Q & A with Dottie Herman

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Q1 - My husband and I are moving as he was relocated for his job- however, we haven't sold our home yet. Do you think we should also try to rent it? We just don't want to carry two residences and we don't know how much effort our realtor will put into selling this home while we are thousands of miles away.

A - It sounds to me as if you may have trust issues with your agent.  That's never a good thing.  You need to be confident that your realtor is working tenaciously on your behalf - even if you are hundreds of miles away. If you are not comfortable with your agent, then it's time to find a new one.  I would be happy to make any recommendations if you need them.  From what you describe, ideally you would sell this home, since carrying two is not attractive to you.  Focus on that first.  Once you have someone working diligently to get you a qualified buyer, you should see far better results.

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Q2 - I am trying to decide if I should buy or rent in today's market. I am in my late 60's and I am retired and live solely on my assets which consist of social security a small pension along with the money from the sale of my home which was sold 4 years ago which was about $600,000. I am currently renting an apartment and my rent is $2,250 a month.  Should I buy a condo, and if I do, should I pay for it outright or put 20% or more down and get a mortgage? Would I even qualify? I am just very unsure as to what I should do. 
 
A - There are many aspects to this answer that require some financial analysis and decision on your part. What can you own for the similar cost of renting?  Your $600,000 of savings also generates income which would be decreased if you use it to buy a home so you need to consider that impact.  Having cash available for other needs or emergencies is important. If you can find a home that you like and the cost is comparable to renting after using a mortgage for some of the purchase, you will be in a good place as values should increase gradually over the coming years.  Again speak to an accountant, financial planner or mortgage professional to see how these things would all work together.

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Q3 - I currently own a home which has dropped $40,000 in value and I now owe more than it is worth. I have an interest only loan, but I do not have trouble making payments. I don't have to foreclose because I'm not in financial trouble, but I would like to either sell my home soon b/c it's too small or at least try to restructure my mortgage. My mortgage company said there was nothing they can do for me because I'm not in distress and because I can't refinance. What do you recommend I do to try to sell my home or restructure my interest only mortgage?
 
A - Unfortunately if you are not behind on your mortgage, have the ability to pay your monthly payments and have savings to cover your obligations there is little available to you in terms of relief.  Modifications and short sales are loss mitigation methods which are designed to help liquidate a property before it costs the bank more in losses due to nonpayment of the loan. If you would like to refinance your loan there are some loan programs that will allow for a mortgage up to and even beyond 100% of the appraised value, however, they do not offer interest only loans; you should inquire with your current lender to see if there is such a program available to you.

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Q4 - I spoke own a condo in Naples, Fl. that I am unable to re-finance due to the appraised value. I owe 100K and paid 215K in 2005 and it is now worth app. 79K. Is there any way to reduce my loan amount. What can I do to get out of this situation?
 
A - Your options are limited here but you have two possible options to explore.  First is that you can pay down the mortgage so it is less than the value of the home.  There are some loan programs that will allow for a mortgage up to 125% of the appraised value to help homeowners in your position.  These are for owner occupied properties only; you should inquire with your current lender, or a bank to see if there is such a program available to you.

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Q5 - My husband and I are trying to sell our home in Commack; however, we are getting offers that are much lower than what we paid for our home. We have only lived there for 7 years and only put 10% down when we bought the home. Do you think we should pay off more of our mortgage before we move since money is definitely tight for us currently?
   
A - There is no reason to pay off the mortgage before you sell the home.  When you sell the home you will have a firm understanding of how much money will be required to pay off the amount of your mortgage not covered by the sale.  You will need to write a certified check for this amount to your bank at the closing.  Your attorney or the title company handling your closing will advise you as to the exact amount and process a few days before the closing.

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If you have a real estate question for Dottie, please send it to; Dottie@RealEstateChannel.com.
 
NOTE: Due to high volume of questions, not everyone can be answered, but she'll do her best. 

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