furball
Aug 2, 2007, 05:50 PM
Hi everybody:
I have been very stressed out lately, and I am really glad that I found this website! I spent yesterday looking through some postings, and it looks like a lot of people are helping others out with good suggestions. So here I am, hoping to get any help/suggestions with this messy situation I am in.
My husband and I purchased a house for 575K 2 years ago in bay area, California, and I feel lately that it's the biggest mistake I have made in my entire life :(. We saved for 3 years before I (my husband didn't want to get into a house, but gave in with my whining and complaining), decided that we were purchasing a house, reason being is that, at the time, I felt, with the rate of how much we could save was not even catching up with how much the real estate was sky-rocketing, and I wanted to get into a house before we can no longer afford one. We pretty much deplenished our bank account and put down about 50K for 5% and all the closing cost, and have been pretty much emptying both of our paychecks for 1st and 2nd interest only mortgage payments, tax and insurance, car payments, and daily expenses for the last 2 years. Our bank account stayed the same as it was 2 years ago after we brought the house. I was not happy with not being able to save more money, but we live a good life, with a beautifu house to come home to. But now, our 1st mortgage is adjusting (it was a 2 year fix arm), and the payment is going up $1200 per month, this is forcing us to re-finance. I looked into re-financing, putting 1st and 2nd mortgage on the same loan will give us a interest only payment of about $200 more per month than what we are paying now, which is not bad, and it's still affordable for us, or a 30 year fix at $700 more per month, which is really pushing the limit, or exceeds the limit of what we make every month. My stress lately is that, the house market has been dropping in the last 2 years (if we sell the house now, we are not even going to be able to cover the left-over balance on the 1st and 2nd mortgage, and the houses haven't been selling very well), interest rate keeps going up, we are expecting a baby in 2 and 1/2 months. I am really afraid that 5 years later, we are going to be in the same situate, in need of re-financing, cannot sell the house to pay off the loan, still have no savings in the bank. I am really regretting of getting into a house when it's at its peak, but all is too late :(. My questions are that,
1. my new interest only mortgage payment (1st and 2nd loans combined), comes with a "less than interest" payment option per month, with this option, we will be able to save $1000 per month, however, tacking this $1000 back into the principle. I don't want to cheat the loan either, and I do feel shameful thinking about this, but if I do make the less than interest payment every month for the next 5 years, I will have 60k sitting in the bank, although tacking this 60k back into my principle. If I can sell the house in 5 years to cover the orignal loan amount and this 60k, then great, I break even with 60k in the bank. If I can no longer re-finance because of the loan to value is too high, or house market is still low, or new interest rate is too high for us to afford, then I will have to file foreclosure and bankruptcy, would it be nice to have 60k in the bank account by paying less than minimum, than have 0 in the bank by paying interest only very month for this 5 years?
2. Plus our work place (we work for the same company) is possibly re-locating in the next couple of years, that will push us into foreclosure as well... I don't know much about foreclosure and bankruptcy either, I know it seriously damage your credit, but filing foreclosure means you are still responsible for the difference, but filing bankruptcy after a foreclosure takes you out of that responsibility, right?
3. if I only put my name on the new mortgage (if we get stated loan, not full doc), but both my husband's and my names are on the title, when I do file foreclosure and bankruptcy, will his credit be damaged as well?
Sorry, it's such a long story, I do appreciate any help and suggestions I get from everyone!
Thanks! :)
I have been very stressed out lately, and I am really glad that I found this website! I spent yesterday looking through some postings, and it looks like a lot of people are helping others out with good suggestions. So here I am, hoping to get any help/suggestions with this messy situation I am in.
My husband and I purchased a house for 575K 2 years ago in bay area, California, and I feel lately that it's the biggest mistake I have made in my entire life :(. We saved for 3 years before I (my husband didn't want to get into a house, but gave in with my whining and complaining), decided that we were purchasing a house, reason being is that, at the time, I felt, with the rate of how much we could save was not even catching up with how much the real estate was sky-rocketing, and I wanted to get into a house before we can no longer afford one. We pretty much deplenished our bank account and put down about 50K for 5% and all the closing cost, and have been pretty much emptying both of our paychecks for 1st and 2nd interest only mortgage payments, tax and insurance, car payments, and daily expenses for the last 2 years. Our bank account stayed the same as it was 2 years ago after we brought the house. I was not happy with not being able to save more money, but we live a good life, with a beautifu house to come home to. But now, our 1st mortgage is adjusting (it was a 2 year fix arm), and the payment is going up $1200 per month, this is forcing us to re-finance. I looked into re-financing, putting 1st and 2nd mortgage on the same loan will give us a interest only payment of about $200 more per month than what we are paying now, which is not bad, and it's still affordable for us, or a 30 year fix at $700 more per month, which is really pushing the limit, or exceeds the limit of what we make every month. My stress lately is that, the house market has been dropping in the last 2 years (if we sell the house now, we are not even going to be able to cover the left-over balance on the 1st and 2nd mortgage, and the houses haven't been selling very well), interest rate keeps going up, we are expecting a baby in 2 and 1/2 months. I am really afraid that 5 years later, we are going to be in the same situate, in need of re-financing, cannot sell the house to pay off the loan, still have no savings in the bank. I am really regretting of getting into a house when it's at its peak, but all is too late :(. My questions are that,
1. my new interest only mortgage payment (1st and 2nd loans combined), comes with a "less than interest" payment option per month, with this option, we will be able to save $1000 per month, however, tacking this $1000 back into the principle. I don't want to cheat the loan either, and I do feel shameful thinking about this, but if I do make the less than interest payment every month for the next 5 years, I will have 60k sitting in the bank, although tacking this 60k back into my principle. If I can sell the house in 5 years to cover the orignal loan amount and this 60k, then great, I break even with 60k in the bank. If I can no longer re-finance because of the loan to value is too high, or house market is still low, or new interest rate is too high for us to afford, then I will have to file foreclosure and bankruptcy, would it be nice to have 60k in the bank account by paying less than minimum, than have 0 in the bank by paying interest only very month for this 5 years?
2. Plus our work place (we work for the same company) is possibly re-locating in the next couple of years, that will push us into foreclosure as well... I don't know much about foreclosure and bankruptcy either, I know it seriously damage your credit, but filing foreclosure means you are still responsible for the difference, but filing bankruptcy after a foreclosure takes you out of that responsibility, right?
3. if I only put my name on the new mortgage (if we get stated loan, not full doc), but both my husband's and my names are on the title, when I do file foreclosure and bankruptcy, will his credit be damaged as well?
Sorry, it's such a long story, I do appreciate any help and suggestions I get from everyone!
Thanks! :)