It may go as high as 5.5%.

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I want to release money out of my house, but because i rent it out they wont let me have very much, so i have decided to sell, but i still have a year of fixed rate left, mortgage is with northern rock

Maria, unfortunately no because you signed and agree upon the terms of the loan, the only way that you could have a chance at avoiding this fee, is if you were actually on default(about to foreclose or go bankrupt) then you can talk to the loss mitigation department and rather than loosing more money the lender will be forced to forget the prepay in hopes of selling your property and getting back their money. Now if the lender made mistakes in your loan, or lets say you feel like you were taken advantage at the last minute, example you did not know you had a prepayment penalty and your rate was adjustable until the last minute when you signed, then you can file a complaint against the lender, which is what lots of people are doing lately and they have actually been compensated. But that is a long shot and you will need to seek the expert opinion of a real estate attorney. Good Luck.

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So i purchased an income restricted property in 2006.(it means you have to make under a certain amount to buy in this case $47k for family of 1 or $51k for family of 3) we moved about 6 months ago because my husband received military orders and we had to relocate for school. we now have no intentions of going back. the house has been on the market since and we finally have an offer from someone that qualifies to buy.(remember income restriction) but unless we bring over $22k in cash to pay the difference we can't close. (we don't have $22k, we would have to go in debt via credit cards and don't really like that idea.) on top of that we are competing with new builds in the same neighborhood that are going for $170,000. and the city offering $40k back on certain properties to keep the value up. (example $130k property +$40k back = buyer paying $90k leaving property value @ $130k. in order for us to break even we have to sell for $185,000.(the offer was for $170,000 which after commission and paying the difference leaves us at negative $22k. i don't want to hear about us being irresponsible if we walk away. we had a fixed rate mortgage and have not missed a payment so far. the property was within our means at the time but is no longer since we relocated and have had to float rent along with other household expenses in addition to the mortgage. we've spent about $10k keeping the house on the market, and we're out of funds. i guess i just want to know what the consequences are of a foreclosure? can they come after us for anything? would it be a situation where we would have to pay even more than 20k out of pocket? does anyone have any other suggestions of options? and also if you think we should just foreclose. oh yeah a little more about us: because of the income restrictions there are rules against renting the property out. we have no intentions of buying for a very long time. after this experience we decided not to buy anything unless we can pay it in full out-right. we are currently renting and will be relocating in less than a year. then possibly relocating again a year after that. (not by choice but by military orders) we are a single income family. we have a toddler and an infant, it wouldn't make sense for me to return to work because we would have to pay for child care. and most importantly my #1 priority is to take care of my kids right now, i didn't have kids to let someone else raise them. if they were school age it would be different because i could work while they were in school. so please don't question my work ethics. i grew up in a household where both of my parents worked 2 jobs and the end result was not good. i'm not willing to trade my kids to finance a place i no longer live in or even care for. you can call it a priority in family ethics.

You will lose the 22k either way. If the lender forecloses on you and they sell your property for less than what you owe they file whats called a deficiency judgement against you. It is a real judgement and you have to pay it back. SOmetimes they take payments on the amount owed but remember when there is a foreclosure you will get hit for the realtor fees, legal fees (ouch) and back property taxes. Just take the offer or try to negotiate even an extra 3K in your favor. Then ask your realtor to decrease their commision once the contract has been accepted. It sounds like that market will get worse overthere. Don't play around.

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I bought my house in feb 2006 for 152k - lower priced end of range for the area - 100 yr old house - 7% fixed rate regular mtg - no down pmt. stupidly overpd for new windows july 2006 - now - total owed on 2 mtgs - about 160k - prices have gone down in my area - i figure i might be $20-30k in the hole. total mtg pmts 1360, i rent one room for 400/mo and save maybe another 200 a month from excess itemeized tax deductions - 25% tax bracket. my payments are on time, it's just i feel trapped in the house - i could probably find a similar sized douse in my area for 130k and reduce my monthly payment, but i doubt i would be able to break even on this house for many many years - including re sales commission, i'd have to sell for $170k to break even - $40k more it's probably worth. there is no need for me to move at this time, i just feel frustrated - even buying a lower ends house, i still wound up buying right before the market tanked. has anyone in my situation ever been able to renegotiate with their mortgage company and reduce their mortgage balance and stay in the house. i'm not sure i could even afford to do that since i would get whacked with a $7-10k tax bill for teh $30-40 "forgiven debt" - any chance of anything good happening for me in trhis situation? bob

Why on earth do you think the lender should swallow some of what they loaned to you, simply because the value of the collateral has gone down ? Do you feel the same way about a loan on a new car, which is ALWAYS that way ? Houses are no different. There is no guarantee that they will retain value or go up in value. You are advised to continue to make your payments, stay in the house, and quit thinking you are owed something.

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I bought a house 2 years ago, at the peak of the market. according to zillow and rough estimates from appraisers, without an actual appraisal, i have lost over 80k on the value of my home. i have an 80/20 load and im paying interest only right now with a 6.875% on the 80 and the 20% is an arm which is down to 5.5% now. started at 10.5%. i have locked in a 4.5% fixed rate if i re-fi, and get down to 90% loan to value ratio using my va benefits. i would need 110k to be able to re-fi. this i do not have. i have not missed any payments, but on paper, my mortgage payments are about 54% of my gross monthly income. i rent out all my extra rooms to get by which helps significantly but i dont want roommates for the next 28 years. i dont know the details of this bailout nonsense and i dont even like the idea of the bailouts. however, if i can get my tax dollars to actually benefit me for the first time, i will gladly take advantage of the bailout. in three years my 80% loan is going to adjust and raise my payments significantly. it will do so every 5 years after that. i am not struggling to make my payments, but if i dont have tenants, it will be very hard to get by, especially after the adjustment. who knows what my 20% loan will go to when interest rates start going back up. do you know any more about the bailout and if it sounds like i will be eligible? please dont mistake me for one of the a-holes who bought a house with shitty credit and no income. i bought the house with a friend, not realizing the market would crash, or that 6 months of living together, we wouldnt be friends any more and i would be the one to be solely responsible for the house. i have great credit and make good money, but because i bought it with a friend with the intention on living in it for a couple years, fixing it up and selling it to at least break even rather then throw away money for rent, i now am stuck in a pretty shitty situation.

Contact your lender, ask about modification. The Obamaloans, or HASP loans require you to meet minimum debt ratio criteria and most lenders wont accept room rent as a form of income . Best bet is to call and find out but the Obamafication will not work unless you owe between 95-105% of your property's value and it looks like its depreciated further than that. There are some modification options available besides for the federally sponsored ones. Best of luck to you.

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My wife and i just refinanced our mortgage from a variable rate to a 30 year fixed, which we thought was a god move. unfortunately, two months later we were hit with the reality of having to move south to obtain new job opportunities (i have been laid off for 10 months with no job placement success, yet our moving location job prospects are highly interested in hiring me). we have a place to stay for free while we are down there (1 year with a friend) and we finalized on renting our townhouse because the housing market has made it that we have to go to closing with about $20k out of our pocket. in our mortgage the affidavit of occupancy we signed stated it being our primary residence with "no present intent to rent it". it also states that since it is our primary that we cannot rent it for any reason. how do i approach this so that we may be able to move to the south for our jobs while keeping our property until the market regains itself without breaking our bank? i also want to add that when we refinanced we were 100% under the impression that we would plan on staying in the townhouse as our primary residence. i had 3 job interviews that were in the "offering" stages, yet all three fell through after our refi. with the birth of my second daughter, we began researching day care prices locally and found out that the prices for daycare were astronomical, so we had to make the last second decision to make the move south. i know the loan agreement says that upon signing that we had "no present intention" to rent it, but two months later that became the reality in order for us to afford to keep the property without having to spend $20k+ at closing which we do not have currently in order to sell the property in today's massachusetts market. i am so confused on how to approach this situation the legal way so that i do not get in a big mess with the irs and with the legality of our signed mortgage contract. any advice is very much appreciated!

Your mortgage company and the IRS are two different concerns. The IRS doesn't care about your contract with the mortgage company, they only care if you properly file your taxes concerning the interest and income from renting your property. The bank, on the other hand, might care. But they might not. And because you probably have a year before you report anything about this to the IRS (it doesn't sound like you have rented it yet, no income, no worry), I would just risk it. In this day of foreclosures and plummeting property values, it is doubtful your bank is out knocking on doors and checking to see if the people who signed the loan are living in the house, unless, of course, you start missing payments. Set up a post office box at a place that will forward your mail to you, (you might try the UPS store, or someplace like that), change your address before you move to the p.o. box and you should be ok. Good luck, I hope the job market "south" is as strong as you think it is.

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Before you answer consider this. their are 10 homes on your block 1/2 of them are foreclosure properties and are on sale or have sold for way less than your property is worth. your property values keep on dropping and dropping and dropping. the foreclosures are left on the market for month, empty, growing weeds, kids break in to them, hobos live in them, further bringing down the neighborhood values. know consider your job is sending you to another state, so you have to move, if you don't you lose your job. you have to sell your home, but even though you've kept up with your mortgage, you the right loan a fixed rate low interest maybe 5%, you're house is worth less than your mortgage. you can't sell it,and the neighborhood has gone down so you can't even rent it for what your mortgage is, so what do you do? so who suffers more, the homeowners who abandon their home to foreclosure, or the homeowner who has a home, doing everything right, but whose home price keeps going down. i've worked in real estate and had something similar to this happen. she did what was right, had to move, but couldn't sell her home. i can still see the for rent sign up when i drive by, until it became an reo. her job, the military? (this question is concerning obama's plan) when the homeowner moves out, they aren't just cast on the street all the time, they can just rent a property. but if you read the homeowner who stays behind, if they need to move and can't wait for the market to turn around, they get screwed because they can't sell their home

I can only speak for the neighbors. Our next door buddies moved out in the middle of the night. They trashed the inside of the house (we actually live in a very nice neighborhood). We went in to backyard and the weeds were literally as tall as the fence. From that point on, we took turns mowing and such to keep the house looking decent. Our home percent certainly went down because of that. Thanks goodness and investor came in and redid it and rented it out. Rentals are usually bad things but this family seems to be really taking care of their property. As far as the people who snuck out, I could give a damn about them. Cowards. THey spent money they did not have. I know this because their trash constantly blew into my yard, and most of it was a letter from this bank or that credit card company. The woman drove a Navigator. The man drove a Caddy.

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I own a rental property for 6-7 years and always has negative cash flow. i continued keeping this rental property in order to use as tax deduction since i don't have any home mortgage. i live in a house that already paid off by my parents whom are living oversea. i purchased this rental home for $295,000 and put $60,000 down. the current home value is $207,000. i still owe approximately $213,000. my mother will give me $100,000 to put down towards the mortgage, so i will owe $113,000. the mortgage company will do recast modification for $250 if i put more money (minimum 10% of unpaid principal balance) to the principle. recast is a process when the lender recalculate the principal and interest portion of the loan by keeping the same interest rate and the same maturity rate. my original loan is 30 years fix at 5.62% this will bring down my mortgage from $1,358 to $724 per month. this means that i will save $634 per month. i received $1200/month from the rental for 3 years, and $1,600 in the last year. the insurance, hoa, and property tax is $400/month. i have to be able to rent the house for $1,758 to break even. however, i still has negative cash flow. i have talked to friends, and there are two opinion. one group said to put that $100,000 toward principle since i don't want to walk away from the property. i can afford the difference. this way i don't have to worry about finding the rental if my rent is comparable to the house in the neighbourhood which are renting at a lower price ie. $1,400 -$1,500. another group of friend told me not to put any more money down since i owe mortgage more than it is worth now. they said i can put $100,000 in a better and nicer home and rent for more money. my mother has half mill. in cash and her $100,000 that she wants to help me currently earn 0.5% in the bank. i don't know which way is better. should i put more money in an upside down rental home that i would not want to walk away from it (don't want to loose$60,000 down payment. i will keep it until the price come up which who knows it will be the next 10 or 20 years. incase of earth quake, and my home vanish, i probably will loose my down payment plus this $100,000. what if the housing market is getting worse and my rental house worth $150,000? i probably loose that $100,000+my down payment. if the housing market is stable or improve, i probably won't hurt that bad. i have earth quake insurance too. my tenant will be leaving this june. i am preparing to rent my house $1,400 if i have too. thank you for reading. your comment is appreciated.

I would use the government to help out with the upside down mortgage. There is a new government grant for people with these upside down loans. I believe you have to owe 125% of your current market value. Which you don't but you may be able to find a loop hole, or borrow a second mortgage, just enough to make it the 125%. Then the second mortgage can be taken care of by the grant and then you use that money to pay down your first mortgage. As for the property. I would not use your mothers money to put in to something that has a negative cash flow. It is doubtful that the market is going to change anytime soon. If you want to do something with your mothers money, you should invest it in vacant land, because that is the only real estate that is still going up in value. Houses and apartments will turn to a new direction before they will see appreciation again. They will go to sustainable housing before they go in the right direction again. If you take a close look at the housing industry, the houses that have solar electric, solar heat, and passive solar heating are the ones least hit by the economy. Many of those have kept their value, because there is not as much money going out in utility bills which is good for the buyer. Less money going out to utilities means more can go out on the house.

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My situation: i own a home in gainesville, fl which i rent out to students every year. currently i am paying $805/month to cover the mortgage. mortgage is 1796 and i am renting out for 1200. i cannot raise the rent due to the horrible rental market. the home is worth between $150,000-$160,000. i currently owe $178,000 on it, i took out the loan 2 years ago for $180,000. my current fixed interest rate is 8.4% but after september 1, 2012 it will become flexible and go up to a max of 15.4%. my questions is if i should short sale now or keep on paying the $805/month and try my luck in late 2011 to sell or if i should cut my losses now and do a short sale. the house is really hurting my finances and if something were to break like a plumbing issue or an a/c or roof repair i am in deep trouble. please let me know your thoughts... additional details key words: short sale foreclosure bankruptcy short sales foreclose

The bank is unlikely to agree to a short sale, it would be better to foreclose adn then come after you to pay the deficiency, since it is investment property. This was a lousy investment, I can't imagine what possessed you to buy it. I would try to wait it out until 2012.

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Im a first time home buyer. i am a otr driver. i am out working 355 days a year. i take 1 week off to visit family back home. the dept of transportation allows me to deduct from taxable income a flat rate of 45? dollars for everyday im out on the road..away from my home state. i claimed about 37.00 a day..itemized on my return. i also have other deductions to my taxable income. the issue is.. my mortgage broker is stating that the underwriter is making me show my tax returns for 07 an 08 to see if i qualify for a home loan. i made 53k , i had 20 k in deductions. i couldve taken more but thats a gray area , recpts etc.. anyway.. i am not a self employed person.. i have w2s. i applied to the underwriter , got approved for 72k. i negotiated the purchase price, and such.. got my loan down to 56k & seller contribution of 2k, add in an 8k rehab loan, brings my tally to 64k, add in 12k closing etc. bottom line. my mortgage guy locked me a rate at 5.5 fixed 30 etc. amazing..its till the 1st of march.. our closing goal is the 20th of feb.. as i said i had a preapproval.. i signed a contract , (theres alot more details about the contract).. paid for inspection, and appraisal. now mortgage guy tim.says he put off ordering the survey as i may not qualify now.. i ask why am i being forced to show tax returns, just because my occupation is trucker?.. if i made 53k a year and say paid rent equal to my truck pmt.. 652 , and ,my util budget is 232 a month. i make around 4144 a month. i gotta eat, like eveyone else..only i get a tax break on daily expenses.. meals etc. my mortgager lied to me saying an appraisal had been ordered when it has not ..that was 9 days ago.. now i found out that the realtor.. my realtor stated ..c.mort group has ordered the appraisal, then see hand writen order but am told by morgage co. that it wasnt ordered. everyone else whos not a *truck driver..gets to take w2s to fha and show bills etc, get a loan. but for i .. i am required to show all my tax return even tho i am not self employed and i get most of my tax pmts back by itemizing.. well the house sits and i am left with 725 spent for inspection and appraisal and now even tho i had a prequal letter, a signed contract and 30 days into the process.. my mortger says i dont qualify.. is there a way around this. thru it..etc the purpose of buying a home now is the market, my age and family needs. i plan to be home more and my work is slowing down a bit. ive been a driver for 7 years. didnt want or need a home, stayed out on the road. cheaper. independant now.. my family has no housing.. i have the ability to have a full house again. and yes..tax deductions.. equal amounts better investment.. the reason the underwriter is asking for the returns...because i stated truck driver as job. i also wonder..could it be also because im female? if only my ahem.experienced mortgage broker listed me as freight engineer or relocation specialist or professional commodity relocator..? im just barely at the qualifying line. as tim says. hes asking if some of my *depreciation? can be added back.. like half my meal per diem deductions. im 130 lbs 5.5 , healthy.. i do not eat 45 dollars of food a day. lol. but i am allowed to deduct it. im wondering what would happen if i ammended my return , gave back the piddly 2k i got in refund pay taxes..lol thanks for the support.. i really appreciate someone elses view of this i am not self employed. thanks for the confirmations on the tax return question. as for being a tax evaider. ha. not. i worked 355 days this year. worked holidays and also a team driver. yeah it cost me 20000 to make 53. oh btw.. i redid what my taxes wouldve been if i claimed only 8000 in perdiem for the year.. i would only owe 350 over what i paid..bummer.. guess i could ammend my return. not. my net income is 29k after redoing the taxes. i would have to give back 2005.00 and another 350. this is being considered. i have time to get more capital. im actually 2 weeks ahead of schedule as per the contract. but..i would rather have the writer make the adjustment on thier end. less paperwork. and i dont want to give up 2k. i do have till april. spose i could sell my soul to irs and take the buyers credit. use the money to tidy up my ammended return? whatever..

I have never done a mortgage for an OTR truck driver that I didn't need 2 years of tax returns. You answered your question. You made $53,000 but wrote off $20,000. Your income is $33,000 unless there is depreciation to add back in. Commissioned sales people are the same. Must have tax returns. What is legal in IRS' eyes does not help you when buying a home. You are saying it cost you 20000 to make 53000.

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My husband bought our home before we were married back in 2005 when everyone was telling us to ‘hurry up and buy!” over the years our payments went up, the first time was because when we refinanced with countrywide they made a ‘mistake’ on our escrow payment and the other two were interest rate increases. our payments got too high so we entered a forbearance program. the program was for a limited time and after it ended we continued to struggle. counrtywide had no options for us so we just paid what we could, usually about half of our mortgage. most people would have stopped paying and saved their money but we were trying to show effort (dumb). we started getting foreclosure notices and prepared for the inevitable. we talked to a number of professionals and it seemed we had no options. after receiving a slew of foreclosure notices we lined up a rental, made or security deposits and signed a lease. this week, we packed up our entire home, we even let our friend come dig up the plants and trees we had put in over the years. yesterday, countrywide calls us, due to the bail out they can offer us help now…..argh! i should be excited but what am i supposed to do now? they want to see if we qualify for a hud loan. is a hud loan worth it? what if after 5 years we go to sell and there is a small to no profit? what if after giving them the 50% we are not left with enough to buy again? would it be better to rent for substantially less and save during those five years? i feel like we have continued to do the right thing but kept getting screwed. now i am scared to follow up on this option and i feel helpless. we put a lot of money into this fixer upper and it breaks my heart to let it go but is it worth it to keep holding on? at this point what am i holding onto? the house is worth less now all fixed up then what we paid for it in an unlivable state. what would you do?

HUD does not lend money, so whoever you are talking it, it is the wrong person. It sounds like when you "trying to do the right thing" you screwed up and got yourself an ARM loan. The "right" loan for a homeowner is a fixed on.