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rent vs short sale

Ok so here it goes. I came across this forum while looking for answers. My husband recently was laid off and we are moving to another state where he will begin working. Here is my question. We are upside down in our house about 25k. We have never been late on our mortgage. I have reached out to a RE who is really pushing a short sale. We are looking to move within the next month or so. I have researched property management companies to handle the rental of our house because we will not be in the area. I am not sure if the rental amount is comparable to what we will need to rent out our home. I will not find that out until I have spoken with the property management firm. I am really confused on what to do. Try to short sale or rent the property. We do not have 25k to pay the difference. We are in TN and moving to GA.

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I am kind of in the same boat as tcharite, but i didnt lose my job, i am getting a divorce. i am in the military and living in korea. the ex and the kids were living in the house over the past two years while i have been here and now i will be moving to florida after this assignment. my ex just informed me they were relocating to virginia by the end of the year. i have owned the house since 2007 and have never been late on a payment, but having to move to florida at the request of the government, i will have a mortgage in delaware on a house i am not occupying and rent in florida where i will be living for an unforeseen amount of time. Rent or Short sale? i was told i would not be approved a short sale because i never missed a payment. can i apply for short sale if i am current on my mortgage and have never been late?

Like | Dislike | Share | Posted: Sat, 10/16/2010 - 22:55 | Post subject:

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savior70 | Joined: March 25, 2009 05:14 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

To Guest,

If you're sure you can rent the property out for sufficient money to cover the mortgage payment, you should go for it. Short selling the property or doing a deed in lieu (DIL) will affect your credit adversely. Renting the property would be a much better option as it will keep your credit score safe from any damage.

In case you need to deed in lieu the property, you will be required to put the house on the market for some amount of time. The time requirement will depend on an individual lender. Deed in lieu is not hard to get, provided you can explain your hardship and you can show that you tried to sell the property before going for the DIL.

Like | Dislike | Share | Posted: Wed, 04/07/2010 - 03:02

jenkin7's picture
jenkin7 | Joined: June 4, 2007 11:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi tcharite,

It's good to hear that your husband has found another employment and will soon start working. Since he will have to move to another state for employment, you have no way but to leave this property. Renting out this home would be a good option. But will the rental income from this property be enough to cover the mortgage payment? Otherwise, you will have to come up with out-of-pocket cash to stay current on the mortgage.

A short sale will relieve you from the liability of the existing mortgage. But chances are that the lender would want to come after you for the deficiency from the short sale of the property. Have you checked with your lender if you qualify for a deed in lieu of foreclosure? In most of the cases, lenders do not come after borrowers for the deficiency from the deed in lieu.

Like | Dislike | Share | Posted: Tue, 04/06/2010 - 00:26

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thanks for responding. I have researched rental comps in the area and there are really no houses for rent under 850.00. I pay 900 a month on our mortgage. I think that we will be able to rent the house out to cover the mortgage. We have worked so hard to build our credit and I know that DIL will hit your credit like a foreclosure. I just want to make sure that I have weighed all of our options and make the right decision. How hard is it to get the DIL? Do you have to put the house on the market before they will even consider it?

Like | Dislike | Share | Posted: Tue, 04/06/2010 - 06:58

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