Loans Answers

Any suggestions?

Question: Does anyone see any options here?

We had crappy credit — bankruptcy 2 1/2 years ago — and a finance company sold us a foreclosure house ……anyway, we haven’t figured out the ‘huge catch” yet — there has to be a catch the way they pushed it onto us with our credit…..

They have been great, treated termites , and did everything official and legit…..we still aren’t 100% sure what we got into….it’s a 15 year note and it’s bought and paid for…steep interest for this day and age but we accept that because our credit sucked. Our plan was to pay it off in 15 years…..

BUT…..my husband is a truckdriver and just took a local job….which turned into a local job 65 miles away. In all reality we HATE the schools where we live and don’t like what is happening to this town. We only bought the house in October but bought it $8000 below appraisal. We would LOVE to live in the town where he is working.

He wants to commute a year and put some money into this house and hopefully sell it for more than we owe. I know his hours and know if any work will be done it will be by me and what I can’t do won’t get done. I can do ALOT myself but not the most expensive stuff — windows and repair bricks in the carport where someone drove through and carpet.

I can do all the plumbing and minor repairs myself.

In all reality, the way this town is shifting it would make the PERFECT Section 8 rental…..that is what I would like to do with it but I have a list of repairs that we don’t have cash to make at the moment. Basically, windows , some plumbing I can do myself, and some “trip hazards” where rooms aren’t level where they join….new carpet and padding would actually probably straighten them out but I’m not sure.

I’ve been curious about some of these “We Buy UGly Houses” type of places…..but we’ve just barely started paying for this house? I have kind of wondered if anyone would offer us a trade for a house over there –a banker type guy that was trying to sell me a different foreclosure the other day was sure I wouldn’t have any problem selling for what we owe on it…..

I don’t know…any ideas? There is also the option of just straight renting it after I finish painting the interior…..I could rent it enough to make the house payment but probably not much more than that since our payments are so high. Although, I have considered “rent to own”, too and be lenient…….

Answer: My vote is to rent it, rent-it-with-option-to-buy, or sell it and move to the town where you want to live. Move there even if it means that you have to start out by renting in the new town.

If you do one of the rental options, you might be able to refinance the property and get a fixed 30-year mortgage, or an Adjustable Rate Mortgage with a low initial rate. That should help reduce your payment and improve your cash flow.

If you do a rent-with-option-to-buy, definitely set the selling price higher than the property is worth and require enough up front to give you a comfortable cushion if the tenants don’t follow through on the purchase or stop paying their rent. There are good people out there who don’t have perfect credit or can’t get a mortgage right away for various reasons. For example, maybe they just got a Chapter 7 discharge, lost their house in the process, and want to own another house. You might be able to help them out, and also help yourself, but you have to charge more (a premium) because you are offering them something they cannot get elsewhere.

These are just some ideas to think about. I don’t know your specific situation.

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