Short Selling Your Home More Beneficial Than A Loan Modification When Facing Foreclosure

admin — Thu, 23 Jul 2009 19:08:23 +0000

Don’t we all love the home we live in? Our kids are in established schools, we have lots of memories in the house, we love our neighbors, and we’ve redecorated. The list goes on. But were facing financial difficulties – perhaps facing foreclosure? But moving would be very hard. It disrupts a family’s life. Letting our neighbors know that we are facing financial difficulty would also be really hard.

When your house is upside down it may be years to recuperate the equity, and mortgage payments that you make make little dent in the negative equity situation. Many homes in San Diego where we work have upwards of $200,000 in negative equity. For example a home bought in 2007 for $400,000 is now worth only about $200,000.

Lets do the math. Your house is in San Diego, California and your loan is for $400,000. It was originated in July of 2007 when you bought your house in Carlsbad, California at a 6.5% fully amortizing rate (meaning you are paying down the loan). If it is a 30 year loan you will pay $510,177 in interest alone for the loan when it pays off in 2037. This coupled with paying all the principal would cost you $910,177 to payoff the loan. That’s a lot of money! If you needed to sell the house before the paydown of the loan to sell it at today’s price in San Diego you wouldn’t be able to do that until 2027 – that’s 18 years from now! Hopefully prices will go up in San Diego in 18 years, but what if you needed to sell in 5 years? In 5 years you would still owe $365,000 ” that $162,000 in negative equity to be made up in a very short period of time.

What if lenders are not granting short sales at that time? You will still not have made any money on that house, you will have paid out $30,339 in interest and principal – AND YOU WILL GET NONE OF IT BACK. The bank still might take your home.

So lets look at the scenario where you got out today in a short sale, and bought another house in 1 year, which is possible if you are aggressive with your credit repair. Sell the house for $200,000 ” thats $200,000 forgiven. Expect a credit hit, but in one year houses will still be dirt cheap. In San Diego houses are still experiencing a decline in prices. So say in one year that house is now worth $175,000 and you buy a similar one in the same neighborhood with 10% down. Your loan would be $157,500. For comparison sake lets assume the interest is 6.5%, fully amortizing for 30 years. Your total interest paid for the life of the loan would only be $200,244. To pay off the entire loan over 30 years you would end up paying $357,244. That’s a savings of $552,993.00 – a half a million dollars!

So lets look at the scenario where you got out today in a short sale, and bought another house in 1 year, which is possible if you are aggressive with your credit repair.

In San Diego houses are still experiencing a decline in prices. So perhaps in one year that house is now worth $175,000 and you buy a similar one in the same neighborhood with 10% down. Your loan would be $157,500. Let’s assume the loan’s interest is 6.5%, and is fully amortizing for 30 years. Your total interest paid for the life of the loan would only be $200,244. To pay off the entire loan over 30 years you would end up paying $357,244. That’s a savings of $552,993.00 of a half a million dollars! ($910K-$357K)

So by moving on, particularly if you are facing a financial difficulty, you will not only get out of your negative equity situation (and essentially be losing money), but you will save over $500,000 by getting out and getting back in. What would you do with that money? Pay for college education for your kids? Save up for retirement? Pay off other debts? Let me ask you, does it financially make sense to stay in the home? I know you love it, but separate out the emotions from the finances. What ultimately will be better for you?

Sell Your Hawaii House Fast In This Market

admin — Thu, 23 Jul 2009 18:51:05 +0000

Let’s face it, houses are not selling here in Hawaii at the same clip they were two years ago. The boom is gone. Now what? Rents have gone in the toilet so homeowners attempting to make money in the interim is shot. We are seeing homeowners drop their listing prices on their houses in hopes to lure a new buyer, but, even then, how many new buyers can actually qualify for a new loan? What are local Hawaii homeowners looking to sell their properties fast supposed to do?

So, what is the answer for these people? For most, their Realtor tell them to continually drop the price until a buyer comes along but, is this the best solution? If you think about it, more often that not, price is not the issue. It is simply a matter that most people cannot obtain loans with the shakeout in the lending industry.

IBuyHousesHawaii.com is the only real source in Honolulu, Hawaii in purchasing houses throughout the state of Hawaii regardless of condition or price. With their “Hawaii Seller’s Assistance Program” this company can offer several creative solutions to homeowner’s that are wishing to sell their property.

“We bought a property for $376,000, that is actually worth $219,000 in our current market here in Hawaii. Sounds crazy, doesn’t it? The owner was quoted in a recent interview. “We believe in creating only win-win scenarios for our sellers, Hawaii residents insist on it” He also commented that the secret is that they buy the property with agreeing to terms and/or price, whichever the owners can be flexible on.

IBuyHousesHawaii.com currently can only handle purchasing up to five properties here in Hawaii each month, though they are staffing up to accommodate more. There is obviously a real need for their services in our local and current economy here in Hawaii.

Any Hawaii resident will tell you, that our market is not turning for the better in the near future. The question is, what will you do if you really want to sell your house fast here in Hawaii? I suggest you contact IBuyHousesHawaii.com and see if they can work with you.

Home Mortgage and Refinancing » loan mod

Short Selling Your Home More Beneficial Than A Loan Modification When Facing Foreclosure

Sell Your Hawaii House Fast In This Market