Re: I have a 115% mortgage on a 3 Year Arm...is there hope?
08-17-2007 07:25 PM
Selling part of the house is not a loan. There is a major difference between equity positions and loans particularly in how usury statutes apply. Please note that I suggested he use the proceeds to pay off the second, so that person's equity would only have one loan in front of it. (still true after a re-finance). As for why any investor would get involved-remember that there has never been a 3 year period when the average R.E. price in the country has gone down, the long term trend is always up. If an investor can get an equity position in a property without all the normal costs of obtaining their own mortgage they can eventually get a good cash on cash return. We don't have the numbers to know if this will work here. The bad thing is not that you can't find investors to do this, but that you have to eventually sell the house and give them a lot of the equity, but it beats foreclosure or bankruptcy. In the other scenario note that I suggested buying a house subject to. The problem here is not so much finding someone more desperate and buying subject to, but being able to re-finance dollars out of it. A third option:find out if the ARM lender will renew that loan. If they will use the time you gain to do some budgeting and 0% balance transfers and start paying down debt.