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1)Sheldon has a home valued at $ 108,000 and an outstanding mortgage of $ 70,000. If his lender is willing to provide a home equity loan of up to 80% of market value, how much could Sheldon borrow using a home equity loan?

2) All of the following are useful ways to build a strong credit rating except
a.Make payments on time.
b.Open and use a charge account.
c.Talk with the lender if you foresee difficulty in making a payment.
d.Apply for a long-term loan and occasionally be late with a payment.
e.Open checking and savings accounts.

Please Help! Thanks!

Please help me settle a debate. Here is the scenario:

Say you buy a house for $ 100,000 and get into a 30 year mortgage with a bank. Over the years, you manage to pay off 70% of the principal (with interest), and thus you have built equity on your home (say 70%). Then disaster strikes and for whatever reason you can’t make your monthly payments. You try to sell the house on the market but no luck. For simplicity, you have $ 30,000 left to pay on your loan.

The bank ends up repossessing your house and auctions it off for $ 80,000. From the sale money, it keeps the necessary amount to cover your outstanding debt (say $ 30,000), and any administrative costs it has incurred (say $ 2,000). The left over money is $ 48,000.

Now, here is the question: where does this $ 48,000 go? Does the bank keep it or do you get it (since you built 70% equity)? Does your equity vanish if your house gets repossessed and auctions?

10 Thoughts on Personal finance problems….help?!?
  1. Reply
    SoccerRefToo
    February 22, 2011 at 11:41 pm

    Weather

    1) $ 16,400 2) d

    Now start reading the book! Really easy stuff……

    Soccerref

  2. Reply
    ladybugloveable
    February 23, 2011 at 12:06 am

    HELL WHO KNOWS???!!!! WHO THE FUCK GETS THE MONEY???!!!! JUST SOUNDS LIKE YOU ARE SHIT OUT OF LUCK??!!! THERE??!!! OKAY OKAY!!! BYE BYE FOR NOW!!!!

  3. Reply
    jmg559
    February 23, 2011 at 1:06 am

    Sorry but you dont get ur money back on that. The funny thing is the banl will say that the xt 48000 went to pay for repairs, pay of employees that went to market the house, permits from the city to auction the house and so on. Not only will ur equity vanish faster then you can say plaese but ur credit go drop hard.

  4. Reply
    tngkp
    February 23, 2011 at 1:56 am

    why not take the equity out of your house with a second lein and make the house payments. Or, go on ebay and sell lottery tickets for a drawing for your house – 2000 tickets @ 50.00 each = 100, 000 dollars. Have the drawing and post pictures on the internet. Take the money and go to Canada where you can live cheaper than here. Good luck.

  5. Reply
    dkwr14
    February 23, 2011 at 1:57 am

    nope repossession= loss of home. Its not yours anymore its the states.

  6. Reply
    rehabob
    February 23, 2011 at 2:46 am

    Initially, the sheriff will get all the proceeds. Then the court will order so much paid to the lienholders (bank). The sheriff (or clerk of the court) will hold the rest until the court orders the money paid to the former owner — on their motion for it to be paid to them.

  7. Reply
    robert495713
    February 23, 2011 at 3:26 am

    Yes your equity would vanish but this is an unlikely scenario. Not too many people would let their house be foreclosed on with that much equity.

    If the house is worth $ 80,000, the homeowner could put the house up for sale for $ 60,000 and have it sold in a week. That would stop the foreclosure and still give them some of the equity.

  8. Reply
    dreamscorporation
    February 23, 2011 at 4:21 am

    debt consolidation

    getting out of debt is pretty easy with a debt consolidation plan
    however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,

    a good place to start in my humble opinion is:

    http://umgarticles.atspace.com/debt-consolidation.htm

  9. Reply
    Searchlight Crusade
    February 23, 2011 at 4:42 am

    Theoretically yes, at least in California. However, there are all kinds of expenses related to the process of foreclosure and selling your property, and the fact is that it’s in foreclosure means there’s a lot of unpaid interest, plus the fact that your contract usually states the bank gets to add a charge for making them go through foreclosure. Not to mention any other loans and liens you may have taken out to save it.

    The practical upshot is that it is unlikely you’ll get money back when your property is foreclosed. Better to sell it yourself before that happens.

  10. Reply
    curtain r
    February 23, 2011 at 5:17 am

    Debt Consolidation – Get Out Of Debt
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    What is Debt Relief?
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    Debt Management and Building Wealth
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    How to lower your debts?
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    How to reduce debt : How to lower your expenses?
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