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Must sell our house for less than what is owed on our mortgage - how do we pay off the rest of it?
So say we owe $93,000 on our mortgage. We want to sell the crappy house and move out of state. However, the house's value is closer to $75,000 to $80,000 (that's what plenty of houses in the area are going for that are similar or BETTER than our house).
So say we sell it to someone for $80,000. How do we pay off that other $13,000 on the mortgage? Does the bank want it RIGHT AWAY? Do we have to get approved for another loan for the $13,000 so we can pay the bank off right away? Or can we still make payments to the bank for the $13,000 on the original mortgage loan after we sell the house?
If we have to take out a loan for the $13,000, will we be able to get a mortgage loan for the house we want to buy in another state when we still have that $13,000 debt on our credit report (assuming good credit)?
Or will we need to get a loan for that $13,000, pay it off while living in an apartment for awhile, and then after its paid off try to get approval to buy a house where we want?
I just really don't know how this all works. But I do know that there is no way in hell our house is going to sell for the $93,000 we owe on the mortgage. It's been on the market at that price since September and we've only had one offer. It was for $70,000 and my hubby wasn't interested in taking that big of a loss. He'd rather wait it out longer which is what we've been doing.
i suggest you try other ideas-- a few are
a; rent out your house, even lease with option to buy to someone
who has poor credit
b; trade your home for where you want to go-- i can help with that.
c; STOP borrowing for a while. Begin making small extra payments
on the current mortgage. I can explain how to do that.
there are more ideas.
get hold of me --no cost for my help--not till you
wind up trading if you do........otherwise, nothing for my time
Source(s):5 years ago
You cannot sell it for 80k without bank approval. The house is not yours to sell unless you pay off the 93k. You need to talk to your lender about a short sale. Meaning the bank will settle for the 80k and you will owe nothing. Get approval in writingby sassy2 - 5 years ago
You cannot sell it without coming up with the cash shortfall yourselves. The only possible option is a short sale - but lenders will normally only approve that if the alternative is foreclosure.by jlf - 5 years ago
This is tricky, and you are not alone in your misunderstanding of home loans.
A lot of people go get loans without really understanding what they are getting into, and then when something changes they get all flustered.
Here's a suggestion, go get your loan papers and you and your husband need to read them over and try and figure out what it is saying.
Then after that, if it still doesn't make the terms of the loan crystal clear...just make an appointment with your bank loan officer and have tell them what you are thinking of doing and have them explain.
My advice: whatever you do, do not make the mistake of thinking its a good idea to get into more debt, by buying another house before you sell the one you are in.
Lots of people will tell you that is why the real estate market is so screwed up right now.
People are getting in too deep in debt, then are defaulting, and getting foreclosed on.
You might have to come to the reality that you need to stay put for a few more years in your house and perhaps get a second job to pay off the mortgage quicker. ??