I have a question about equity in your home. If you owe more than the home has been valued at by around $14,000 what do they do? Will they automatically want our home because we owe more than the value or what? I'm really lost on this one. I've read something about upside-down loans but once again I got confused. Any help on this would be much appreciated. Thanks!
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"Try to save money. Someday it may be valuable again." - Anonymous -
How Much
The amount of equity that you may keep in your home may be determined by the state that that you file. I am assuming that you are considering a Chapter 7.
Because you are upside in your home you should consider moving to a rental home and saving up a downpayment of at least 20% so you do not have to pay for MIP. While you get that clean up your credit report and rebuild credit very
prudentely. Also consider what actions you took to get where you are today.
Remember to get a different outcome you must change how you handle money. A good source of information that works is the Dave Ramsey radio show. It my hurt at first, but it works. Just like execise.
I hope this helps.
emoney -
Extra note...
Moving to a rental home would not only be stupid on my behalf, but downright going backwards. Our mortgage is only $330.00 a month. I couldn't even rent a 2 br apartment in this town for that much."Try to save money. Someday it may be valuable again." - AnonymousComment
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Are you current on your payments?
If so, since you are upside down, so long as you keep making payments, the bank is not going to care. In fact, the bank will WANT you to stay in the house and keep making payments under the circumstances. How long do you intend to stay in the house...real estate values ebb and flow, if you keep the house in good condition, at some point the value should bounce back. Also, you own the house, it would not be very smart to move out, if its cheaper for you to stay in the house than to rent.Comment
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To your reply..
No we have never missed or been late on the payments. The mortgage was number one priorty bill for us monthly because we know we couldn't rent any cheaper. We do intend on staying here for well...ever I guess. I was more concerned about the lawyer and trustee, what they would think, having a negative equity or in a sense being upside down. We owe $35,000 the house is valued currently at $21,000. So would that mean we have no equity and therefore not exempt, as in we couldn't keep the house in the eyes of bankruptcy? Thank you for the advice!"Try to save money. Someday it may be valuable again." - AnonymousComment
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Quick question, is this a mobile home, or real property. In either case, since its your primary residence, you will have nothing to worry about. I only ask whether its a mobile home or not because in most states, different rules apply, i.e. the exemption amounts are different, but because you are upside down it doesn't matter, the home will be exempt.Comment
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Where do you live? I've never heard of an area with homes valued at $21,000. Certainly not where renting would be more expensive. Is this a mobile home?Comment
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Extra info.
I live in Texas, specifically smack in the middle of the coastline, so this is why I would never want to risk losing the home and have to rent. It is a real home not mobile. Thank you all for your answers, when I was just lurking on this site....erm okay stalking is more like it, I have learned such valuable information. This place is great!"Try to save money. Someday it may be valuable again." - AnonymousComment
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Who did the appraisal? It's pretty odd to be upside as much as you are, 40%. That is why I asked if it was a mobile home because you don't see that kind of depreciation in real estate.
But in any event, you won't have any equity issues asuming you really are 40% upside down.Comment
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