Hojin's SW Orlando Real Estate Scoop

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Should I Stay or Should I Go?

June 14th, 2011 · 3 Comments

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A lot of homeowners here in Dr. Phillips and Windermere as well as the rest of the nation who bought their home during the boom years have quite a bit of negative equity in their home. The options are to ride it out until we see 2007 prices, or just walk away from the house.

I am by no means suggesting not paying your mortgage. Florida is a deficiency state meaning a foreclosure could mean that the bank can sell the deficiency judgment that is valid up to 20 years to a collection agency to pursue your future wages.

You will also not be able to qualify for a Fannie Mae loan for 5-7 years.

If you complete a successful short sale, you’ll be eligible within 2 years and you clear yourself of the deficiency judgment.

Historical appreciation for real estate is between 3% to 4%, so you have to ask yourself… does it make sense to keep paying on a home that is under water?

You could walk away, attempt a short sale, or wait for home values to come back up.

A knowledgeable real estate pro can be a lot of help in deciding which course of action is the best for your particular situation.

Tags: Short Sales

3 responses so far ↓

  • 1 Billygoat // Jun 15, 2011 at 8:48 am

    walk away… do a chapter 7 if you can… i know of several people that paid north of 1 million dollars now the homes are worth 500K and no one will ever buy them, the ones that walked away are happy the ones still paying 2-3 are now divorced. run a way, stay for 3 years save your money go buy for cash

  • 2 Billygoat // Jun 15, 2011 at 8:56 am

    No one got a FHA loan when they bought in DR. Philips or windermere???? an it is not 5-7 years to get a fha loan, they can get a conventaional loan with 20% down or see next from the COV site>>>>>>

  • 3 Billygoat // Jun 15, 2011 at 8:57 am

    Foreclosure with an FHA Loan

    3 year wait before being able to get a loan
    Reduced wait if the borrower can show extenuating circumstances and re-establishes good credit
    Foreclosure with a Fannie Mae Loan

    7 year wait from the completed foreclosure sale date
    3 year wait if the borrower can show extenuating circumstances. Additional underwriting requirements apply for 4 years after a 3 year waiting period.
    7 year wait for a 2nd home, cash out re-financing, or an investment property
    Foreclosure with a Freddie Mac Loan

    5 year wait from the completed foreclosure sale date
    3 year wait if the borrower can show extenuating circumstances
    ** As a side note a deed in lieu of foreclosure follows the same guidelines as FHA’s foreclosure policy, the same as Fannie Mae and Freddie Macs short sale policy.

    When analyzing the difference between completing a short sale or going through a foreclosure in regards to purchasing another property in the future it boils down to the waiting time which is more favorable in a short sale.