Advice - Filing Chapter 7 with a mortgage that has a ballon mortgage

[David2903]

I'm filing for Chapter 7, I'm thinking of giving up my home.
The issue is I have a balloon mortgage on my home, is it worth it to keep it or not?

Comps on the house is 85k
Previously owe 71k
19 year left on the mortgage
Balloon payment 30k after 19 years
2% Apr on the mtg now.
What to do is it worth it to keep the house
House also needs about 15k in repairs

What are your thougts

[bcohen]

With a 2% APR mortgage, your monthly cost to live in the house must be much, much less than what you'd pay in rent to live somewhere else. Therefore, even taking into account the necessary repairs, you come out ahead by keeping the house. Remember that as time progresses, monthly rents will increase a lot, but your mortgage payment should not increase too much (excluding the balloon payment at the end).

As long as you are happy living where your house is located, and are able to set aside money each month for the eventual $30k payment, it's a good investment. Even if you are not able to save for the balloon payment, it might still be worth staying in the house for as long as possible, because it will be cheaper than renting. As long as you don't reaffirm the mortgage, you really don't have anything to lose by keeping the house.

[LadyInTheRed]

I agree with bcohen. Keep making payments, but do not reaffirm the mortgage. 19 years is a long time. You should be able to refinance before that. Scrimp and save to make those repairs!