| Author | Message | ||
     Ustorque |
Let me just begin with a brief back story and the questions will follow. This past October my father-in-law passed away, leaving my mother in law a widow. In the days that followed his death we came to find out that he and my mother-in-law were in very big trouble money wise (she was not aware) and there was no way she could afford to continue to live in their home without a miracle. To this point she has managed to tread water, but the outcome is inevitable. So here is the question: I would like to assume my mother-in-laws house payment, which is fairly low. The problem comes in when my wife and I factor our home into the equation. Lets say I owe roughly $220,000 on my home, the current home market says i can get roughly 200,000, but i want to sell quick so i price it at $180,000. Is there some type of loan out there which would allow my to take this $40,000 debt with me? Or is there another option? I don't want to purchase my mother-in-laws house, i simply want to make her payments for her and carry my own debt seperately. I know this sounds strange, but im really in need of any help available. The last thing I need to do is take a bad situation and make it worse. I'd just like some info before I sit down with a local professional. Thanks in advance | ||
| Mm128 |
I am NOT an expert... But here are a couple REAL quick sides to it.. You need to find out WHAT she owes... and what the current value of the house/property is. Banks WILL do equity lines of credit, but ONLY to the value appraised. Forexample the senario that you give the answer would be NO. If you OWE 220K but it only appraised at 200K, I doubt the bank would allow you to barrow money on the house due to the negitive equity. You really need to get a PROFESSIONAL appraisal done to BOTH properties to get a current market value and then... see where you stand on a line of credit. She MAY want to look into a RE-Finance loan. Depending on WHAT interest rate the house was purchased under there COULD be some room to lower payments. Sorry for the tough times.. Matt. | ||
| Ustorque |
My appraisal value is not the problem, what is the problem is my ability to "WAIT" for my house to sell. I do not have the luxury of waiting 6-12 months for my house to sell. I am not purchasing her house, She has an amazingly low monthly payment for the amount they have out on their mortgage, and it would be in my best interest to just pay on her note. I basically need to know if there is a specific loan that would allow my to sell my home below what i owe and walk away with a $40,000 loan to cover the shortage. Really nothing more then a $40,000 car loan accept im paying off my mortgage with it. Thanks for the input Matt, it'll all help. | ||
| Sifo |
If I understand this correctly you want to sell your house outright (where you will live is your business) but you are upside down in your mortgage by about $40K. You then want to pay your mom's mortgage payments but not buy the house. You are stuck in selling your house because you would need that $40K at the closing table to get any deal done. Can your mom get a home equity loan for the $40K? Home equity loans often don't care what will be done with them so the money could be gifted to you to cover the closing. You might be better off getting a loan for 50-55K just to cover expenses while you are trying to sell your house. This will help make sure you can make your house payments, and make sure the payments can be made on your mom's mortgage as well as the new home equity loan. This strategy of course assumes that your mom has the equity in her house to do this. After selling your house pay down the home equity loan as fast as possible because it will almost certainly have a higher interest rate. Find a loan officer that you are comfortable talking to. Don't be afraid to walk away if they don't give you a good feeling. A good loan officer is looking to make a long term relationship. Then get business from your kids too. Good ones can get creative, but make sure you get them to explain what is going on in terms that you understand. | ||
| Capital_g |
Looks like you need 40k in assets to borrow against; or 40k in cash to do the deal the way you are wanting to. Unless I am missing something that looks like the only way. Why don't you want to buy from her and have everything in your name? | ||
| Ustorque |
Why don't you want to buy from her and have everything in your name? she currently carries 2 notes in total of about $260,000. Here total monthly payment for both combine to equal about $800.00 a month. If i were to try to purchase the house i couldn't even come close to that. I could be wrong, but walking into that with 40k in debt from my house added onto hers to pull a 300k home loan im sure would bring a much larger payment. At the moment we are just beginning to look into our options, but the main focus is to save the home where my wife grew up, and her mother has lived for some 30+ years. | ||
| Capital_g |
Holy Crap! 260k for 800 per month? How did she do that? Noble cause BTW; wish you luck.  | ||
| Blake |
Not quite sure I understand. You are intending to move in with mom-in-law, yes? If so, then if you have great credit you might be able to find some decent rates on signature loans (credit union, credit cards, etc), but $40 is pushing it. If you have a retirement account, you can suffer the penalties and taxes for early withdrawal, but you might be able to successfully claim a hardship and have the penalties waived. Not sure about the taxes. Consider offering your home for rent, but be VERY rigorous in your tenant investigations. If your current mortgage is at an elevated interest rate, greater than 6.5%, consider refinancing. Quicken loans is one of the top rated. Do this BEFORE you rent the place. | ||
| Spank |
My wife works in the mortgage business at Wells Fargo. If I/we understand what's going on and you are for sure looking to sell your house, she suggested that you do a short-sale on your house. Now this is something that you obviously are going to need to talk to your mortgage company about. Your house will go on the market and be labeled as a short-sale and this cuts down greatly on sell time. I don't know if that makes sense, I will try and get her on here later if you have anymore questions. | ||
| Sifo |
If you have a retirement account, you can suffer the penalties and taxes for early withdrawal, but you might be able to successfully claim a hardship and have the penalties waived. Not sure about the taxes. Not a bad idea if all else comes up short, but I would keep retirement funds as a last resort. You do what you have to do though. | ||
| Ustorque |
Blake, basically yes, we would be moving into my in-laws house. her house has the ability to easily have an in-law type space added on to it, my current home does not have the ability to support any inlaw space. Also it is my wifes childhood home and with the passing of her father, the lose of the house too is just a lot for her to accept. We're not jumping to anything, just hoping someone might be able to offer an unconventional alternative to losing the house. Spank, I think you are onto what im looking to do.....i would be interested in more info, and would appreciate any info your wife might be willing to offer. thanks all | ||
| Strokizator |
Sounds like you have two separate issues. You owe 220k on a house that may only get 180k on a quick sale. What happens to the 40k you still owe? Lots of people are upside down on their mortgages and you will want to talk to someone about this exact situation. Lots of scams out there so talk to an expert. If someone tells you to stop making your house payments, ignore them. The second issue is the 260k you m-i-l owes and pays just $800 a month. You need to see the exact terms of that loan because I suspect there's a big balloon payment due on that in the near future. You'd hate to sell your house, assume her loan and then discover you need to suddenly come up with 100k when a note comes due. Get all the facts before you do anything. Someone is going to end up twisting in the wind and there's no need to volunteer. | ||
| Sifo |
I haven't heard of balloon mortgages for decades, but yes you need to know the terms of what you are taking on. Even a simple ARM can have nasty consequences when rates go up. | ||
| Capital_g |
Mortgage Company will not do a short sale unless you are way behind. If it were that simple tons of people would have been doing it in the last few years. They consider that as a last resort to re-coup their money. | ||
| Spank |
You can do a short sale at any point. There are tons of people doing that along with lone modifications. The banks don't want you to walk away from your home, nor do they want to forclose on a house...that costs them money! Ustorque, what my wife has told me was you need to talk to your mortgage company, get a supervisor (this is key) and tell them whats going on. They will help you, if they are a stand-up company! She also said that if you want, p.m. me and she will try and help you out as much as she can. | ||
| Spdrxb |
I was just thinking... try and build the addition/inlaw/rent space now with equity loan. Rent the "apartment" for 800.00 a month. Then everybody wins, keep both houses, later on make money? Good luck! | ||
| Capital_g |
You can do a short sale at any point. There are tons of people doing that along with lone modifications. The banks don't want you to walk away from your home, nor do they want to foreclose on a house...that costs them money! I agree, walking away and foreclosure costs them money but so does a short sale because the mortgage company is on the hook for the difference. Thats why I said he would need to 40k for the difference. Short sales are are last ditch effort, someone paying on time and current cant get one unless they have the $$ to satisfy the short fall. | ||
| Mm128 |
Ustorque, I heard today on one of the radio talk shows that the Govt extended a RE-Finance service for homeowners that are UPSIDE DOWN in a mortgage and allows them to get LOWER interest rates. It MAY be something you want to check into.. Matt. |
