficiency judgment.

In such a situation if there is yet another mortgage in your name will you be able to manage that?

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.03 Dollars($)

Hi southernmetal,

You can do a short sale at any time even if it is an investment property. I would only rent it out if you see the home appreciating over time.

Question: Do you owe more than what the home is worth? If yes, then that would be the only reason for a short sale. Otherwise it would just be a regular sale.

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