What should I do? I bought a 2 bed 2 bath condo in 2005, in San Jose, Ca. At the time….?

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I was really young and didn’t have any experience in buying homes, so I got screwed in one of those “arms” of which I didn’t exactly understand when I signed my life away. My rate has just adjusted, adding an extra 800 to my current mortgage of 2400.Hoa is another 250. I am paying $ 3450 for a 2 bed , 2 bath condo which is absolutely ridiculous. Fortunately, I am able to make the payments however I feel that for this much money, I can live in a much nicer single family home with more bedrooms.Refinancing is out of the question, I have spoke to many loan companies and because the value of the condo has dropped about 50,000, I would have to pay alot of money to refi.Renting the property out and buying a single family home wouldn’t help because I would be able to rent it out for about 1800 max. (ridiculous) .I am thinking of foreclosing the property and taking a hit on my credit score of 807. I don’t have a cash flow problem, I just wan t to get rid of the condo.

  1. Reply
    May 4, 2011 at 12:45 am

    That foreclosure will cost you severe damage when you try to buy another home!!

    I’d try to tough it out if I were you. What about someone to move in and help pay for it?

  2. Reply
    May 4, 2011 at 1:05 am

    sell it!!

  3. Reply
    May 4, 2011 at 1:26 am

    I think that is a bad idea in terms of your credit. Try to sell it to an investor who is looking for rental property. If you just want out, take any price. The repercussions of foreclosing could be felt years down the road.
    Investors and flippers are always looking for places just like that.

  4. Reply
    May 4, 2011 at 1:30 am

    I just re-financed my home in Calif. (just in Dec)
    I think it might even be worth it, to pay the extra to get it re-fied.
    I have the guys name In LaGuna Niguel if you are interested.
    He gave me a really good deal.
    If so, contact me…

  5. Reply
    May 4, 2011 at 2:12 am

    You are not alone. Do you read newspapers? What has happened to you has happened to many thousands of people. That is why the value of your property has decreased.

    It is a shame to spoil your beautiful credit rating if you can afford the payments. In your situation, i would stop worrying about the better place I “should” be living in for the money and suck it up for now, because the market is in huge flux and you are likely to make a worse mistake.

    Can you take in a roommate to share the costs and ease the pain? Just a suggestion.

  6. Reply
    Real Estate Guy
    May 4, 2011 at 3:11 am


    Your credit report will take a HUGE hit and you may not be able to buy another place for years.

    Second and more important. If the bank forecloses on the condo for less then you owe of the property, YOU WILL OWE THEM THE DIFFERENCE. They will get a judgement against you and this will show on the credit report. At that point, in order to EVERY use your credit again, you will need to pay this judgement off.

    PLUS this amount that you owe the bank will be counted as taxable income.

    This is the reason that people that have a foreclosure usually goes into BK.

    I would see if you can work a deal out with the lender to lower your payments. Or refin.

  7. Reply
    May 4, 2011 at 3:37 am

    Too bad about the condo, sorry. You can sell it at a reduced price thus taking a loss or let them foreclose. I had a buddy that went through a similar experience. In his case he decided to secure the second property first before allowing the condo property to slip into default and then into foreclosure. When he was informed about the foreclosure he emptied the property of all non attached items, appliances, ceiling fans, lighting, and doors throughout the condo and sold them.

  8. Reply
    T M
    May 4, 2011 at 3:44 am

    being young and inexperienced in buying homes is a poor excuse for not exactly understanding what you’re signing. if you didn’t understand it, you should have sought out competent counsel, even it meant hiring someone. since you don’t have a cash flow problem now, what is preventing you from doing that for your current situation?

  9. Reply
    May 4, 2011 at 4:35 am

    Don’t foreclose, it will do to much damage. If you have some equity, you can try getting an equity loan and use that as your downpayment to refi.

    I am sorry, I just have to say this. I’ve bought four properties so far in my lifetime. I used ARM’s twice. I don’t understand how people are getting confused by these. You have to refi before the end of your ARM. How hard is that?

  10. Reply
    May 4, 2011 at 5:02 am

    The value of the home dropping has nothing to do with your ability to refinance. Shop another mortgage broker.

  11. Reply
    Sharon B
    May 4, 2011 at 5:28 am

    One step at a time. First contact the company you are making your payments to. Recently, President Bush started working with banks regarding these exact types of loans. If you have a loan that rolled into a higher rate, as yours did, do not call your broker, call the bank you are making the payments to and ask for a modification. They will send you paperwork and you need to fill it out in a way to make them understand the payment is to high for your budget…not what you wrote in this question….you just think it is too high for what you are living in. It was your responsibility to read your loan documents. Foreclosure seems to be the irresponsible way of the new century!

  12. Reply
    May 4, 2011 at 6:10 am

    You don’t want to go foreclose your property because it will damage your credit severely and you will have to deal with it for a long time if you do it. Paying $ 3,450 for your condo is really ridiculous but you have other option rather than foreclosing it. One, you can rent your one bedroom to help you pay the bills and the second one is to sell it even if you will owe or you will not get anything at all for the equity. It’s hard but if you just want to get out of paying your condo then that’s your option.

  13. Reply
    May 4, 2011 at 6:25 am

    Don’t ruin you’re credit,you worked hard to get it up there.Sell it even if you have to take A hit on it. You’re next home purchase will work out better for you because you will have learned a good lesson with this house.When you buy you’re next house make sure you have a good Real Estate person & a good lawer that will explain everything to you.

  14. Reply
    May 4, 2011 at 7:12 am

    All lenders are different but inquire through your lender and see if you can do a short sale without having to be late on your payments.
    Short sales are when you sell a property lower than what you owe on the property. The main issue is if the bank agrees to a short sale.

  15. Reply
    May 4, 2011 at 7:22 am

    If the current value is $ 50,000 less than your current balance 0n your present mortgage, I still would consider refinancing as the value will come back in 2 or 3 years. The prime rate will probably come down another 25 to 50 basis points in the next month so the refinance fixed rate will come down too. Also, you don’t have a cash flow problem so your not yet in a cash bind ( it will get better shortly). In addition, if I had the details, I could show you on paper the financial analysis to make the best decision.

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