Posted on
November 17, 2008
at
2:07 pm
Here's my situation... I own a house that is currently underwater by about $70k. I'm currently paying interest-only on a 3-year ARM which adjusts on January 2010 (13 months from now). I'm concerned that I will not be able to refinance before the adjustment date since I do not have any equity. I'm pretty sure I will not be able to afford the higher payment if it adjusts higher than what I pay now. I have always been responsible with my credit, in fact I have no lates on the mortgage or on any other debts that I owe. I have never taken cashout from my home and the only reason I'm underwater with the mortgage is because of the declining housing market. My dilemma is that the lender might now allow me short-sale or sign a deed-in-lieu since I have never been late on any of my payments ever. I'd like to get out of this situation sooner rather than later... What are my options? Thanks for your help...
Posted on
February 16, 2009
at
12:58 am
I just read that ARM are going to go up next. You might want to talk with your bank and find out from them what your options are. Given your good history with them, they may be willing to work with you.
Posted on
February 25, 2009
at
1:53 am
I would suggest a six-step plan. Step One: If you lose your house, you're not going to need all that stuff you've got stored inside it anyway - so hold a yard sale, get it on eBay, advertise it in the classifieds. Sell it off. These pointless material things are not worth a thing if you have no home to put them in. Keep the home at all costs. Step Two: Put ALL the proceeds down on your mortgage immediately. It might not be $70k, but it will reduce the amount you're underwater by. Step Three: Call your lender and switch your loan back to principal-and-interest payments immediately. Start reducing the amount you owe. Step Four: Make fortnightly (bi-weekly) payments on your mortgage and round up the payments so your lender can see you're making every effort to reduce your balance as quickly as possible. Step Five: Can you do anything to find a little extra work on weekends that will help increase your income? If your answer is yes, DO IT. Get that extra cash down on your mortgage NOW. Step Six: What can you do to increase the value of your property? I realize property prices have dropped, but there are ways to get your home valued at a higher amount if you're careful.
