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Decreased value and no options

I purchased my home in August of 2007 and since then as we all know the market has fallen.  I was approached about another home that needs work and will be financed through a friend.  What can I do with my current home to get rid of it?  How do I go about a short sale?  What about foreclosure?  I owe about 20k more then what the value of the home is.  How can I do this and not screw my credit up?  Please help!!!!!!!
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October 22 2012 - Wilson
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Profile picture for wetdawgs
Ofe is quite right, you don't qualify for a short sale just because you owe more money than you can sell it for.   You have to demonstrate that you've had a hardship.  Here's a link describing the short sale qualification.

The best way to keep your options open for another purchase immediately is to bring money to closing so you meet your obligations for a loan.  It isn't discussed often, but many people do so.   



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October 22 2012
Doing a short sale is not as easy as it may sound.  You do not wake up one day and say, I want to move and get rid of this property.  You have to prove to the lender that you are under a severe hardship.  Having said that, if you are in a hardship position you are not able to purchase another home.  The only way that your idea may work for you is if you are allowed to rent your property, since the other home will be owner financed, your seller may allow you to do that.   Good luck~!
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October 22 2012
I agree with Joe below.  Also, have you considered renting your current property to cover costs until values return?
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October 22 2012

The only way to truly leave your credit intact is to come up with the difference (20k) when selling the home. If this is not an option, then a short sale is the better bet. Your credit will be affected, but not impacted as harshly as a full blown foreclosure.

Try to take all steps to avoid foreclosure if possible.

However, there are tax and legal consequences to a sale, foreclosure or short sale. You should speak to a tax and legal professional before moving forward. They can assess your particular situation and help you weigh all your options.

Good Luck!

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October 22 2012
 
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Decreased value and no options
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Latest answer by wetdawgs
October 22 2012 | 4 answers
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