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waterspout4
My loves
Member since 5/06 19150 total posts
Name:
Kelly
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Can someone please explain realty/mortgage stuff to me?
We bought a co-op a few years ago as a starter home. We would love to make the transition to a real house with prices so low, but are afraid of what our co-op will sell for. (IF it will sell.) Many in our area are going for MUCH lower than they were just a few years ago.
My questions are: (I will use simple numbers to just get my point out.)
If we took out a mortgage for 300, but only sell for 200, do we owe the bank 100?
Can you take out two mortgages? How do you buy one place as you are selling another?
We will need another massive down payment won't we? 
Thanks! I am really stupid on this point.
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Posted 1/29/10 9:50 AM  |
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HeatherRose
Life is Good :)
Member since 11/07 6605 total posts
Name:
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Re: Can someone please explain realty/mortgage stuff to me?
if you bought for 300 and still owe say 275 and sell for 200 you would have to go through a short sale which means the bank would allow you to settle your mortgage with them for less then you owe. Its really not the a great thing, but if you HAVE to get out, it would be the best route. The bank has to apporveit first, I don't think you can just do that.
It doesn't hurt your credit as much as a bankrupcy, but its not really a good thing to do unless you have too. So if you plan on buying another place right away, it could be an issue.
unless you can come up with the differnce and pay off the bank.
Message edited 1/29/2010 10:29:56 AM.
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| Posted 1/29/10 10:28 AM |
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dapnkap
Our 3 angels
Member since 7/07 4824 total posts
Name:
Karen
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Re: Can someone please explain realty/mortgage stuff to me?
Hi,
Yes, if you sell your place for less than you owe, you need to pay the difference.
You can get a bridge loan mortgage, but I think they are only good for 60 or 90 days.
Bridge Loan
In this market, you would really need to sell your place first, before buying something new.
Yes, you'll need to put down 20% for your new place (to avoid PMI) and I think borrowing more than $417K is a jumbo mortgage (with higher rates)
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| Posted 1/29/10 10:42 AM |
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Cheeks24
Living a dream
Member since 1/08 8589 total posts
Name:
Cheeks
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Re: Can someone please explain realty/mortgage stuff to me?
If the other co-ops are selling for less it could also be that they haven't had any upgrades done to them. If yours has, then it's definitely worth more money.
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| Posted 1/29/10 10:58 AM |
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Salason
♥
Member since 6/05 9878 total posts
Name:
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Re: Can someone please explain realty/mortgage stuff to me?
Posted by dapnkap
Yes, you'll need to put down 20% for your new place (to avoid PMI) and I think borrowing more than $417K is a jumbo mortgage (with higher rates)
They raised the conforming loan limits so you're not a jumbo in NY unless you're above $729k now. Over $417k is high balance conforming but the rate is only about 0.25% higher than conforming rates rather than jumbo rates which are much higher.
ETA: to answer original post, yes you'd have to come up with the difference. Even if you do a short sale, you have to be very careful to clarify that they cant come after you with a deficiency judgement (states laws very but I think NY permits this  )
Message edited 1/29/2010 11:17:51 AM.
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| Posted 1/29/10 11:03 AM |
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Deeluvsvinny
DONE
Member since 10/08 4952 total posts
Name:
Whatever
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Re: Can someone please explain realty/mortgage stuff to me?
Posted by waterspout4
We bought a co-op a few years ago as a starter home. We would love to make the transition to a real house with prices so low, but are afraid of what our co-op will sell for. (IF it will sell.) Many in our area are going for MUCH lower than they were just a few years ago.
My questions are: (I will use simple numbers to just get my point out.)
If we took out a mortgage for 300, but only sell for 200, do we owe the bank 100?
Can you take out two mortgages? How do you buy one place as you are selling another?
We will need another massive down payment won't we?
Thanks! I am really stupid on this point.
You took a mortgage for 300..how much is left on it? That's what you owe the bank..not the full 300 you took originally...
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| Posted 1/29/10 11:12 AM |
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maybesoon
LIF Adult
Member since 9/09 5981 total posts
Name:
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Re: Can someone please explain realty/mortgage stuff to me?
is there any way you can rent out your coop? We have a simlar same situation, condo to sell but the price didn't go up as much as we though it would . we did manage to save the $ for a downpment, so we would like to rent out the coop for 3-5 years then hopefully get a good amount of $ when we sell. is this feasible for you?
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| Posted 1/29/10 11:24 AM |
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Re: Can someone please explain realty/mortgage stuff to me?
If your BALANCE is 300, and you sell for 200, you will owe the bank 100 UNLESS you can negiotiate a short sale with them (not the best for your credit, and you'd have to check with the managing agent to see what their procedures for this are.)
As for buying at the same time as selling, your down payment depends on you, really. What you can qualify for and how much you WANT to put down...to avoid any mortgage insurance, you need 20% down. BUT...there are conventional and FHA mortgages out there that require as little as 3.5% down...
The biggest thing you'd need to be wary of is whether the person FROM whom you're purchasing would allow you to put a clause in, subjecting that purchase to the sale of your co-op....some won't do that...
FM me if you want more info / help / mortgage info...
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| Posted 1/29/10 1:24 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Can someone please explain realty/mortgage stuff to me?
Posted by HeatherRose
if you bought for 300 and still owe say 275 and sell for 200 you would have to go through a short sale which means the bank would allow you to settle your mortgage with them for less then you owe. Its really not the a great thing, but if you HAVE to get out, it would be the best route. The bank has to apporveit first, I don't think you can just do that.
It doesn't hurt your credit as much as a bankrupcy, but its not really a good thing to do unless you have too. So if you plan on buying another place right away, it could be an issue.
unless you can come up with the differnce and pay off the bank.
You would also need a hardship and documentation proving you can't afford the house- history of lates, denial of modification etc
Your credit takes a hit- but it doesnkt show for 7 years as foreclosure
I really don't think this is an option for you
I think renting would be your best bet- but if you are upside on the co-op - meaning you owe more then it's worth you become a mortgage risk b/c some people have bought other houses with the intention of foreclosing on the first one
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| Posted 1/29/10 2:33 PM |
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waterspout4
My loves
Member since 5/06 19150 total posts
Name:
Kelly
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Re: Can someone please explain realty/mortgage stuff to me?
Posted by maybesoon
is there any way you can rent out your coop? We have a simlar same situation, condo to sell but the price didn't go up as much as we though it would . we did manage to save the $ for a downpment, so we would like to rent out the coop for 3-5 years then hopefully get a good amount of $ when we sell. is this feasible for you?
We thought about that, but can't imagine anybody paying enough to rent it to cover the mortgage and the maintenence. I have to ask others in the area what they are renting for.
We have had some work done, but not enough to really make a difference.
But if we are renting the co-op out, doesn't that still mean we have to take out a second mortgage for the new home? How do you do that?  (ie: have 300 in co-op mortgage and then 500 in home mortgage? Who would give 800 to us?)
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| Posted 1/30/10 2:46 AM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Can someone please explain realty/mortgage stuff to me?
As far as getting 2 mortgages- the rent you get on the co-op counts as income (75% of it)
So of you rent it for $1000 you add $750 to your income
You should really sit down with a local realtor and a mortgage banker to see if this is feasible
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| Posted 1/30/10 8:12 AM |
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waterspout4
My loves
Member since 5/06 19150 total posts
Name:
Kelly
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Re: Can someone please explain realty/mortgage stuff to me?
Posted by Beth
As far as getting 2 mortgages- the rent you get on the co-op counts as income (75% of it)
So of you rent it for $1000 you add $750 to your income
You should really sit down with a local realtor and a mortgage banker to see if this is feasible
I do plan on meeting with a realtor. I jst wanted to get some thoughts on it, since we are both clueless. Our realtor is no longer in the business, so we have to start from scratch.
Thanks everyone!
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| Posted 1/30/10 9:38 AM |
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rose825
Best Friends
Member since 6/05 10228 total posts
Name:
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Re: Can someone please explain realty/mortgage stuff to me?
Posted by Beth
As far as getting 2 mortgages- the rent you get on the co-op counts as income (75% of it)
So of you rent it for $1000 you add $750 to your income
You should really sit down with a local realtor and a mortgage banker to see if this is feasible
I was recently told that this changed in the last few months and you have to show a 2 year history of rent to count it as income
You can get a second mortgage, if your income, debt, and credit are good and they think you can carry the 2 mortgages.
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| Posted 1/31/10 10:36 AM |
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