Home Purchase Decision

[SandEagle]

ok, so with the way the state of the housing market is I need to make a decision and quick.


My situation:

Existing home purchase price 2005: 165,000
Currently owe: 148,000 (27 more years at 5.8% fixed)
Appraised 2 years ago at: 177,000
Took out home equity: 20,000
Owe total: 168,000
Estimate appraisal now: 158,000

so basically, i'm in negative territories here. I am thinking of applying for another home loan and purchasing a 2nd home for ~ 130,000. This home is much bigger and in a nicer neighborhood. It's a foreclosure property. Can I just way away from my first home loan and equity loan?

Before any of you start yapping BS, I am a financially responsible person. Paid off 50K in credit card debt and have tried living within my means. It's unfortunate that we get the short end of the stick in this financial mess. If the stimulus package was to help me out by reducing principal to current appraisal, I'd stay. what do you guys think?

 

[bignateyk]

I don't think anyone will loan you money if you just walk away from your current loan. Unless I am mis-understanding what you are trying to do...

 

[OrByte]

any chance you can rent out your current place?

Thats what I had to do.

 

[ric1287]

Originally posted by: SandEagle
ok, so with the way the state of the housing market is I need to make a decision and quick.


My situation:

Existing home purchase price 2005: 165,000
Currently owe: 148,000 (27 more years at 5.8% fixed)
Appraised 2 years ago at: 177,000
Took out home equity: 20,000
Owe total: 168,000
Estimate appraisal now: 158,000

so basically, i'm in negative territories here. I am thinking of applying for another home loan and purchasing a 2nd home for ~ 130,000. This home is much bigger and in a nicer neighborhood. It's a foreclosure property. Can I just way away from my first home loan and equity loan?

Before any of you start yapping BS, I am a financially responsible person. Paid off 50K in credit card debt and have tried living within my means. It's unfortunate that we get the short end of the stick in this financial mess. If the stimulus package was to help me out by reducing principal to current appraisal, I'd stay. what do you guys think?

If by "way away from my first home" you mean stop paying....then no, you are not financially responsible.

 

[mugs]

Originally posted by: SandEagle
I am a financially responsible person.

No, you aren't.

 

[waggy]

hahahahahahah you say you are financially responsible but youw ant to "walk away from" a home?


first if you are upside down on teh first hous eloan i doubt very much you will get a loan.


fuck im tired of people like you.

 

[SandEagle]

Originally posted by: bignateyk
I don't think anyone will loan you money if you just walk away from your current loan. Unless I am mis-understanding what you are trying to do...

um, i will get a 2nd loan first and buy the new home before walking away from the first.

 

[MrChad]

Originally posted by: SandEagle
ok, so with the way the state of the housing market is I need to make a decision and quick.


My situation:

Existing home purchase price 2005: 165,000
Currently owe: 148,000 (27 more years at 5.8% fixed)
Appraised 2 years ago at: 177,000
Took out home equity: 20,000
Owe total: 168,000
Estimate appraisal now: 158,000

so basically, i'm in negative territories here. I am thinking of applying for another home loan and purchasing a 2nd home for ~ 130,000. This home is much bigger and in a nicer neighborhood. It's a foreclosure property. Can I just way away from my first home loan and equity loan?

Before any of you start yapping BS, I am a financially responsible person. Paid off 50K in credit card debt and have tried living within my means. It's unfortunate that we get the short end of the stick in this financial mess. If the stimulus package was to help me out by reducing principal to current appraisal, I'd stay. what do you guys think?

You *could* walk away. Many people do, because the banks can't really do anything other than foreclose on the home and reclaim it (i.e., they can't garnish your wages or seize other property). They CAN and WILL trash your credit rating if you abandon your loan, so good luck purchasing that second home.

 

[OCGuy]

What does it matter if you are upside down if you never sell?

People are upside down on their cars all the time and never have the need to sell it.


Also, "2nd home" purchases are very tightly controlled, and usually need to be in a resort-type area. If it does not fly this way, you would have to put 25% down as an investment property.

You can purchase it as your primary residence and rent out your current home, but your net income is going to take the negative from the amount you can rent it for and your PITI.

If you make enough money that this doesnt matter, I really dont understand why being a little upside down in your house matters at all.

 

[K1052]

Originally posted by: SandEagle

Originally posted by: bignateyk
I don't think anyone will loan you money if you just walk away from your current loan. Unless I am mis-understanding what you are trying to do...

um, i will get a 2nd loan first and buy the new home before walking away from the first.

lol...good luck getting approved for the 2nd loan

 

[MrChad]

Originally posted by: SandEagle

Originally posted by: bignateyk
I don't think anyone will loan you money if you just walk away from your current loan. Unless I am mis-understanding what you are trying to do...

um, i will get a 2nd loan first and buy the new home before walking away from the first.

Do you honestly think a bank will loan you $130,000 when you have an active mortgage on the books?

Stop trying to scam the system. If you are still able to make your mortgage payments, your best bet is to continue paying down your mortgage and wait it out in your current home. Hopefully housing prices will bounce back and you'll regain some equity.

 

[ggnl]

wow, prepare to be flamed unmercifully

 

[vi edit]

Originally posted by: K1052

Originally posted by: SandEagle

Originally posted by: bignateyk
I don't think anyone will loan you money if you just walk away from your current loan. Unless I am mis-understanding what you are trying to do...

um, i will get a 2nd loan first and buy the new home before walking away from the first.

lol...good luck getting approved for the 2nd loan

No kidding. If you don't have a written offer for your current home, you are going to have to be approved to pay the mortgages on BOTH homes.

And if you are in this situation, I doubt you are in the fiscal position to be approved for two mortgages at the same time.

 

[OCGuy]

Originally posted by: MrChad

Originally posted by: SandEagle

Originally posted by: bignateyk
I don't think anyone will loan you money if you just walk away from your current loan. Unless I am mis-understanding what you are trying to do...

um, i will get a 2nd loan first and buy the new home before walking away from the first.

Do you honestly think a bank will loan you $130,000 when you have an active mortgage on the books?

Stop trying to scam the system. If you are still able to make your mortgage payments, your best bet is to continue paying down your mortgage and wait it out in your current home. Hopefully housing prices will bounce back and you'll regain some equity.

Actually this is correct, so I amend my first post. Fannie Mae guidelines now require 30% equity in your current home in order to say you are going to keep it as a rental.

If you are in the -equity area on your current home, you will have to get hit for the full payment on it in your ratios, which means you probably wont qualify unless you make 60-70K assuming you have average debt.

 

[dullard]

Yes, you can just walk away. It is a very stupid idea, but you can do it. I sure wouldn't trash my future over a miniscule $10k. That is probably only a couple months of work for you. In other words, you'll make the next ~40 years of your life significantly worse just to avoid working 2-3 more months in retirement.

Good luck coming up with a downpayment and a lender for a second home while you are upside down with your first.

 

[DisgruntledVirus]

If you can pay your mortgage, why are you caring that you are upside down? Not even by a large amount either.

 

[Tweak155]

Originally posted by: bignateyk
I don't think anyone will loan you money if you just walk away from your current loan. Unless I am mis-understanding what you are trying to do...

Sounds like getting a 2nd loan THEN walking away from the first loan.

I hope this is incorrect. If it isn't you are a prick.

EDIT:

Wow I left my reply window open WAY too long.

 

[JeffreyLebowski]

Here's an idea, if you don't want to own a home and have financial responsibilty for the place you live at, rent.

I hope your post is a joke, because if not, you are not financial responsible as you claim. If you're going to buy a second home, you're going to need to show a huge income to debt ratio. When you apply for your 2nd home loan, you'll have to report your mortgage and HEL.

The "stimulus package" isn't going to help homeowners that want to do the right thing and pay their loans. If you want it to help, you'll need to stop paying your mortgage now, get 6 months behind and hope it goes through and that you meet the requirements.

Just realize, that if you buy a forclosed home, it's probably not going to be in good shape. Let's face it the people couldn't afford to pay the mortgage, what makes you think they could afford to pay to keep the house maintained?

 

[MiniDoom]

damn, people like you are the ones who caused most of the financial mess we are in now. thanks.

 

[Reel]

Be part of the solution and not part of the problem.

 

[SandEagle]

Originally posted by: Tweak155

Originally posted by: bignateyk
I don't think anyone will loan you money if you just walk away from your current loan. Unless I am mis-understanding what you are trying to do...

Sounds like getting a 2nd loan THEN walking away from the first loan.

I hope this is incorrect. If it isn't you are a prick.

EDIT:

Wow I left my reply window open WAY too long.

correct, and yes im a prick just like 90% of ATOT. my debt to income ratio should help me with this since I have pretty much 0 debt and make decent dollars

Originally posted by: rdubbz420
damn, people like you are the ones who caused most of the financial mess we are in now. thanks.

wrong. i'm in this situation because banks loaned out to those that couldn't afford it, helping to cause the mortgage meltdown and taking equity away from me

 

[rudeguy]

so your problem is that you can't afford the monthly payments on your mortgage and your loan, correct?

 

[spidey07]

Originally posted by: SandEagle

correct, and yes im a prick just like 90% of ATOT. my debt to income ratio should help me with this since I have pretty much 0 debt and make decent dollars

*facepalm*
What do you think a mortgage is? And what the hell happened to the 20,000 CASH with the HELOC.

 

[MrChad]

Originally posted by: SandEagle
correct, and yes im a prick just like 90% of ATOT. my debt to income ratio should help me with this since I have pretty much 0 debt and make decent dollars

FYI

Mortgage does, in fact, count as debt.

 

[waggy]

Originally posted by: SandEagle

Originally posted by: Tweak155

Originally posted by: bignateyk
I don't think anyone will loan you money if you just walk away from your current loan. Unless I am mis-understanding what you are trying to do...

Sounds like getting a 2nd loan THEN walking away from the first loan.

I hope this is incorrect. If it isn't you are a prick.

EDIT:

Wow I left my reply window open WAY too long.

correct, and yes im a prick just like 90% of ATOT. my debt to income ratio should help me with this since I have pretty much 0 debt and make decent dollars

err you do have debt.