mariainctlfla wrote:
I'll try to make this short but it's tough... I own a home that I owe $31,000 on but is valued at $500,000. I moved 3 hrs north to accept a promotion with my company and kept the house because I didn't want to sell it in a bad market. I have a two year lease on the home I am in and there is 1 and 1/2 years left on the lease. My intention was to sell the home in South Florida over the next 1 and 1/2 years and use the funds to purchase this home. I got a call a few days ago. They are going through a divorce, they want to do a short sale on this home. I would be able to purchase the house which is worth over $700,000 for about $550,000. My credit is only fair (629) but I earn over $500,000 per year, and I can document it for a period of years. I don't know if I can get a loan on this house without having to put up a ton of money. Is it better to get an equity loan on the house in South Florida? Is that a worse deal because it is no longer "owner occupied"? Will someone loan me money on this house with my credit? without putting down more than 10%?
Do you want the good news or the truth?
I live in So Fla currently. My advice, forget about the paper value of your home (what you think it is worth). If you are able to get out of it and put some money in your pocket above what you put into it, do it. Having that cash in your pocket will do you a world of good. I suggest speaking with a RE professional about how to lock up that property for the time being with the first right of refusal in order to have enough time to get the funds together. Maybe an agreement that a portion of your monthly rent goes towards the down payment. You'll have to think outside the box to get this done.
Don't under any circumstance, drain the equity out of your home. Even if you get approved for it in this economy, your rate will make it nasty, and not worth the return on your investment. Sell it outright and get it off your shoulders, or pay it off and hold on to it. Either way, a HELOC really is a bad idea in this environment, especially here.
The previous poster is right (though a bit direct). Examine the habits that got you in the position to make 500k yet have a relatively low score. Make changes where necessary and address any outstanding issues that may be depressing your score. With 41k of pretax income on average per month, you should be able to handle some of these obligations in a relatively short period of time.
Lastly, considering your score, see if you could qualify for FHA. This link (
http://www.fhaoutreach.com/) will let you know what the limits are for the county you currently live in. Come up with enough cash to make up any difference and you may receive a great rate on the balance. Its worth a shot. I believe they may have income restrictons, but check out
www.fha.gov to find out.
