Q & A with Dottie Herman

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Q1 - My husband and I recently made some upgrades to our home. We had to take a home equity loan to make these changes possible. Since then I got pregnant and we are out-growing our home. Is it best to pay off the loan before selling the house? If we do not do so, does that money come out of the purchase price?

A - There is no requirement to pay off the loan prior to selling.  In fact, you can have it paid off as part of the selling process using the funds received from the buyer at closing.

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Q2 - I currently have 2 mortgages on my current residence. Is there a way to combine them?

A - The only way to combine them would be to apply for a new loan in an amount that would allow you to pay off the two loans.  This is a very common purpose for refinancing, especially when rates on the new loan are lower than those on your existing loans.

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Q3 - If I am 3 months behind on my mortgage payments can the bank foreclose on my property?

A - Yes, they can begin the process of foreclosure on your property.  The process and timeframes vary from state to state and lender to lender so it is best to discuss your situation with an attorney in your area.  Please keep in mind that lenders generally do not want to foreclose and are normally willing to help you work through any issues to get back on your feet and up to date. Make sure you speak to your lender and explain what is happening; it is OK to seek help from them.  Good luck.

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Q4 - I need to relocate due to a new job. Our house has recently decreased in value and I don't believe we will be able to sell it for what we currently owe on our mortgage? I expect about a 50,000 difference between sale price and monies owed to the lender. Can I take a personal loan to pay the difference? I don't want to do a short sale and I don't want to empty my savings account. Do I have any options?

A - Yes. You can take a loan to pay off the difference on the sale of your home, and this is your best option.  If you have trouble securing such a loan I would suggest you call your lender and ask if they will give you the loan as part of the sale. But you must make sure that they do not make it a short sale or impact your credit in any way before you proceed.

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If you have a real estate question for Dottie, please send it to; Dottie@RealEstateChannel.com

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