Stuck?

[dep05]

We've been out of bankruptcy for a year now and we are still living in our home. We never reaffirmed our loan and we are wanting to leave this house and possibly purchase another. Our house needs a lot of repairs and is too small for us. Selling it doesn't seem to be a good option because of all the repairs and because what we owe(d) on the house is more than we'd be able to sell it for.

Can we get a mortgage on a new house while still living here and knowing that we'd be letting this one go? We are current on our mortgage payments. We've thought about renting for a while, but there is not a lot of options in our area.

Are we stuck here forever?

[HHM]

Not likely...unless you can afford both house payments on paper. I don't think you can, or would want to, go to a lender and say: hey, we want a mortgage and oh by the way, we are letting our current home go in foreclosure so we can afford the house we want you to lend us money on.

[SinkingFast]

If you had let the house go when you filed BK, the Foreclosure and the BK would have been viewed as one incident by prospective mortgage Lenders.

Now,............ I think HHM's comment pretty well says it all.

Not likely...unless you can afford both house payments on paper. I don't think you can, or would want to, go to a lender and say: hey, we want a mortgage and oh by the way, we are letting our current home go in foreclosure so we can afford the house we want you to lend us money on.

Check into the possibility of selling your house "As Is". Call your Lender and get a pay-off. Get a Realtor out to give you a Competitive Market Analysis. See how much you could list your house for with no repairs and what you could reasonably expect. Might be, you have a property Investors would be interested in to fix up and rent out.

Otherwise, probably your best bet to get out of this house would be,.......... Let this house go into Foreclosure, rent for a while, and then try to buy. Maybe a year or 2 down the road from the Foreclosure hitting your Credit.

[dep05]

Thanks. What you are saying makes sense.

So, what if we attempted to sell our house as is? Could we then get a new mortgage at the same time? If we kept the payments current until we moved into our new house and then let it go if it doesn't sell? Any chance that would work?

[HHM]

You don't really get to choose to sell your house "as is" unless you get an agreement from the current mortgage holder that they will accept less than what they are owed.
Remember, the only way to legally pass deed to the house to a new purchaser is to remove all encumbrances (i.e. the mortgages), which requires that you pay off the mortgages, or get the mortgage not holders to accept less.

And again, most banks are not going to loan to you while you are still obligated to make payments on the a prior house unless you can "afford" to do so with your current income.

But, there is no harm to you to going to a mortgage broker and speaking to them and find out what your options really are.

[dep05]

Sounds like our best bet would be just to let the house go into foreclosure then?
I hate to just up and leave, but we can't afford to fix the house to sell it. Since we did not reaffirm our loan, we can just leave with no repercussions right? Other than the negative hit to our credit report?

[HHM]

Sounds like our best bet would be just to let the house go into foreclosure then?
I hate to just up and leave, but we can't afford to fix the house to sell it. Since we did not reaffirm our loan, we can just leave with no repercussions right? Other than the negative hit to our credit report?

Correct, generally speaking, if you did not reaffirm a secured loan, you are not liable for any loss the bank may have on the auction of the house.

[dep05]

Thanks, that's what I thought.
I hate the thought of having to just let the house go, I am just not sure what else to do. In order to sell the house for what is owed on it, we'd have to put a lot of money into it (it needs a new roof, for one thing) and that would put us into debt again. I assume it would be a stupid move to go into debt just to avoid foreclosure right?
Sorry for all the questions & thanks for all your input. I appreciate it greatly.

[chucko]

Sounds like our best bet would be just to let the house go into foreclosure then?
I hate to just up and leave, but we can't afford to fix the house to sell it. Since we did not reaffirm our loan, we can just leave with no repercussions right? Other than the negative hit to our credit report?

No offense at all here, but if you can't afford to fix up a house you are currently in, are you sure it's a good idea to get another mortgage and have another house you may potentially need to make repairs on? Sounds like what you want to do makes no financial sense.

I would recommend against foreclosure because you don't have to move. You obviously can afford your mortgage now, so I would stick with it until you can sell it or repair it slowly yourself and then sell it. Your BK destroyed your credit and you are trying to rebuild it. Why ruin that by trashing your credit again with a foreclosure. Like you even said, rentals are not really an option, but you'd be forcing yourself into renting some craphole because you don't feel like living in your house anymore.

My advice: Suck it up for a while. Make do with what you have, preserve your credit, keep your house, and wait for it to sell or repair it yourself before moving to another house. You have no financial emergency making you leave that house. If you have a kid on the way and the house is too small, make do with it. Be creative. Beats the hell out of having a kid in an aparment.

Good luck

[HHM]

On the same note,

What kind of repairs are we talking about? When it comes to home repairs, unless it is something structural, involving masonry, or diagnosing and fixing a problem with a major appliance (i.e. heat pump, water heater, etc) where there is a will there is a way. Believe it or not, most people can manage most, (even major) home repairs, i.e. plumbing, roofing, flooring, sewage...

However, I understand that the other reason is that you say the house is too small...but your financial reality may dictate this point...you can only afford what you can afford.

[tay666]

When it comes to home repairs, unless it is something structural, involving masonry, or diagnosing and fixing a problem with a major appliance (i.e. heat pump, water heater, etc) where there is a will there is a way.

Actually a water heater is one of the easies major appliances to replace.
If it's gas, get one that is basically the same dimensions.
You have to disconnect 3 pipes (cold water in, hot water out, and the gas line) and the duct work on top. If the replacement is the same size everything will match right up again.

I agree with a lot of the other posters.
I would work on what I could to either improve the condition of the house, or at the very least keep it from deteriorating even more.

You won't have to stay there forever. Just long enough to pay off more of you principal, and maybe increase the value of the home above that so you can sell it without a loss.

But we would need more info on what exactly are the problems to know if that would be the best course of action.

[BKOnce]

I fix EVERYTHING in my house at least once. From gas, water, electric, plumbing, kitchen, bathroom, etc., you name it.. even roofing & room addition too. Save a lot of $$ already.

[dep05]

The house needs a new roof and I believe a new furnace, part of the front porch is caving in, the garage needs a new door & we are afraid to enter the attic because we know something is living in it. The rest of the house, for the most part is okay. I think we could fix everything but the roof, aren't new roofs very expensive?

The other thing is, a year or so before we filed bk, we refinanced our house in an attempt to avoid bankruptcy. We rolled about 17,000 worth of debt into our mortgage, so we now owe way more than the house is really worth in it's present state. If we had known bankruptcy was inevitable, we never would have refinanced.

As far as renting, it's not completely out of the question. We just really don't want to be in a complex.

Honestly, I'd love to avoid foreclosure. Our mortgage payment is reasonable and we can afford to keep up with it. The home repairs just seem overwhelming and huge, but maybe it'd be worth it in the long run? We're just afraid of going back into debt by attempting to get a loan to fix the house. The roof is leaking and pieces of it are constantly falling off. I know it needs replaces asap. Any suggestions there? Does anyone know how much it would cost to replace?

Thanks everyone for your input.

[JollyGG]

What style (ranch, two story, split level, ect.) home do you have and how many square feet. Does it have gables and peaks, are there additions to deal with? That would help us give you an idea of how much work a new roof would really be. If you have a simple roof - a trip to the library, a little internet research, and some friends help over a weekend and you probably could replace the roof yourself. Ask around you may have friends or relatives that have tackled their own roofs in the past and could help you with yours. Or check at your church. Mabey someone there could help you with the basics.

Does the furnace work? Have you had it cleaned and inspected?

The front porch I'm assuming would just be a matter of replacing some boards. Some traps and the roof repair should take care of the critters in the attic. Doors are easy to replace.

Who knows, with some home repairs you may fall in love with your house all over again. Or at the very least you may get it in good enough shape to sell.

[tay666]

Ok, the roof is definitely the biggest thing here.
Especially if it is leaking.
That needs addressed so other things don't get damaged.

Along with the questions asked, do you know how old the roof is?
If the structure isn't too old, it just might need new shingles.
A lot less expensive than having to replace some of the wook underneath.
If there is only one layer of shingles on there now, depending on local codes, you could just put new shingles right over the old ones. (here you can go up to 3 layers of shingles on a roof).
That saves cost because you don't have the time of stripping the old ones off. And expense of having them hauled away. And no need for new felt paper or ice block (if applicable)
Get some free estimates from local roofing guys.
It doesn't hurt to find out what the cost might be.
Get several estimates and find out exactly what they are saying needs replaced. That way you can get a general consensus of what the problems are and how severe the situation is.
We can't really give you estimates as prices vary widely by region, and roof.
I know here, where I live, I can get my roof (house 25' X 50' 2 story with 2 valleys and a 12:12 pitch) done for about $5000. But that is also because I know people who do that kind of work.

On to the furnace.
What is wrong with it?
Doesn't work at all, or just getting old.
If it is the latter, it can probably wait a little longer.

The porch.
What is caving in? The roof, or the deck?
If it is the roof, get some posts to help support it for the time being until you can decide the best way to takle it.

Garage door would probably be the easiest but also the least important fix.

I would suggest that you get a firm grasp on the issues.
An idea of costs to repair / replace. And some kind of timeline of when they actually 'need' to be done.
Then you can try to look at it objectively and make a decision on if you can make a go of it, or ir you really would be better off walking away.