Close

See current mortgage rates on Zillow Mortgage Marketplace

Profile picture for jessemayfield

What is the best way to get out of an upside down mortgage on a 2nd home without hurting my credit?

I have a 2nd home that is worth less than what I owe. I am currently renting the home, but would like to get out of it. What can you suggest
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010 - Algonquin
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (16)

I'd sit tight and keep it rented. Prices are starting to climb in many cities...
Otherwise, just write a check at closing.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 26 2010
Short sale would offer you the the least costly solution to your finances & least damaging to your credit. Consult an agent that has done many short sales with your specific lender on your 2nd home. Consider all the draw backs to a short sale and if it makes sense as a solution then do it. Values are not going up for another 10 years in most US markets. No one wants a leaky boat. Good Luck
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
There is no best way. Like mentioned, the only way to do it without hurting your credit is to bring your checkbook and cut a check for the amount you're upside down. The other options (short sale, deed in lieu of foreclosure or foreclosure) ARE going to hurt your credit. There's no two ways about it. There are varying degrees of how bad it's going to hurt, but it'll hurt nonetheless. If you don't have the capital to make up the difference, continuing to rent the home is your best bet.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
a possible thought might be to owner finance it, or a lease option.
 i am owner financing one of my properties on a two year balloon amortized over 30 years. with enough down and helping somebody re estblish their credit it;'s a win win for both parties. thats a good deal when both people win.  I would like to know more of the specifics and answer any more queations you may have.  Good luck
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
Amazes me..."If you can't rent the property".....
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
If you can't rent the propperty or refinance it to a positive cash flow state them your only option is to short sell the property. Contact a competent short sale Broker and get it sold, make sure they negotiate for a satisfaction iof the mortgage, not just a release.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
Not sure I understand your problem....... unless you are forced to sell the property how are you upside down?  In today's environment millions of homeowners may have a  mortgage balance that exceeds current value, but that is not cause to resort to defaulting. For the really unfortunate owners that have suffered a job lose or serious health issues affecting income, they may not have any options but to pursue short sales, deed in lieu of foreclosure, or face foreclosure. For the others that qualify for a modification, that is a viable option. Short of ruining their credit for years, others may want to hang in there as markets do change. I occasionally read on this thread about someone mentioning that some markets may never come back, so why not just walk away.  That seems to be reckless advice knowing the disasterous consequence that begin for someone else when first mortgage payment is missed...... my advice is to keep your tenant happy and hang in there....
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
Then why suggest to try renting a property that is rented?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
Andrew: These are simply "big picture" answers/options, and yes I do read them...
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010


"I am currently renting the Home"

1. "
try renting the home " -Jim
2. "Have you considered renting " -Clarence

Seriously do folks even read the Op's Question?

You will be hard pressed (I don't see how it would be possible) to find away other than bringing funds to closing to get out of the home without impacting your credit.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
Jesse,

This is aquestion being repeated far to often these days. There are howver a few things you might be able to do.

First: try renting the home to make it through these rough times. Even if you have to throw some dollars at it monthly, it might be well worth in in the long term.

second: Like mentioned in another contributors reply. You might try to complete a deed in lieu with your lender.However, should you decide this route, make sure there is NOT a deficiency attached to the transaction.

finally: You might simply contact your lender and work out a differnt term on your current mortgage.

Whatever you do, it will most likely be uncomfortable for you in the short term. So, if at all possible, try to make this a long term decision... You will be glad tou did.

Best of luck to you, Jim
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
The only way to get out of the house without hurting your credit it is to sell the home. Do you have a relative or friend that may want to purchase the home? Have you considered renting it to a family member or friend?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
Profile picture for wetdawgs

The only way to get out of the house without hurting your credit it is to sell it for whatever you can get, and bring a check to closing to make up the difference between sales price and what you owe.

While some recommend a short sale, be aware there are qualifications for a short sale.   You have to have had some sort of hardship (and merely being underwater is not considered a hardship).    Death, divorce, medical issues, loss of employment may be considered.  

As this home is being rented, it is likely you have other assets so even harder to qualify for a short sale.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
There are several resources available to you.  Start with talking to a reputable lender who may offer help you were not aware of.  If I may suggest, Derek Hedlund, Senior Mortgage Consultant, there may be creative ways for you to address your problem. His phone number is 847-783-6186.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
Short Sale is the probably the best way to go.  Call an agent that has experience in Short Sales.  Right now there are also some agents that are working as a team with a team of lawyers.  Your credit might be hit, but not as bad as a foreclosure and deed in lieu.  Also there is also a gray area about having a foreclosure that may cause you problems in the future.  There is often a box on employment applications etc. that ask if you have ever had a foreclosure.   Protecting yourself is a high priority. Good Luck.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
You face the same problem that millions of people have faced and many more will face in the next 1-3 years depending on where you are located and what you have.
There really is no way to get out of it without hurting your credit. If you cannot continue renting until things pick up then either try a deed in lieu which gives the bank the property easiest or you are stuck with a short sale or foreclosure.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
 
Related Questions
MY 1st home,fee worries
Profile picture for Barb Lanis
Latest answer by Barb Lanis
4 days ago | 3 answers
Help with pre-approval - want to downsize now.
if I have a mortgage but also a home equity line of credit can I combine the two into one mortgage
Profile picture for Debra (Debbie) Rose
Latest answer by Debra (Debbie) Rose
November 28 2011 | 7 answers
  • Asked by rhondalayne
  • In Refinance
  • November 18 2011
What is the best way to get out of an upside down mortgage on a 2nd home without hurting my credit?
Profile picture for Bob Brandt
Latest answer by Bob Brandt
November 26 2010 | 16 answers
  • Asked by jessemayfield
  • In Mortgage
  • November 22 2010
I need loan bad. My credit is bad. Have a $170000 rental house thats paid for. Need to repair home $
Profile picture for Christopher Kringle
Latest answer by Christopher Kringle
December 05 2009 | 14 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 8116 White Oaks Rd, Wonder Lake, IL Home For Sale
    8116 White Oaks Rd, Wonder Lake, IL 60097

     For Sale: $420,000

    • Beds: 3
    • Sqft: 1700
    • Baths: --
    • Lot: --
  2. 607 S Broadway St, Mchenry, IL Home For Sale
    607 S Broadway St, Mchenry, IL 60050

     For Sale: $165,000

    • Beds: 4
    • Sqft: 1240
    • Baths: 2.1
    • Lot: 9147
  3. 5563 Danbury Cir, Lake In The Hills, IL Home For Sale
    5563 Danbury Cir, Lake In The Hills, IL 60156

     For Sale: $250,000

    • Beds: 3
    • Sqft: 1700
    • Baths: 2.5
    • Lot: 7150