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I own a home in michigan and have two mortgages out on it. I am trying to sell my home in michigan and it has been on the market for 5 months. I owe 95,000 on it and my realtor wants me to try and sell it for 50,000. I bought it at 120,000. I have recently been relocated to Ohio (signed on for at least 3 years) and am wondering if I should rent an apartment instead of buy another home. I am thinking of foreclosing on the home in michigan and if I do that my credit won’t be good enough to buy a second home right away. I am approved for a second loan of 100,000 on top of what I owe on my first house. Should I buy another home in Ohio and foreclose on the second (in Michigan) and what are the repercussions of doing so. I am thinking of hiring a real estate lawyer to help me with options. What do you guys think?? Any ideas?

4 Thoughts on Owning a home and buying another in a different state?
  1. Reply
    Tim
    June 7, 2011 at 3:06 am

    Could you rent the home in Michigan to cover the payments? I’s look at renting the first if possible and witing for the market to rebound. There are some great tax advantages as well to renting out residential property.

    I’d look at that option.

  2. Reply
    loanmasterone
    June 7, 2011 at 3:38 am

    There are several options that might be available to you that your real estate agent might not offer you because it would not get him/her a commission immediately

    #1 Lease Option

    #2 Renting the current home

    #3 Land contract

    #4 Renting to a tenant

    #5 Get a loan modification while you still use it as your residence

    #6 Short Sale

    #7 Selling the house and carrying the mortgage yourself.

    There are many individuals that can assist you in handling either one of the options listed above.

    If you are one that like to do things yourself then there are many books on the options that you might use.

    The are consequences and risk involved in anything you do. You have to weigh them and make the best choice for yourself.

    You could purchase the house in Ohio with the approval you have, and then allow your current house to go into foreclosure.

    Foreclosure is the last thing you want to do in this situation when you have so many other viable options.

    I hope this has been of some use to you, good luck.

    “FIGHT ON”

  3. Reply
    Doctor Deth
    June 7, 2011 at 3:51 am

    how could you possibly be approved for another home if you are potentially 45k in the red with your current home – that negative equity is not going to go away the bank may not agree to losing that much money and not approve a sale for 50k, so you might still be paying on that 95k mortgage for awhile – foreclosing will kill your credit and probably knock you out of the housing market for awhile, plus you may still owe on the negative equity – your mortgage company is the first one you have to talk to – don’t even think about a new house yet – get an apartment

  4. Reply
    Suresh P
    June 7, 2011 at 4:14 am

    Here are similar answers what others gave.
    1. If you can afford to pay both the homes you can keep it.
    2. If you can rent out the old one and show the proof to the bank, you can ask for more loan (bigger home)
    3. If you succeed in selleing old one, you can buy bigger home in Ohio

    Given the situation, you dont need to spend on lawyer, your new mortgage lender will help you out with options

    In the current situation, best option is to rent it out. (Not much hastles, advertise in craigslist or rent.com in a month, it is done!!.)

    You can buy a new home elsewhere and foreclose.
    1. But… Old Bank may come after the new home and its equity and will not write off your old home loan. Banks coming after the new home are extremely rare but in the current financial crisis, you never know.

    2. you will never get a new loan for ~7 years (not even credit card or leased car). When you dont have a proper credi card, you cant even afford a rental car!!. Many landlords/apartment managers will refuse to provide a rental home.

    If your loan on old home is NOT ARM, and if you are already approved for a new loan, you can rent out the old one (and make out as much as you can) and sell it down the lane (may be for profit).

    I hope this helps

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