Short sale/Foreclosure/Wait & See --- Advice needed

We want out of our current home BADLY for a number of reaons. My DH owes $220,000 on the mortgage. And he has a home equity line of credit thru HSBC for $40,000. Total about $260,000

We want to sell BUT the listing agent(s) we have met with think we will likely sell for around $249,00... Even IF we get a higher offer, they believe this is around what the house will appraise for. (Gotta love this crappy market...when my DH got the line of credit the house appraised for $360,000)

Sooo...after we pay the mortgage and the equity loan and closing costs, etc, we are looking at paying about $26,000 OUT OF POCKET to get out from under this house. ($10,000 to pay off line of credit and about $16,000 in closing costs, relaotor fees, etc.) We don't even have that much in savings!


Now this is the thing he bought the house before we met. He got the loean before we were married as well. I am not on either loan. I can qualify for a decent mortgage on my own. My DH thinks he should short sale or let foreclosure happen and I should buy a house for us in the meantime just in my name. Thoughts or advice anybody please? Or any other suggestios for hoe we can get out from under this house and into a new one? Thanks if you read this far and double thanks if you have any advice for me.

Re: Short sale/Foreclosure/Wait & See --- Advice needed

the worst thing you can do is let the foreclosure happen

the bank will come over you for about double what you owe now

the best option is to cover the shortage

if that isn't possible I would short sale it- the government is giving sellers till the end of the year to be forgiven of the balance tax wise

the bank will forgive the balance to them

you can move on in peace and harmony- not waiting for the shierf to knock on the door

FM me with any direct questions- I have done many short sales

Re: Short sale/Foreclosure/Wait & See --- Advice needed

I think you have to figure out if your husband would qualify for a short sale. You said you want out of the home for many reasons.... Typically, you need to be able to show that you've had some change in circumstances/financial hardship that makes it impossible for you to afford the mortgage (or will make it impossible in the near future). It doesn't sound like that's the case, if you can afford to buy a home on your own. I know that you are not on the mortgage of your husband's house, but you contribute to the household income.

I think if you really want to move now, the best option for you would be to rent your current home (the one your husband owns) and buy a new home. That way, you have income coming in from the tenant that can hopefully cover all or most of the mortgage on the first house. And if you hate being a landlord and decide to sell in a year or so, perhaps the market will be better and you will have saved more money, making it less of a shortfall (less money you need to bring to closing).

I had a short sale listing last year where the sellers weren't the best qualified for a short salek (they had decreased income/job loss, but could still make the mortgage payments). They wound up renting their existing home and moving to a new place, and it worked out great for them!

Re: Short sale/Foreclosure/Wait & See --- Advice needed

I am not an expert, but if you don't have the 26K in savings to cover the HEL and closing costs/commission I'm not sure that you would be approved for a mortgage?

Maybe someone in the loan industry would be able to say better what % you need to put down, closing costs and what the bank wants you to have in your account after closing.