How bad is it to go into foreclosure on my vacation home?Will it just ruin my credit and for how long?
Do I have any other options? What is a short sale and is it hard to use this option? I can’t afford my vacation home mortgage and I’m thinking about walking away. Do I have a better option than this?
Tagged with: home mortgage • Short Sale • vacation home
Filed under: Foreclosure Options
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Depending on the market your cottage is in, you may not. It is an unfortunate fact of life these days. Your other option is to sell it for less than you owe, but if you don’t have the cash to make up the difference you’re out of luck. I would start by contacting the bank or mortgage company that holds the paper and explain your situation. They might offer some relief. Banks do not want to foreclose. They are lenders not realtors or property managers and they probably have more foreclosures on their books than they want already. I’m sorry this happened to you. It seems to be an epidemic right now. Remember, even if you let the bank take the place and your credit is trashed, it will be over and credit ratings are over-rated to begin with and can be rebuilt quicker than you think.
Good luck.
Oh and if anyone tries to solicit business from you on Yahoo Answers claiming to be a "lender" or "realtor" , I would block them. No professional worth their salt would be so revoltingly sleazy.
Where is your vacation home? Have you Considered a lease option? Please let me know I am looking for a good vaction spot. Don’t let this ruin your credit. traycn99@yahoo.com
It is BAD! Yes it will help ruin your credit – you would be better off putting it on the market and taking the offer. Better to lose a little than a lot. If it is in an area that has lots of vacationing going on then you could contact a management company and have them lease it for you weekly, monthly for other vacationers. You will have to pay the "management company" to do this, but it will certainly be profitable in 2 ways, you will have some income to help offset your debt, and you won’t ruin your credit. Have you tried to refinance? You might check to see if you can do a "rate and term" refi on your home you use as your permanent residence and maybe lower you payment there. I don’t know too much about your particular situation so hard to advise any more thoroughly. You can ruin your credit from foreclosures for up to 3 years depending on the lender. There are some that won’t even consider financing you at all with a foreclosure. I think the worst case is it stays on your credit report for 7 years.
Good Luck!
Don’t let your vacation home go. It will destroy your life. Now you can do a bankruptcy. washes away everything. start all over.
Do not walk away! Speak with the lender and try to work out something like a "short sale." A foreclosure will reduce your credit score by over 200 points but a short sale will reduce it by about 100 points. Speak with a good REALTOR who may have some investor clients interested in your area or check with a real estate auctioneer.
Another possibility is to rent the house for a couple of years until the market recovers from this downturn. The worse thing you can do is simply walk away from it — that will hurt you badly.