Profile picture for doug9519

My house could be sold for $ 400,000 in California and...

I owe $200,000. total in Mortgage Loans leaving me an equity of $ 200,000. Is there any programs that will let me use my equity to pay off the mortgage loans? I realize I would have no remaining equity, but at least I would own my home free and clear. FYI: I am 5 months behind on my mortgage payments...
  • October 12 2010 - Los Angeles
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Answers (19)

Profile picture for sunnyview
Good question, but I can't see how you could do that since the "equity" is unrealized until it is converted to cash either through a sale to a buyer or a refinance through a lender. The fact that you're behind on payments would make both options difficult. Maybe the others will have better ideas about what you could do.
  • October 12 2010
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Profile picture for the_country_hick
Forge any scheme to get free money. Just put the house up for sale and get out from under it.

You can get money from the house which is a lot better than many people who can only lose their house.
  • October 12 2010
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Doug,

If you sincerely what some help, give me a call. .... Rudi
  • October 12 2010
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That's magical thinking at it's best.

The oxymoron of the day:

"I realize I would have no remaining equity, but at least I would own my home free and clear."

How do you "own" a home "free and clear" and have no equity when it's worth $400K?
  • October 12 2010
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If you can't come up with the back payments, it's time to think about selling your home and realizing some cash back in your pocket instead of losing the home to foreclosure.

If I were in your shoes I would immediately contact a Realtor and put my house on the market 25-50k below recent comparable solds.  

  • October 12 2010
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Profile picture for SoCal Engr
If you think about it for a second, you will see the flaw in your logic.

You owe $200K on a $400K value. You borrow $200K (the equity) for the purpose of paying off the original $200K. However, you "borrowed" that money, so you now owe someone else $200K. Effectively, all you've done is changed who you owe money to.

If you really have 50% equity, talk to a lender about working out a refi - which may now be difficult since you have the missed payments.
  • October 12 2010
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you are going to need  a hard money lender send me an email
  • October 13 2010
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Profile picture for sunnyview
Why would they need a hard money lender to charge them a lot of interest and then lose their house to them without discharging the balance owed? That sounds like a bad deal to me. Maybe you could explain.
  • October 13 2010
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Depending on your age and amount of equity you have, you could  possibly get a reverse mortgage. I am not sure how that would work if you are behind on payments. I know a good lender that does them. Contact me if you would like her information or talk to someone who does reverse mortgages to see if it is an option.
  • October 13 2010
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The best option would have been for you prior to 5 months ago was to talk to  your lender about refinancing  your loan but now that you have missed 5 payments, your best option is to sell your home if you can't pay your mortgage because of your financial situation. You should still contact your lender to see if the first option can be work out but then you have to make that phone call.

If you need further help, contact me!

  • October 15 2010
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If you are over 62, you may qualify for a reverse mortgage. Credit and payment history are not required with this mortgage. 
  • October 17 2010
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sell your home immediately. If you let this go to foreclosure, you risk a very poor sale price and a smorgasbord of additional charges and fees.

Sell your home six months ago, before you were racking up late fees and penalties.
  • October 17 2010
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Sell and buy something you can buy cash then you will be free. Very simple.

  • October 17 2010
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You only have the equity when you cash out...sell the home.....being behind on payments would be a problem as well
  • October 17 2010
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Profile picture for Mills Realty
Your scenario makes not sense...how would you pay off your home if you take out a new loan against it?  If you are 5-months behind then you need to sell the home NOW, take the equity and either rent or buy something you can comfortably afford.  You are in a much different position than most people that are losing their homes...you actually have something to lose!
  • October 20 2010
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The majority of banks require for you to have made your last 12 payments on time to be able to refinance. But even if you weren't late and did take out $200,000 against your home you wouldn't actually own it free and clear as you'd still owe the $200,000. My suggestion is to list it now!! Especially if you have a received Notice of Default or Notice of Sale from your bank as this means they're not messing around and you don't want to let that $200,000 in equity to get away!!
  • October 20 2010
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First I will assume you are under 62 and do not qualify for a reverse mortgage.  Your options from there are :  1) hard money lender for cash out to reinstate your mortgage.  Doesn't seem to make sense unless your hardship was temporary and curable.  2). file bankruptcy and reinstate your home on a forebearance, 3).  List your home immediately and sell asap to get the equity out and start your life over and 4). contact NACA (www.naca.org) to see if they can facilitate a modification of your mortgage.

First and foremost you need to understand that you are in serious risk of foreclosure.  A bank may be willing to drag their feet on a property that is underwater.  But you are at risk of losing your equity unless you take action.
  • October 20 2010
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  • September 29 2012
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Profile picture for sunnyview
Yucky icko! Hard money spam on a 3 year old thread on a Sunday morning. Deploying buckets...
  • September 30 2012
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