Home Sale Advice

[Urban Chicago]

Not for me, but a friend. His DW is in the "second" interview for an out-of-state job. If she gets it, they would have to sell their underwater house to move. They want to do it, as it's a great job.

They would probably need to come up with about 30K. They don't have the cash and don't want to ruin their credit with a short sale or foreclosure. What type of loan should they get to cover this 30K?

They have great credit. Will the mortgage company work something out with them, or do they need to get the money from a different source and pay off the mortgage at closing?

[Wisconsin Beth]

Does the company have any type of relocation package?

[Urban Chicago]

They haven't gotten to the negotiation point yet, but for the purposes of this, let's say no. I think the company will probably end up $2000 for moving expenses, but that's all.

[Peace77]

They can certainly ask their current mortgage holder.

If she is offered the job, I would ask the new employer about assistance with relocation expenses.

[hoops902]

"What type of loan should they get to cover this 30K?"

A personal loan if they can get it. My guess would be somewhat unlikely though.

The mortgage company will likely not work something out since they are in the business of mortgages, and this will not be a mortgage. If they are affiliated with a lender who does personal loans then they might get in that way, but it wouldn't be through a mortgage.

[azphx1972]

Ethics questions aside, is there a good reason that they feel keeping their good credit is worth coughing up 30k that they don't have? Unless their jobs depend on having good credit, or they have an urgent need to borrow money in the near future, they should do an analysis on whether borrowing 30k makes sound financial sense (assuming they live in a non-recourse state). The following link may be helpful to them.

bankinganalyticsblog.fico.com/2011/03/research-looks-at-how-mortgage-delinquencies-affect-scores.html

[Deleted]

Maybe the new employer would give them a loan for the difference.

[Gardening Grandma]

Have they considered renting the house for a few years? Even with a negative cash flow, they might be better off than paying on a $30K loan (if they could even get one)

[thyme4change]

First, I would work with the lender - especially if it is a big, well known bank. They might be willing and able to do all sorts of things.

If that failed, do they have a paid off car? That probably wouldn't gather the whole $30k - but it might be a lower interest rate than a personal loan or a signature loan.

Also, I would really consider a short-sale. It seems now that so many people are doing short sales, I really wonder if people will consider it a huge sin. They might recover from it in a year or two.

[olderburgher]

Don't you love it when a poster's comments begin with "Ethic questions aside". Do we then wonder at least in part why this country is in the shape it is in? I've done business with one client with only a handshake for at years to seal the deal. There has never been an "Ethics aside" issue in either the lean times or the good ones, said the poster sadly shaking his head....

[azphx1972]

It must be nice to be able to sit on your high horse, and consider everyone who has ever gone through a short sale or bankruptcy to be worthless human beings.

FWIW I've never personally walked away from debt, but I understand how people can make mistakes and get into bad situations sometimes, and I'm glad there's a way for them to get a fresh start if necessary. As a tax paying citizen, I don't mind paying my fair share for these social safety nets either, even if I'll most likely never reap their benefits.

[hoops902]

Mar 30, 2011 14:08:45 GMT -5 olderburgher said:

Don't you love it when a poster's comments begin with "Ethic questions aside". Do we then wonder at least in part why this country is in the shape it is in? I've done business with one client with only a handshake for at years to seal the deal. There has never been an "Ethics aside" issue in either the lean times or the good ones, said the poster sadly shaking his head....

Because I think we all understand what the ethics question is. So rather than rehash over and over and over what everyone's opinions are ethically, someone wants to get to some of the other areas of the issues.

"Ethics questions aside" is not equivalent to "do whatever you want and ignore the ethics of it", it is equivalent to "I know there are ethical issues, but the question I ask is about another aspect of the situation, so when responding please don't go into a tyrade about your belief system that we don't all share anyways".

[hoops902]

"There has never been an "Ethics aside" issue in either the lean times or the good ones, said the poster sadly shaking his head.... "

So I can assume you give this client their services for free? The ethics of charging to help your fellow man must prevent you from making money. Or do you put your ethics aside for that portion of it? Do you do a thorough audit of that client's income to determine that none of the money you are being paid comes from ill-gotten gains? Or do you put your ethics aside as long as you're getting paid? Do you spy on the client to make sure he's not doing anything sinister like hitting his wife, drinking, smoking, gambling, you wouldn't want to be associated with anyone like that. Or do you put your ethics aside in that case since he's paying you?

We all put ethics aside in hundreds of instances constantly, just because you found a reason to rant about some old-timer notions that have never been, are not currently, and never will be true doesn't change that.

[Urban Chicago]

Unless their jobs depend on having good credit, or they have an urgent need to borrow money in the near future

Actually, the new job would require good credit and probably would recheck annually. They would also want to buy a house in the new area within a year or so of moving.

Also about renting, the area they live in is really depressed. I don't doubt that their home will take about 10 years to recover the price. IMHO, that's way too long to rent with negative cash-flow, saying nothing of the problems associated with being a long-distance landlord.

[hoops902]

"They would also want to buy a house in the new area within a year or so of moving."

With what money? Assuming they get a loan they have $30K to pay off, they're going to pay that off and still have enough for a downpayment in year 1?

[Gardening Grandma]

"They would also want to buy a house in the new area within a year or so of moving."

As hoops said, "With what money?" If they don't have the $30K to bring to the table, where would they get the down payment? A zero down deal? That's a recipe for getting underwater again.

They need to wake up and smell the coffee, imo.