Q: I am currently paying off a mortgage on a condo that is worth much much less than when I bought it. On top of that, I am also looking for a new job, and will have to pay this mortgage using some of my savings for a while. What would be the best way to let go of this place that will cause the least amount of damage to my bank account and to my credit score?
Q: I am currently paying off a mortgage on a condo that is worth much much less than when I bought it. On top of that, I am also looking for a new job, and will have to pay this mortgage using some of my savings for a while. What would be the best way to let go of this place that will cause the least amount of damage to my bank account and to my credit score?
~Randie
A: Randie, you are in a situation that a lot of others are in, and I am sorry that you are there. However, there are a few options:
- You can rent the property for a year with a property management company. They usually charge 10% of each month’s rent.
- You can sell it for market value or you can do a short sale on the property.
I am open to discussing your options with you to come up with the best way for you to get out from underneath your condo. Let me know if I can help.
~ Amy Downs
Amy Downs is a Realtor® with Keller Williams Realty in Dallas, Texas.
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A: Randie, depending on the circumstances, if you qualify you may want to consider a short sale; be aware however that the lenders don’t usually agree unless there is a hardship of some sort: loss of job, divorce, illness causing you to lose wages, relocation (may be a distance factor also – out of state, etc.). This will affect your credit rating as it is a “settlement for less than owed” on your credit report after the sale.
The lenders also may not even consider a short sale as you are current on your payments, they don’t have to; as long as you are paying, they don’t see a need for the short sale.
If you can, sell for market value and pay off the mortgage, even if you have to bring a little cash to closing; you may want to give that a try first.
Consult with an experienced Realtor and be sure they know how to work a short sale if you choose to attempt that type of sale. Good luck.
~ Valerie McGillivray
Valerie McGillivray is a Realtor® with Stone Ridge Properties in Newburyport, MA.
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Can I Sell My Condo?