How to buy another home same floor plan but $50,000 cheaper? - Loan Modification Forum

Pants · 07-02-2009, 11:33 PM

Can you go buy another home and just walk away from the one that's upside down? Or would the 2nd home purchase be blocked?

We have a 810 FICO and have never missed a payment.

These are crazy times when someone considers this option.

Paul Molinaro Esq. · 07-03-2009, 04:05 PM

NO LEGAL ADVICE HERE - JUST GENERAL INFORMATION - ANY SIMILARITIES TO ANYONE'S ACTUAL SITUATION IS JUST ONE HECK OF A COINCIDENCE.

The process of buying a new home and letting the old one go... is called "buy and dump" and is frowned upon... some frown at the unethical implications and some frown because it can be considered fraudulent (and illegal) in some cases.

- Paul
P.S. Yes, this is a repeat answer... you's guys gotta read each other's posts so we don't repeat ouselves... not that this topic is boring (I live it every day... and I love it), but the value here on this forum is helping each other... which means reading other posts on your topic before posting.

brunok · 07-25-2009, 05:59 PM

You can do it. The balance on your existing mortgage will be a considerable negative when a new lender evaluates your purchasing power though. You can eliminate some of this by renting your place to offset the payment on the first. I think all lenders now require a year contract for the lease before considering.

I looked into this and talked to a few lenders, we could do it but we'd be moving into the same level place because renting it would not cover the mortgage completely and we'd be floating at least another grand.

So subtract what you could reasonable get for renting from your mortgage payment. Then subtract the difference from how much you could get a loan for at %31 of your income. That's how much you are likely to get a new loan for.

The biggest hurdle is - the market is still heading down. You want to get into the same bind in 2 years?

07-02-2009, 11:33 PM	#1 (permalink)
Pants Senior Member Join Date: Jun 2009 Posts: 37	How to buy another home same floor plan but $50,000 cheaper? Can you go buy another home and just walk away from the one that's upside down? Or would the 2nd home purchase be blocked? We have a 810 FICO and have never missed a payment. These are crazy times when someone considers this option.

07-03-2009, 04:05 PM	#2 (permalink)
Paul Molinaro Esq. Attorney Join Date: Mar 2009 Location: 980 Montecito Drive, Suite 206, Corona, CA 92879 Posts: 133	Re: How to buy another home same floor plan but $50,000 cheaper? NO LEGAL ADVICE HERE - JUST GENERAL INFORMATION - ANY SIMILARITIES TO ANYONE'S ACTUAL SITUATION IS JUST ONE HECK OF A COINCIDENCE. The process of buying a new home and letting the old one go... is called "buy and dump" and is frowned upon... some frown at the unethical implications and some frown because it can be considered fraudulent (and illegal) in some cases. - Paul P.S. Yes, this is a repeat answer... you's guys gotta read each other's posts so we don't repeat ouselves... not that this topic is boring (I live it every day... and I love it), but the value here on this forum is helping each other... which means reading other posts on your topic before posting. __________________ ______________________________ Paul J. Molinaro, M.D., J.D. Attorney at Law, Physician, Broker ______________________________ Fransen & Molinaro, LLP 980 Montecito Drive, Suite 206 Corona, CA 92879 pmolinaro@LoanLaw.net 1-888-756-2652 ______________________________ The information contained in this post is NOT to be taken as legal advice. My posts are for general information and educational purposes only. If you need legal advice, please contact an attorney.

07-25-2009, 05:59 PM	#3 (permalink)
brunok Member Join Date: Jan 2009 Posts: 7	Re: How to buy another home same floor plan but $50,000 cheaper? You can do it. The balance on your existing mortgage will be a considerable negative when a new lender evaluates your purchasing power though. You can eliminate some of this by renting your place to offset the payment on the first. I think all lenders now require a year contract for the lease before considering. I looked into this and talked to a few lenders, we could do it but we'd be moving into the same level place because renting it would not cover the mortgage completely and we'd be floating at least another grand. So subtract what you could reasonable get for renting from your mortgage payment. Then subtract the difference from how much you could get a loan for at %31 of your income. That's how much you are likely to get a new loan for. The biggest hurdle is - the market is still heading down. You want to get into the same bind in 2 years?

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