Any ideas as of best way to deal with mortgage in a vacant house?
Getting rid of my mortgage payment without hurting the credit that much?
"What would you do in my situation?"
I bought a house in 2005 for 160K, fully financed.
I bought a car few months later for 20K (my fully paid one broke and I needed a new one which represented more monthly payments out of pocket). Additionally I paid for the landscape, gutters, electrical outlets and central air conditioning after I bought the house, a total of 10K from my pocket that made me place more debt on the credit cards.
So, I started with a mortgage payment of 1K per month, then increased credit card payments while doing all the improvements in the house, and then got a car loan, so in mid 2007 I needed to refinance, and out of the refinancing I paid the credit cards and the car all on escrow without having a penny coming to my pocket . My house got appreciated for 270K at the time, and I took a loan for 190K (for what I pay ,200 monthly).
In 2008 went to another state, my house is vacant and for sale for some months now, if an appraiser comes will appraise it for 210K, although no buyer is ready for more than 195K and obviously I won’t be able to pay the realtor commissions if I sell at that price considering I owe 190K and that the commissions are of 6% on top of that. My contract anyways is about to expire. I am current in all the mortgage payments.
Since renting in one state and paying mortgage, gardener, insurance, services in the other is becoming quite a burden, I was looking into options, such as a Small Sale. I know that some debt relief was approved later but I don’t find anything on the IRS website, all I find is what was passed in 2007/ I want to know which options I have. I really do not care about my empty/vacant house, I care about my credit. If I rent it I will get about 0 a month (this is after paying the property manager fees, the house is located on the toughest hit by the bubble burst city of the country, so there are not any more movers in line to buy/rent), so I need suggestions as of what could I do. For instance, is there any possible negotiation with the bank to stop the payments for 6 months? This way it will let me try to sell by owner with the help of some local friends.
Both states are non-recourse states. I do not reckon buying will be a excellent option at this time, I do not know how the taxes will affect my situation, I just need some thoughts.
How do I small sale the house? and then am I responsible for paying for the taxes and how is that calculated (you have all my numbers there). Does the appraisal value at the time of sale play any role on the taxes or forgiveness of taxes?
Please advise,
Thank you!
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Tags: amp, bubble burst, Car Loan, central air conditioning, credit card payments, credit cards, debt relief, electrical outlets, escrow, gardener, gutters, improvements, insurance services, irs, mortgage payment, mortgage payments, movers, quot, realtor commissions, refinancing
no worries. many seller’s are in your same situation. contact a local realtor who is familiar with small sales. They will list your home about 80-85% market value and is sure to bring an offer. Be pro-active and contact your lender to request a small sale package. They will mail or fax this to you. Your small sale agent will negotiate with the loss mitigation negotiator and get the offer accepted. Within 3 weeks you could have your home closed. In essence, your lender will pay the commission to the listing agent and the buyer’s agent. YOU will need to net ZERO dollars at closing. Of course you will have a loss, the lender will send you a 1099 for the loss that you report on your next tax return as earned income. Your credit will be saved and it will say "settled." Excellent Luck.