When you can't afford your home
- Thread starter XtraRevsSurely
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If it's a money thing only, not health or anything else, get a renter or two in there to help alleviate some of the cost of the mortgage. This is pretty much it, the alternative is not good.
Best of luck!
Best of luck!
Originally Posted By: rshaw125
Refinance it with her. Get a 15 super low interest rate. Take in a professional person as a boarder.
(Has this mortgage been previously refinanced with cash out?)
That way your Mom has her own place and her credit is preserved.
Many condos do not permit taking in boarders.
Refinance it with her. Get a 15 super low interest rate. Take in a professional person as a boarder.
(Has this mortgage been previously refinanced with cash out?)
That way your Mom has her own place and her credit is preserved.
Many condos do not permit taking in boarders.
Kestas
Staff member
Originally Posted By: daves87rs
At her age, and as much as I hate to say it, it might just be better to walk away...
I don't believe one can easily walk away from an upside down mortgage. It's not as easy as throwing the keys back to the mortgage company.
At her age, and as much as I hate to say it, it might just be better to walk away...
I don't believe one can easily walk away from an upside down mortgage. It's not as easy as throwing the keys back to the mortgage company.
I'm not sure of the laws in your state, so don't take my advice without consulting a lawyer. Here in Las Vegas, with a situation like that, I would advise someone in that position to live in the condo as long as possible without making payments. It would take the bank over 2 years to get serious about foreclosure. Then, you could negotiate making a short sale. Add about 6 months until you are out.
Have her save the money she would have paid for the mortgage and use it to get a new place. It would make be enough for a down payment for the same type of condo in the same development. Total payment for the "new" place would be under $1k a month PITI for a 15 year note. You, or another family member would have to cosign, or even take out the loan. If that's not an option, then renting might be.
What hasn't been mentioned is her current financial status. Her income hasn't been enough to support that place for quite some time. If she has a lot of consumer debt (credit cards, signature loans, HELOC or second mortgage) then bankruptcy might be in order.
What I would advise against is selling the home and making up the difference, or her borrowing (even from family) to continue to make those high payments.
Have her save the money she would have paid for the mortgage and use it to get a new place. It would make be enough for a down payment for the same type of condo in the same development. Total payment for the "new" place would be under $1k a month PITI for a 15 year note. You, or another family member would have to cosign, or even take out the loan. If that's not an option, then renting might be.
What hasn't been mentioned is her current financial status. Her income hasn't been enough to support that place for quite some time. If she has a lot of consumer debt (credit cards, signature loans, HELOC or second mortgage) then bankruptcy might be in order.
What I would advise against is selling the home and making up the difference, or her borrowing (even from family) to continue to make those high payments.
First of all, she need a place to live, so how much is rent for not the same house but a place that she can stay in (i.e. renting a room off a widow) if she got foreclosed on? That would be the minimum expense she need to pay for.
And how much would she get if she rent out a few rooms? Will it be cheaper than renting as above? That would be the most conservative option to keep the house and weather it through the downturn, hopefully till the home price rise so she can sell it break even or make some money.
As much as I hate to say, she made a wrong choice and she may be better off walking away and rent then keep making payment on the loan. However before she is really foreclosed on stay in there without making payment. There are cases that someone just walk away and never check, but the bank didn't foreclose, so the end up owing a lot of property tax and HOA. If that process takes a year, that'll save her 1 year worth of money that would put her in better retirement.
And at her age and her spending habbit, a bad credit may be a good thing to prevent her from borrowing more money. She already has a fixed income to live on, and too late to buy a house, so she doesn't need to borrow for anything more.
And how much would she get if she rent out a few rooms? Will it be cheaper than renting as above? That would be the most conservative option to keep the house and weather it through the downturn, hopefully till the home price rise so she can sell it break even or make some money.
As much as I hate to say, she made a wrong choice and she may be better off walking away and rent then keep making payment on the loan. However before she is really foreclosed on stay in there without making payment. There are cases that someone just walk away and never check, but the bank didn't foreclose, so the end up owing a lot of property tax and HOA. If that process takes a year, that'll save her 1 year worth of money that would put her in better retirement.
And at her age and her spending habbit, a bad credit may be a good thing to prevent her from borrowing more money. She already has a fixed income to live on, and too late to buy a house, so she doesn't need to borrow for anything more.
Originally Posted By: XtraRevsSurely
My mom's mortgage payment is $1787 and she lives on $2635/month. The rest of her $848 goes to her other expenses. She's 66, retired, lives alone, and is looking for work. She owns $160k on a home that's valued around $115k max. She bought the home in 2004 on a 30 yr fixed mortage and is trying to refi. Not sure what her current rate is. She current on payments.
She has too much home and can't afford it long or short term.
What are her options? Short sale, forclosure, try to sell and owe the balance...
She's a big smoker so her home (condo) reeks so that would be turn off. She quiting smokes.
Clearly, keeping paying and try to make it work is best but I honestly don't feel she'll be able to keep up for more than 3 months. Please advise some ideas?
It sounds to me like she's an irresponsible member of society and you want to know what options there are to offload some of her liabilities onto taxpayers like me. Frankly, it bothers me a lot.
My mom's mortgage payment is $1787 and she lives on $2635/month. The rest of her $848 goes to her other expenses. She's 66, retired, lives alone, and is looking for work. She owns $160k on a home that's valued around $115k max. She bought the home in 2004 on a 30 yr fixed mortage and is trying to refi. Not sure what her current rate is. She current on payments.
She has too much home and can't afford it long or short term.
What are her options? Short sale, forclosure, try to sell and owe the balance...
She's a big smoker so her home (condo) reeks so that would be turn off. She quiting smokes.
Clearly, keeping paying and try to make it work is best but I honestly don't feel she'll be able to keep up for more than 3 months. Please advise some ideas?
It sounds to me like she's an irresponsible member of society and you want to know what options there are to offload some of her liabilities onto taxpayers like me. Frankly, it bothers me a lot.
Originally Posted By: thomasflaherty
Are we missing some thing here $1787 how much did she borrow in 2004 at what rate and what are the taxs??? alot of numbers left out of the story
Seems like me and you are the only ones who spotted this.
$1787 payment on a 30 year mortgage with a balance of $160k with 21 years to go is an interest rate above 12%.
If this is true then walk away and stick it to the bank.
And maybe, as a teacher, she could now go and learn a little about personal finance. If they taught that at schools, the country might have a brighter future.
Are we missing some thing here $1787 how much did she borrow in 2004 at what rate and what are the taxs??? alot of numbers left out of the story
Seems like me and you are the only ones who spotted this.
$1787 payment on a 30 year mortgage with a balance of $160k with 21 years to go is an interest rate above 12%.
If this is true then walk away and stick it to the bank.
And maybe, as a teacher, she could now go and learn a little about personal finance. If they taught that at schools, the country might have a brighter future.
Originally Posted By: L_Sludger
It sounds to me like she's an irresponsible member of society and you want to know what options there are to offload some of her liabilities onto taxpayers like me. Frankly, it bothers me a lot.
The bank is also clearly responsible along with the purchaser. The bank will sort it out.
It sounds to me like she's an irresponsible member of society and you want to know what options there are to offload some of her liabilities onto taxpayers like me. Frankly, it bothers me a lot.
The bank is also clearly responsible along with the purchaser. The bank will sort it out.
Originally Posted By: rjundi
Originally Posted By: L_Sludger
It sounds to me like she's an irresponsible member of society and you want to know what options there are to offload some of her liabilities onto taxpayers like me. Frankly, it bothers me a lot.
The bank is also clearly responsible along with the purchaser. The bank will sort it out.
Bank is not part of the blame game IMO. They are not there to hold your hand, they are there to provide a service.
Originally Posted By: L_Sludger
It sounds to me like she's an irresponsible member of society and you want to know what options there are to offload some of her liabilities onto taxpayers like me. Frankly, it bothers me a lot.
The bank is also clearly responsible along with the purchaser. The bank will sort it out.
Bank is not part of the blame game IMO. They are not there to hold your hand, they are there to provide a service.
Originally Posted By: FoxS
Originally Posted By: thomasflaherty
Are we missing some thing here $1787 how much did she borrow in 2004 at what rate and what are the taxs??? alot of numbers left out of the story
Seems like me and you are the only ones who spotted this.
$1787 payment on a 30 year mortgage with a balance of $160k with 21 years to go is an interest rate above 12%.
If this is true then walk away and stick it to the bank.
And maybe, as a teacher, she could now go and learn a little about personal finance. If they taught that at schools, the country might have a brighter future.
Not enough info. I asked previously if it was refi'd with cash out. I know people who did this and they wound up with a payment they could not afford. But they loved spending the cash they got at each refi.
Originally Posted By: thomasflaherty
Are we missing some thing here $1787 how much did she borrow in 2004 at what rate and what are the taxs??? alot of numbers left out of the story
Seems like me and you are the only ones who spotted this.
$1787 payment on a 30 year mortgage with a balance of $160k with 21 years to go is an interest rate above 12%.
If this is true then walk away and stick it to the bank.
And maybe, as a teacher, she could now go and learn a little about personal finance. If they taught that at schools, the country might have a brighter future.
Not enough info. I asked previously if it was refi'd with cash out. I know people who did this and they wound up with a payment they could not afford. But they loved spending the cash they got at each refi.
Its probably been discussed already but why doesn't she just rent it out.
She could find a decent apartment and hold on to this until its paid off and sell it then for some cash she may need or use it for income.
I bought a few condo's back in 86 for 23K ea cash no finance, that i have only seen a few times and have been seeing from $625 a month in the beginning to $1100 a month today.
I minus todays condo fee out at $350 a month and its still a good hunk of change.
The folks who rented them from me paid me all my cash back before 1993 so its been a good thing.
She could find a decent apartment and hold on to this until its paid off and sell it then for some cash she may need or use it for income.
I bought a few condo's back in 86 for 23K ea cash no finance, that i have only seen a few times and have been seeing from $625 a month in the beginning to $1100 a month today.
I minus todays condo fee out at $350 a month and its still a good hunk of change.
The folks who rented them from me paid me all my cash back before 1993 so its been a good thing.
Originally Posted By: Trav
Its probably been discussed already but why doesn't she just rent it out.
She could find a decent apartment and hold on to this until its paid off and sell it then for some cash she may need or use it for income.
Usually if you are up side down on a mortgage, your payment would be significantly more than if you just rent the entire place as a tenant.
Renting individual rooms usually sum up to be a significantly lower price than renting the entire place as an apartment or house.
So you can deduct that if she is paying that much in mortgage, she will get significantly less than if she just walk away and rent 1 room from someone's apartment or house, or even an entire apartment all by herself.
Originally Posted By: Bill in Utah
Originally Posted By: rjundi
Originally Posted By: L_Sludger
It sounds to me like she's an irresponsible member of society and you want to know what options there are to offload some of her liabilities onto taxpayers like me. Frankly, it bothers me a lot.
The bank is also clearly responsible along with the purchaser. The bank will sort it out.
Bank is not part of the blame game IMO. They are not there to hold your hand, they are there to provide a service.
She isn't offloading the responsibility directly to the government or tax payer like you. She may be indirectly doing so, but the loan originating bank that write these kinds of loan (30 year fixed to a 58 year old teacher) didn't do their math or intentionally take on a risky loan. When you take on a risky loan some will default, that's part of the cost of doing business.
Now if the lender sell these loans as "good" loans to Fanny Mae, and the default rate is above the typical, the originating lender.
Its probably been discussed already but why doesn't she just rent it out.
She could find a decent apartment and hold on to this until its paid off and sell it then for some cash she may need or use it for income.
Usually if you are up side down on a mortgage, your payment would be significantly more than if you just rent the entire place as a tenant.
Renting individual rooms usually sum up to be a significantly lower price than renting the entire place as an apartment or house.
So you can deduct that if she is paying that much in mortgage, she will get significantly less than if she just walk away and rent 1 room from someone's apartment or house, or even an entire apartment all by herself.
Originally Posted By: Bill in Utah
Originally Posted By: rjundi
Originally Posted By: L_Sludger
It sounds to me like she's an irresponsible member of society and you want to know what options there are to offload some of her liabilities onto taxpayers like me. Frankly, it bothers me a lot.
The bank is also clearly responsible along with the purchaser. The bank will sort it out.
Bank is not part of the blame game IMO. They are not there to hold your hand, they are there to provide a service.
She isn't offloading the responsibility directly to the government or tax payer like you. She may be indirectly doing so, but the loan originating bank that write these kinds of loan (30 year fixed to a 58 year old teacher) didn't do their math or intentionally take on a risky loan. When you take on a risky loan some will default, that's part of the cost of doing business.
Now if the lender sell these loans as "good" loans to Fanny Mae, and the default rate is above the typical, the originating lender.
Good catch. That's an insane payment. My mortgage on a 2700 square foot home 1.5x that value is less than that figure with escrows.
Perhaps some of that payment includes some of her escrows and/or condo fees.
But then, the payment I listed was with escrows, so it's apples to apples.
Originally Posted By: FoxS
Originally Posted By: thomasflaherty
Are we missing some thing here $1787 how much did she borrow in 2004 at what rate and what are the taxs??? alot of numbers left out of the story
Seems like me and you are the only ones who spotted this.
$1787 payment on a 30 year mortgage with a balance of $160k with 21 years to go is an interest rate above 12%.
If this is true then walk away and stick it to the bank.
And maybe, as a teacher, she could now go and learn a little about personal finance. If they taught that at schools, the country might have a brighter future.
Perhaps some of that payment includes some of her escrows and/or condo fees.
But then, the payment I listed was with escrows, so it's apples to apples.
Originally Posted By: FoxS
Originally Posted By: thomasflaherty
Are we missing some thing here $1787 how much did she borrow in 2004 at what rate and what are the taxs??? alot of numbers left out of the story
Seems like me and you are the only ones who spotted this.
$1787 payment on a 30 year mortgage with a balance of $160k with 21 years to go is an interest rate above 12%.
If this is true then walk away and stick it to the bank.
And maybe, as a teacher, she could now go and learn a little about personal finance. If they taught that at schools, the country might have a brighter future.
Originally Posted By: PandaBear
Usually if you are up side down on a mortgage, your payment would be significantly more than if you just rent the entire place as a tenant.
True enough but even if she had to kick in a few hundred a month it might be worthwhile.
Her credit wont be damaged as she still pays the mortgage and its like an investment she can use later.
Course we have no idea what this place is or how much rents are there.
In Boston at studio in the right area cost $1200 a month plus parking.
Like i said just a thought.
Usually if you are up side down on a mortgage, your payment would be significantly more than if you just rent the entire place as a tenant.
True enough but even if she had to kick in a few hundred a month it might be worthwhile.
Her credit wont be damaged as she still pays the mortgage and its like an investment she can use later.
Course we have no idea what this place is or how much rents are there.
In Boston at studio in the right area cost $1200 a month plus parking.
Like i said just a thought.
my dad was in the same situation back in 2005. refinanced for 30 yrs for 60k home with cash out. then had a stroke and couldn't work no more or take care of the home/yard. he foreclosed and filed for bankruptcy. he lived in that home for twenty years to boot. he's 68 now and lives in an apt with my mom.
Her original buying price would have to be way over 160,000 dollars to have a $1787 monthly payment on a 30 year loan or her interest rate would have had to be astonomical to get that monthly payment.
I refinanced my home on a 10 year note in 2003 for 5.75% and rates continued to decline after that. I had good credit and went for a shorter term but I still can't fathom how her payment is so high. Something does't add up for me.
Her options are pretty limited at this point. She is way upside down on the condo and this is not a good seller's market right now. She probably needs to get some professional help on this one.
Wayne
I refinanced my home on a 10 year note in 2003 for 5.75% and rates continued to decline after that. I had good credit and went for a shorter term but I still can't fathom how her payment is so high. Something does't add up for me.
Her options are pretty limited at this point. She is way upside down on the condo and this is not a good seller's market right now. She probably needs to get some professional help on this one.
Wayne
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