Loans, Debt & Credit - View Single Post - Advice needed for home where value has dropped 60%?

NotWorthAsking · 08-05-2009, 09:32 AM

Looking for advice on what we should do...we are able to make our payments each month, but the decrease in value means keeping our mortgage appears to be a bad plan, versus getting out of it and just renting for a few years and saving the difference of over $1,000 a month while renting...

Purchased home in Dec 2006 for $334,000.
Current appraisal (from our county) is $130,000.
We have $10k paid in principal, so the value to loan amount ratio is 249%.
Lender is Wells Fargo, and our loan is FHA insured.
Interest rate is fixed (6.5%)

The loan is extremely upside down; but we don't qualify for any government programs (because we can afford our current payments, and the value to debt ratio is so high). We're not sure how much difference (if any) we'll be able to make by applying for a modification and are thinking about going straight to Short Sale or foreclosure.

If anyone has expertise/experience with this sort of situation, we are interested to hear your thoughts on how to proceed.

Thanks!

08-05-2009, 09:32 AM	#1 (permalink)
NotWorthAsking Junior Member Join Date: Aug 2009 Posts: 3 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Advice needed for home where value has dropped 60%? Looking for advice on what we should do...we are able to make our payments each month, but the decrease in value means keeping our mortgage appears to be a bad plan, versus getting out of it and just renting for a few years and saving the difference of over $1,000 a month while renting... Purchased home in Dec 2006 for $334,000. Current appraisal (from our county) is $130,000. We have $10k paid in principal, so the value to loan amount ratio is 249%. Lender is Wells Fargo, and our loan is FHA insured. Interest rate is fixed (6.5%) The loan is extremely upside down; but we don't qualify for any government programs (because we can afford our current payments, and the value to debt ratio is so high). We're not sure how much difference (if any) we'll be able to make by applying for a modification and are thinking about going straight to Short Sale or foreclosure. If anyone has expertise/experience with this sort of situation, we are interested to hear your thoughts on how to proceed. Thanks!