I currently own a home and make my monthly payments without any problem. My wife and I make nearly 50 thousand more a year then when we orginally purchased our Home. Unfortunatley the housing market has crashed and I have no equity in my home and my mortgage is probably more than what my house is worth. I need a bigger home. What options do I have?
1) Pay down your existing Mortgage until it’s less than the (then current) house value … this is better than saving (unless, by some miracle, you can make more interest on your savings (after Tax) than you are paying interest on the mortgage = in which case SAVE UP until you have enough to move).
2) Get a ‘personal loan’ to cover the different (NOT recommended .. interest rates can only go up from here)
Honestly, the only thing you can do is save your money for the down payment. If you make $50K more than before, you should be able to save all of the after tax amount.
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1) Pay down your existing Mortgage until it’s less than the (then current) house value … this is better than saving (unless, by some miracle, you can make more interest on your savings (after Tax) than you are paying interest on the mortgage = in which case SAVE UP until you have enough to move).
2) Get a ‘personal loan’ to cover the different (NOT recommended .. interest rates can only go up from here)
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I fail to see a problem here. You’re both employed, you’re not at risk of default and you’re not sure if you’re underwater, which means if you are it’s probably not by much. You’ve avoided foreclosure, insolvency, bankruptcy and all the other consequences of demanding a "bigger home", so why start making foolish decisions now? Have a garage sale and read some articles about using interior space efficiently. You’ll be fine.
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Your only option if you want to sell it is to bring the cash difference to closing.
You won’t get approval from a bank for a short-sale because your circumstances have actually improved and you want to upgrade the house.
Bank isn’t going to allow that.
I would encourage you to get an appraisal before you assume that your house is worth less…not every place and every neighborhood was hit.
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You may purchase as many houses as you are qualified to purchase. It matters not that your current property is upside down or not. There are many people that purchase a 2nd home to vacation in,so that is not a problem, purchasing another house.
What do you plan to do with the current house you own? You have a few options as what to do, you may lease, rent. Most lenders will allow a certain amount of the rent as income, normally about 75%.
You indicated that your income had increased by approximately $50,000, therefore when you apply for your new mortgage your ratios should be ok, because your current mortgage payment would be included as a debt on your credit report, thus one of the factors in determining your ratio.
When applying for your new mortgage make sure you tell your loan officer that the new house will become you primary home and the current one will become a rental. This information will lower your interest rate for your new home.
There are many things you should do, but the first thing you should do is contact a mortgage broker that does VA and FHA mortgage loans and get pre-approved. This is the first step. Once you have your pre-approval then contact a real estate agent to look at house based on what you are qualified to buy.
You will need proof of income so have available pay stubs, w-2, bank statements and other items your mortgage broker will require.
He will inform you of what is necessary once you contact him.
This pre-approval will tell you the amount of house you are qualified to purchase as well as the interest rate, monthly mortgage payments and other necessary things you need to know about your mortgage.
I hope this has been of some benefit to you, good luck.
"FIGHT ON"
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