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Need advise about first home when second home is under construction

Hello all experts.

I own a townhome in Richardson, TX and in process of building another home in Allen, tx which I should possess in Jan 2013. The reason since we are planning on expanding our family + low interest rates.

I did put my current home on the market for sale but after 120 days of no concrete offer decided to take it off the market.  Also my understanding is the longer the home is on market provides it offers ppl with greater negotiation leverage. Not sure if this was good move by anyways decided to go this route.

My next move is to put home as rental since the house is in great location and based on subdiv renting history shows a positive trend.  What I would like to do next is put forward different thoughts and would appreciate all you experts to provide your feedback if any.

1) If I decide to go renting route what type of lease should I offer? Should I do a lease to own? Any other rental instrument options??

2)  Post moving to new home if I  realize renting isn't my cup of tea ....so would absolutely prefer to get rid of home but because selling isn't producing the results so what if I decide to do a short sale. My second home will be a homestead so it will be protected from creditors and since first home is indeed underwater (owe more than comps) will bank agree to short sale? What kind of tax implication am I looking at in 2013? Will the forgiven amount be taxed?? Anything else I need to know?? Can bank go after my financial assest (based on what I provided during loan app)??

3)    Post moving to new home, one option is a refi on first mortgage to lower payment. Is this a good move?? Is there any loan modification possible on first home mortgage?? Or any other refi option available to lower my first home loan??

Any advise would be appreciate and if i am overlooking any kind of relief applicable pls do add.

Thanks,
  • November 13 2012 - Richardson
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Answers (1)

1. Lease to owns can be attractive to some people, so you can offer it up if you like...but it is a "scary" thing for most tenants.  If all you want is cash-flow I would rent it out, and after the tenant moves in, pays rent on time for a year or so, you could verbally mention you would entertain the idea of doing a rent-to-own if THEY want to pursue that.  This is how I would go about it, personally.

2. From what I have seen in my short-sale dealings the seller usually needed a genuine hardship to move forward with the short sale in MOST cases.  In all but one of my short sales they asked for tax returns, bank statements, etc to verify it as well. For your tax question, consult your tax professional--I would consult a CPA if you don't already use one.

3. Most loan mod scenarios I have encountered were all owner-occupied, and they were a requirement as well...but again, perhaps there are exceptions that I haven't run into because that scenario hasn't landed on my desk yet. Loan mods also typically require a hardship as well.

Sorry I couldn't be more useful, but I hope there is some value in what I've written for you.  Also one more thing, your success with your short sale will also depend on what kind of loan product you have on the asset now...if you had an FHA loan...jeeze, just be ready to be frustrated...also kiss your chance at ever getting another FHA loan goodbye as things stand today.  

Best wishes from So-Cal and good luck
  • November 13 2012
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