How can we pay for negative equity and real estate fees on our house at sale with very little cash on hand?
Answer:
By negative equity, I think you mean that the sale price you would receive will not cover the mortgage amount. Adding in other real estate costs of selling, you think your loss will be about $30,000. There are no "negative equity" loan programs that would cover this specific loss. The money you need is just commonly known as "taking a hit in the real estate market." It's time to trim your expenses and increase your cash on hand as much as possible.
You could try a signature loan at your bank or credit union, or perhaps your current mortgage company could offer favorable terms, but one of the most common lenders in situations like this would be a friend, a family member, or a relative. Is there anyone in your family, or circle of friends you could approach for a loan of this type?
Once you move, you may want to rent for a while in order to save up some money towards your next house, and repay the loan you've taken out. If you wait a certain length of time (2 years, I think) to buy your next house, you will qualify for low downpayment, 1st time home buyer programs once again. That 2 year wait might also give the real estate market time to bottom out, so you can buy at the low point, rather than at a time when prices are still dropping. Learn as much as you can about the market in the area where you want to move, and make your best judgement as to the best time to buy.
Can you borrow against a life insurance policy, or a retirement plan at work?
The Realtor's commission on the home you are selling is negotiable, and it's sometimes possible to make payments towards their fees. For example, it could be better for them to receive a 7% commission over time, rather than 5% in a lump sum, or no commission at all if you decide you can't afford to sell right now. Write the structured commission agreement into the listing contract so there is no misunderstanding of terms later on. And have an attorney check the wording before you sign.
Other possibilities to help cover the negative $30,000 would be to sell something else you own. Perhaps someone in your family would buy your living room set, or bedroom set, or maybe your boat, or jewelry you own. A credit union may make an auto loan on your car, or motorcycle. Or, maybe you could sell it outright and purchase a less expensive one. Furniture, kitchen appliances, and anything else of this nature in the home can be sold separately for extra cash. If the drapes are custom made, you can ask for extra money separate from the sale price of the home (This is called chattel, and your Realtor can help you with this). If you have mature palm trees or fruit trees on the property maybe it would be possible to sell them before you list and start showing the property.
Good luck on your circumstances, and good luck on your move.
Maybe a signature loan at your bank? There aren't any mortgage products for what you are asking.
Rick Lanicek
www.homepropertysolutions.com
I think a personal loan from a bank is the only way to go. Just remember that it will be counted as a debt when you apply for a loan on your next house house.
Other ideas:
Do you have IRA's or Mutual funds to withdraw money from? Can you borrow against a life insurance policy?
If you're in Orange, Riverside or San Diego County, contact me and I'll help you out. As someone stated, there is no loan out there for you, except for personal loans. However, all I need is your address and I can run the numbers and I'll see what your options are.
I just helped another person in the same situation as you and I can help you as well.
Regards
If you are over 62 years old you can use a reverse mortgage to purchase the home
The answers post by the user, for information only, BAnswer.com does not guarantee the right.
Other Questions and Answers: