R
RedWings
Guest
I currently own a condo that I rented out and moved in with my GF and our 8 month old baby. Currently my rental income ($1400/mth) is not covering the mortgage and HOA fees ($2000 total).My condo has lost value (~$35k) and the I/O ARMs I bought the condo with will expire come March '08. I went in with no equity, and still owe what I 'paid' for it (~$300k)
After talking with a few people, including mortgage lenders, I've decided to dump the property and take a loss. To refinance, I'd have to come to the table with the ~$35K and my payments would still go up ~$400/mth plus whatever I'd have to put toward the personal loan to cover the difference.
With having the baby in the picture, I can't afford that sort of increase. I've already priced the condo rental price to be competitive and couldn't raise it much more.
My current lease with my tenants is up October 1 and they are interested in signing a new lease...but only for 6 months since they are considering leaving the area.
As for my GF, her mortgage is due up next month (5yr/12mth ARM) and her rate will go up to 7.3% and her payments will go up ~$300/mth. She looked at refinancing, but she has not much credit (only her mortgage) and has 3 late payments on that loan. So they can't qualify her for anything better than what the I/O ARM will adjust to. Her mortgage is for $195k but her place is valued around $350k.
So my idea is to refinance her place in my name, get the lower rate (I have a credit score of 784), pull out some equity to cover my loss, sell my place, and we split the mortgage (Keeps our housing costs low).
Pros for her: Lower rate, lower payments, have some cash for needed improvements
Pros for me: Get rid of condo, lower payments, more money for baby
So my question is this. Based on my idea above, how would address paying back the loan to her. My thoughts are that my part of the payment that goes toward paying the principal down will be deducted off what I owe. Also, all refunds for interest/baby will be hers and used to help pay off the loan (equity she pulled out to cover my loss). If we decide to sell and move to another place, any equity earned from this date forward would be all hers. My half would go toward the loan. After the loan is paid off, we'd come up with a new agreement.
I'm sorry for the long post, but it makes it easier for me to understand exactly what I'm thinking.
Please offer suggestions.
~Gregg
After talking with a few people, including mortgage lenders, I've decided to dump the property and take a loss. To refinance, I'd have to come to the table with the ~$35K and my payments would still go up ~$400/mth plus whatever I'd have to put toward the personal loan to cover the difference.
With having the baby in the picture, I can't afford that sort of increase. I've already priced the condo rental price to be competitive and couldn't raise it much more.
My current lease with my tenants is up October 1 and they are interested in signing a new lease...but only for 6 months since they are considering leaving the area.
As for my GF, her mortgage is due up next month (5yr/12mth ARM) and her rate will go up to 7.3% and her payments will go up ~$300/mth. She looked at refinancing, but she has not much credit (only her mortgage) and has 3 late payments on that loan. So they can't qualify her for anything better than what the I/O ARM will adjust to. Her mortgage is for $195k but her place is valued around $350k.
So my idea is to refinance her place in my name, get the lower rate (I have a credit score of 784), pull out some equity to cover my loss, sell my place, and we split the mortgage (Keeps our housing costs low).
Pros for her: Lower rate, lower payments, have some cash for needed improvements
Pros for me: Get rid of condo, lower payments, more money for baby
So my question is this. Based on my idea above, how would address paying back the loan to her. My thoughts are that my part of the payment that goes toward paying the principal down will be deducted off what I owe. Also, all refunds for interest/baby will be hers and used to help pay off the loan (equity she pulled out to cover my loss). If we decide to sell and move to another place, any equity earned from this date forward would be all hers. My half would go toward the loan. After the loan is paid off, we'd come up with a new agreement.
I'm sorry for the long post, but it makes it easier for me to understand exactly what I'm thinking.
Please offer suggestions.
~Gregg