Can't sell house, bought unfinished, can I strip it?

[justalayman]

I thought it was closer to $40K when I made the unclear comment.

if he lets the home go to foreclosure, yes. I went a bit passed that and was speaking to the $7500 he would have to pay to make the current offer go through. Yours is a cancellation of debt through BK. Mine is an actual cost to avoid BK.

have an offer on my house that puts me about 7500 in the hole at closing.

 

[Zigner]

OP bought a property and agreed to certain payment terms on the loan.

OP's situation has not changed so that he can no longer afford the payments. Rather, the OP desires something different as a matter of comfort or convenience. The only hardship here is caused by the OP willingly purchasing ANOTHER property while still having a commitment towards the first.

OP now wishes to deprive the lender of the deal that was freely entered in to.


I really don't understand the situation here...maybe I'm just old fashioned. It seems to me that the OP can simply continue to pay as agreed instead of assuming that his own convenience is, somehow, of greater importance than following through on the commitment. Or, the OP can pay the small additional amount ($7,500.00). Why is it the OP feels entitled to walk away without any penalty?

 

[Jdsmitty10]

Situation has changed. I mentioned I took a $22,000 paycut and told the bank that when attempting a loan mod. I also moved 2 hrs away from the property. It sits empty. Rec'd a rental application this weekend. Hopefully they turn out to be a good candidate and we get it rented out. That leads to my next question. If I rent it out for about $100 less than my mortgage payment will the bank give me a loan with proof of a renter paying the majority of the payment? Ideally I rent it for a few yrs and then sell for profit. I just didn't really plan on becoming a landlord when I bought this house...

 

[Jdsmitty10]

And also how is leaving the property in the same exact condition as the day I bought it depriving the lender? I bought it/it was appraised with no carpet, no deck(had board on wall already for one which I would leave there), no kitchen appliances, no finished basement, no yard either which I did myself... I don't understand how that is any of the banks business? I wouldn't trash the place. I would take what I put into it out. But of course that is all worst case scenario...

 

[justalayman]

If I rent it out for about $100 less than my mortgage payment will the bank give me a loan with proof of a renter paying the majority of the payment?

that is up to whatever lender you apply to. They will use your income, expenses, and other debts and work some magic on their calculators and tell you what they will loan you. No way to even guess from here what they might lend.



don't ignore that if you become a landlord, you need to have insurance designed for a rental. You also will have to maintain the house when it is required. You can't put it off like you could if you lived there. There is also the possibility of having bad tenants that tear up the place or skip on the lease.

There are a lot of possible problems with renting the place out.




as to removing parts of the house;

as you could have read; so far it hasn't been shown that is it likely to be illegal to take out things you added after the loan was secured. If the house is foreclosed on, there is that recourse issue where the lender can still come after you for any losses realized from the auction. Due to that, causing the house to be worth less doesn't make sense, at least if the lender tends to go after such deficiencies. All that would happen is you got to pay them more because of what you took. Doesn't make a lot of sense to me.



Personally, if you can get out with the $7500 loss you spoke of, that might be the smarted move. You don't have any commitments to a house 2 hours away. You don't have to deal with a hit on your credit report. You don't have to deal with the concern of holding that mortgage affecting your qualifications for a construction loan.

 

[LdiJ]

And also how is leaving the property in the same exact condition as the day I bought it depriving the lender? I bought it/it was appraised with no carpet, no deck(had board on wall already for one which I would leave there), no kitchen appliances, no finished basement, no yard either which I did myself... I don't understand how that is any of the banks business? I wouldn't trash the place. I would take what I put into it out. But of course that is all worst case scenario...

You obviously did not understand some of the things that were said in this thread. I will try to explain as simply as possible.

PA is a recourse state. That means that not only is the home collateral for the mortgage, but you are also personally liable for the mortgage principal. If you walk away from the home and the bank forecloses, you will be held responsible for whatever they cannot collect on the mortgage when the bank sells the home.

Therefore if you "strip" the home, all you will be doing is lowering the amount it can be sold for, and making yourself liable for the remainder. So, even if you could do that legally, it would be an incredibly foolish thing to do. Plus, for the most part the value of whatever you "strip" won't be worth the work to strip it. You could take any appliances that are not built in, because those are not automatically part of the house. But ripping out a deck or unfinishing the basement would net you almost nothing, and be a ton of work.

 

[Jdsmitty10]

Taking deck off which is composite(expensive) and putting on my new house would be worth something to me. Yes it would be a pain but I paid big bucks for it. Same with the appliances. I'm not concerned with the basement. That's just carpet and tile.

 

[LdiJ]

Taking deck off which is composite(expensive) and putting on my new house would be worth something to me. Yes it would be a pain but I paid big bucks for it. Same with the appliances. I'm not concerned with the basement. That's just carpet and tile.

I can understand your point of view about the deck. However, what you would gain on ripping out that deck and putting it on your new home is almost guaranteed to be far less than the increase in personal liability for any mortgage shortfall you would incur when the bank sells the house.

Again, you would be free to remove any appliances that were not built in. They would not be considered to be part of the home if they are not built in, and can be considered as personal property, just like furniture. However again, removing them might incur more cost to you than leaving them there.

 

[FarmerJ]

If you can get this home rented out please make sure you get first last and dep in cash, I say first and last months rent because then should a tenant not pay you can start your states procedure to get them out for non pay even though your holding last months rent and cash when they are new tenants because cash cant bounce. DO not grant any so called grace period for the rent to be paid with out a late fee . You can word your lease that you are to have the rent in hand by the first and if its not then late fee applies . Very last here even if your 120 miles away your going to have to find time to check on the house every now and then. ( take pics of the house before the tenant moves in too )