Financial question, please?

Question

I am currently in two homes at the same time. I own one that I'm trying to sell and leasing and living in the house of my dreams.  The old house ( a townhome condominium) has been on the market for a year and no takers.  I have reduced the price two times so far and have put about 2500.00 in the home for paint and some repairs.  The condo is not in perfect condition, but with prices in the neighborhood already well below what most owners owe on the, my hope is that I'll at least break even on that mortgage. I am very frustrated that it won't sell.  I have also been through two realty companies. Should I default on the mortgage?  My current friends from whom I am leasing certainly won't care, but it will ruin my otherwise good credit.  Should I try to rent the old property so that at least I have some money coming in?  I don't relish being a land-lord, but I'll do it if that is the only way. Thanks to all serious replys!

ADP_14 · Accepted Answer

If you can get enough of a rental so you can afford to carry both, then by all means do so.

If prices are really creshing, it's often a good idea to price BELOW what the market is doing right now.  By undercutting, you can sometimes find a buyer a lot faster then if you slowly reduce the price with the herd.  You can unload it for cheap, and then wave at the others as they go by still riding their crashing values down to the bottom.  it may not be ideal, but it's better then riding the wave all the way to the inevitable dead end.

Tambo1228 · Answer

Well,well,well, join the rest of us, you have options, contact the mortgage company, tell them you want to do a short sale, or modify the loan, you can lease with option to buy, or wait out the market with renters, or refinance your current loan based on the current value of the home. The banks will work with you before taking another foreclosure, tell them if they don't then foreclosure the only alternative they have forced you to take. DO NOT DEFAULT ON THAT MORTGAGE and ruin your good name and credit. You're leasing your dream home don't you want to owen it?  If you must  have some money rent it, try not to because if it is not in good condition you might be in for a nightmare dealing with renters, but or a peace of mind do the short sale.     Good Luck

Paul in San Diego · Answer

Do not go into foreclosure if you do not have to. Some people might think, "It's no big deal. I'll just have this blotch on my credit history."

Well, it *is* a big deal. Low credit scores can mean anything from being denied credit cards to rentals, to getting a cell phone. Even potential employers sometimes check credit histories. I guarantee that, if you walk away, you'll be kicking yourself for the next 7 years that the forclosure is on your record. What if that property you're leasing - or one just like it - comes up for sale in the next year or two? You wouldn't even have a chance at buying it.

Rent it out as long as you can. Sell it and break even if you have to. Just don't throw your good credit away for no reason.

godged · Answer

It may not be a big deal to your friends you lease from, but with that foreclosure, your credit score will plummet, and you will pay more for everything based on credit score, including credit cards, insurance, etc, etc..  

If your HOA allows you to rent it out, do so.  Even selling at a bit of a loss will be better than defaulting. 

Whatever you do, DO NOT default on your mortgage, that will have long reaching, lengthy consequences.

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Financial question, please?

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