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Mortgage Question (on selling a house)

Discussion in 'Off Topic' started by FullCaliberII, Aug 24, 2012.

  1. FullCaliberII

    FullCaliberII Pierce County, WA Active Member

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    Well this has nothing to do with guns but a lot to do with my future plans. Hope someone out here has a solid answer for me.
    I want to sell my house but with this lovely housing market I do not stand a chance at breaking even. I have no trouble paying my monthly mortgage so I do not qualify for any type of short sale or government assistance program. I owe approximately $210,000 but around here my house would probably sell for $175,000 I think.
    My main question: what happens to the remaining debt if I sell the house? Do I need to get a personal loan for the remaing $40,000 or does the mortgage co. automatically turn the balance into a regular loan? If I want to buy a house at the same time I sell, can I roll the remaining balance from the house I sell into the house I buy?
    If this information matters- this is my first and only mortgage (Wells Fargo). I refinaced once about 1 1/2 years ago and bought it in 2008. I have not missed a mortgage payment and I live in WA.
    Thanks for any information. Hard to gather answers online rights now as everything I found only relates to a "short-sale".
     
  2. joken

    joken Corvallis Bronze Supporter Bronze Supporter

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    If you sell it for less than you owe, you have to choke up the difference. How about keeping it as a rental at least until the market turns around. Refinance it if you have to and you should be able to get enough rent that it will pay for itself. This option might not be reasonable if you are moving away from the area.
     
  3. FullCaliberII

    FullCaliberII Pierce County, WA Active Member

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    Renting it is the backup plan :) I've heard endless horror stories about people renting out their houses only to get a bad renter in the house who ruins it and then fails to pay rent. Up here it sounds like evicting the non-paying renter can take months and plently of legal work...
     
  4. nick1980

    nick1980 Portland, OR Active Member

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    I'm a realtor in Oregon and I know here you would be fine and the bank would eat the remaining from the short sale. Not sure about WA talk to a local realtor and they should help you out. Again I know for a fact that in OR they can not force you to pay the difference or you would just let it foreclose and the bank loses even more.
     
  5. TCOV

    TCOV OLYMPIC PENINSULA Active Member

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    Instead of asking real estate questions on a gunforum you need to have a meeting with your bank. They will discuss your options.
     
  6. slimer13

    slimer13 Deer Park Well-Known Member

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    Have a rental management company handle it. They do background checks etc and usually charge 10% of the rent.
     
  7. CJ1089

    CJ1089 Aloha, Oregon Marveling at the world.

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    Why would you let a bank advise you about the best course of action. They will tell you to pay the loan and wait it out.

    OBTW, selling for less than the current first mortgage balance is a "short sale". You are on the hook for the difference and if the bank writes off difference as a loss then you must pay taxes on that amount like it was a Christmas bonus from your employer.

    As far as renting, while not a realtor, I am a landlord for the last 20 years. For some free advice on renting out, pm me. It ain't as bad as you think if you are the right type. If you are a soft touch who won't hold to the terms of your own contracts then stay far, far away from this.
     
  8. Burt Gummer

    Burt Gummer Portland Completely Out of Ammo

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    Sell it, take whatever hit you have to, the market will not be getting significantly better at all.

    Think of it this way. Houses barely sell at 3.75% interest. What do you think housing prices are going to be like when the guaranteed inflation kicks in and you are trying to sell at 13%?

    Housing, and especially commercial real estate, are not even close to the lows that are coming.

    The smart move is to sell and lease/rent. Put the ego of 'owning your own home' behind you. That is one of the cheerleading themes of the banksters. Whatever they want you to do, do the opposite.

    I practiced what I preached this week and sold a condo for cash which will be converted to real goods, PMs, etc. The only thing worse than owning real estate is fiat funny money.

    There is nothing more liberating than having no debt and being fully aware of the banksters are up to, and planning accordingly.