Posted on: 13th Jun, 2007 11:39 pm
Hello,
My wife and I have a rental unit in Detroit on the market for several thousand below the loan amount. No interest in a couple of months and I’m starting to think of other alternatives. We are doing ok financially but would like to weigh the benefits of losing $30k vs. proceeding with a DIL. We’d like to buy a primary residence within two years so we are very sensitive to the credit score impact.
1.How closely will a mortgage company examine income level? If they determine we should be able to pay off the loan, will they deny any attempts on DIL? Are savings considered?
2.My wife and I plan to take time off in 2008, which means our income will be very low. Could we coincide the DIL shortly after the return since our W2 will show next to nothing?
3.Can I remove one of our (wife/i) names from the loan so if we did do a DIL, it would only affect one of our credit scores? Goal here would be for future loan request would be done by the person with a good credit score.
Thanks for your assistance.
Mike
My wife and I have a rental unit in Detroit on the market for several thousand below the loan amount. No interest in a couple of months and I’m starting to think of other alternatives. We are doing ok financially but would like to weigh the benefits of losing $30k vs. proceeding with a DIL. We’d like to buy a primary residence within two years so we are very sensitive to the credit score impact.
1.How closely will a mortgage company examine income level? If they determine we should be able to pay off the loan, will they deny any attempts on DIL? Are savings considered?
2.My wife and I plan to take time off in 2008, which means our income will be very low. Could we coincide the DIL shortly after the return since our W2 will show next to nothing?
3.Can I remove one of our (wife/i) names from the loan so if we did do a DIL, it would only affect one of our credit scores? Goal here would be for future loan request would be done by the person with a good credit score.
Thanks for your assistance.
Mike
Welcome Mike.
What I've understood from your post is, you wish to compare the benefit of selling the home for 30k with going for a deed-in-lieu.
It is true that a deed-in-lieu would affect your credit score but 2 years is time enough to rebuild your credit. So, what you can do is, consult the lender and explain that you would prefer deed-in-lieu and also state the circumstances that are responsible. Just follow the simple steps for the deed-in-lieu process.
Thanks.
What I've understood from your post is, you wish to compare the benefit of selling the home for 30k with going for a deed-in-lieu.
It is true that a deed-in-lieu would affect your credit score but 2 years is time enough to rebuild your credit. So, what you can do is, consult the lender and explain that you would prefer deed-in-lieu and also state the circumstances that are responsible. Just follow the simple steps for the deed-in-lieu process.
Thanks.
"Can I remove one of our (wife/i) names from the loan so if we did do a DIL, it would only affect one of our credit scores? Goal here would be for future loan request would be done by the person with a good credit score. "
To remove your wife from the loan it will have to be refinanced Mike. The way you are thinking about it is correct. Removing one of you from the loan will help with your future plans of getting a new house down the line as her score will not be affected because of the dil.
To remove your wife from the loan it will have to be refinanced Mike. The way you are thinking about it is correct. Removing one of you from the loan will help with your future plans of getting a new house down the line as her score will not be affected because of the dil.
Ok Mike, so you mean how closely the mortgage company is going to find out whether you have the income to pay off the loan or will it be correct for them to allow you for deed-in-lieu. Well, as much as I know, lenders initially do not suggest a deed-in-lieu because it does not allow them to claim for any deficiency on account of the home sale after deed-in-lieu. However, I don't think they will object just because you have some savings. If you can give a valid reason as to why you cannot pay down the debt, then that will work out for you.
Good luck!
Good luck!
"1.How closely will a mortgage company examine income level? If they determine we should be able to pay off the loan, will they deny any attempts on DIL? Are savings considered? "
They will look at your income to know the reason you are not able to continue the payments. If they ascertain that you are in good financial position then they can deny a DIL. Deed in lieu is not what the lender prefers as he is not going to gain from accepting the house through DIL.
They will look at your income to know the reason you are not able to continue the payments. If they ascertain that you are in good financial position then they can deny a DIL. Deed in lieu is not what the lender prefers as he is not going to gain from accepting the house through DIL.