possible foreclosure

[truebluemd]

What is the name of your state? md

purchased a home for 275k and now I cant afford it anymore. Home is only worth 275k so no equity. I cannot afford the payments What is the best solution to get out of this? What happens to me if I go into foreclosure?

[JETX]

Originally Posted by truebluemd

purchased a home for 275k and now I cant afford it anymore. Home is only worth 275k so no equity. I cannot afford the payments What is the best solution to get out of this?

There is no BEST solution.... but the one with the least long term impact on you would be to price the property to sell, even if you take a hit on it.

What happens to me if I go into foreclosure?

Several possible outcomes:
1) You get sued and creditor pursues your non-exempt assets, or
2) Mortgage company files a 1099-C on your 'windfall' (released debt) and IRS collects taxes, or
3) Nothing at all.

[truebluemd]

I think I better try to hang in there. I think I am just panicky. Ive never paid this much in rent/mortgage before. I can always rent out the extra room in the basement if worse comes to worse.


I was told that in the first tax year after purchasing, I can write off all of the closing costs and interest. Is this true?

[VeronicaLodge]

why dont you just try selling it, you say its still worth pretty much what you owe on it.

[Grandma's house]

Originally Posted by truebluemd

I was told that in the first tax year after purchasing, I can write off all of the closing costs and interest. Is this true?

You need to take the H.U.D. Settlement statement to your accountant. You cannot write off ALL of the closing costs but some. Points and some of the fees
1.) Origination fee
2.) Broker Fee
3.) Discount fee
4.) Processing fee
5.) the number of days of interest held
6.) title cos. closing fee (if any)

Your accountant will tell you too which he feels you can and WHEN. Sometimes spread over 3 yrs.

These are considered points and/or PFC (These also effected your APR as well)

All fees with a PFC initials next to it. (The ones listed are about all that are) Prepaid Finance Charge (this is interest) and this form along with your interest paid statement you got at end of year you can write off.