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Trevis Kelley
  • Rental Property Investor
  • Buffalo, MO
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51
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Another Underwater home - different approach

Trevis Kelley
  • Rental Property Investor
  • Buffalo, MO
Posted Jul 21 2015, 18:34

I have been trying to figure out how to get rid of my underwater home for a while.  I recently became disabled, and moved away from a mortgage I could no longer afford.  I have luckily found a renter to help make the payment (still about $150 short per month).  I can afford this amount just fine, it's everything else that bothers me.  A little info:

Home has a current mortgage of $98,000 with a monthly payment (PITI) of $875 (been going up lately due to insurance and tax rate hikes). Home is worth $85,000 or so.

Home is in a neighborhood that has only been decreasing in value.  When this home was purchased (early 2007), neighborhood was nice and on the rise.  When the crash happened, this neighborhood was hit hard with foreclosures and short sales.  It is now a poorer neighborhood and will probably get poorer with time.

I am tired of pouring money into this place, as maintenance seems to be fairly high (partly due to neighborhood, partly to my own stupidity - bought something I shouldn't have because "it looked pretty").  Taxes and insurance keep going up, even with my challenging taxes and shopping around for insurance.  Property is in another state as well, so I have a property manager to help me deal with the day-to-day.  Yet another expense.  I don't particularly like not being able to actually see the condition of the property either.

My thought was to try to sell it at the current mortgage price and have the buyer loan out the $13000 or so still owed.  Or try to get a bank loan.  I would have to keep the payment amount at $200/mo or less for this to even make sense.  Is this even possible?  Are there alternatives?  I have talked to the bank about a short sale, and they don't want to do one, even though I threatened to walk away.  I would rather come up with a solution that allows me to uphold my end of the contract anyway, but one that doesn't cost me this much.  Every year, I watch my owed amount go down at the same rate as my house value.

Please help!

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