Profile picture for blufirexxx

Buying new home when you owe more than value of current home

With the drop of housing prices my home (according to Zillow) is now worth 20-50k less than what I still owe on it. If I raid my 401k, I could probably get 3% down on a new house, but still owe the difference on my current mortgage. I'm going to hold out for a top price on my home, since I don't need to move, I would just like to. So I'm hoping to owe less than 20k on my current mortgage after closing. Are there any kind of programs that would help me out in this situation?
  • February 21 2012 - Sykesville
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Answers (6)

Profile picture for shapiroamg
Why dont you get a Market Analysis from a Realtor and figure out what you might actually get for selling. Zillow is only one tool and I wouldnt bet my life on it's accuracy.
  • February 21 2012
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You could also try to qualify carrying both mortgages, your old one, plus the mortgage payment on the new property.  This would allow you to wait to sell your existing home at a time that you see right.

  • February 21 2012
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I am a little confused.  You are saying that you would have to "raid" your 401k to come up with 3% down on the new home, but you are also holding out for the best price on the sale of your current home.  So are you saying that you would use your 401k to cover the shortfall on the sale of your current home as well as the 3% downpayment on the new one? 

If not, then you are faced with the problem of disposing of your current home.  And when you are "upside down", none of your options are without consequences.  If you can, please clarify for me.  Thanks.
  • February 21 2012
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Profile picture for blufirexxx
I would hold out and only sell my house if I could get close to what I owe (like I said I don't need to move I would just like to, so I have the option of holding out) and use savings to pay off the difference. Then using 401k money for only the down payment on the new mortgage.
  • February 21 2012
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Profile picture for Cindy Quinton
Have you checked to see if you qualify for any of the government programs? These links may help.

http://www.makinghomesaffordable.gov

http://www.dailypilot.com/news/opinion/tn-dre-0225-jergler-20120221,0,1315218.story

Remember, you will also probably have some selling expenses, including real estate agent fees, which could be in the neighborhood of 6 to 10% of the price of your home. My limited time watching the market tells me that overpriced homes sit and sit and sit....it really seems like a waste of time.
 
I do hope things work out for you, good luck.
  • February 21 2012
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Profile picture for Caveat Emptor
pay an extra 200/ month. it is a great program and will help simplify the buying/selling process.
  • February 21 2012
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