Question : what happens in a home equity default when the 1st mortgage is current?
If I can not pay a home equity line of credit with one bank but I continue to pay the 1st mortgage what action does the home equity line of credit holder take? Both loans are up to date, but I will be unable to pay the HELOC much longer. I do not live in the property in question. It is vacant and with a realtor but it is in Florida and the value is dropping almost daily due to the crisis in the real estate market in florida. Should I let the banks forclose?
- asked by crisislooming
All Answers:
Answer #1
You never want to let them foreclose on you,period. I am sure you still have equity in yourhome. You should try and sell or refinance, andyes, they still will refinance you with those latepayments. What you need to know if what your homeis worth and what you owe on the two loans total.If you could refinance the two together and getone loan and a lower rate/payment, you should befine. If you are not going to pay one of them, Ithink the 2nd is what not to pay, but that paymentis probably much less, right?I just realized yousaid it was vacant with a realtor and CONTRARY towhat many think, you CAN refinance even if aproperty has been listed for sale lately. Justchange the status to cancelled or withdrawn andtalk to a mortgage broker that knows the businesswell. Even vacant homes can be refinanced. I wouldsuggest trying to refinance and have your realtorlist this for rent. I am sitting on a vacant homein Cape Coral FL that I already did a cash outrefinance on and it has been vacant almost a year.It sucks to use the equity in the home to keep itgoing but it is better than getting late paymentsand/or foreclosure.
- answered by ScottMortgageExpert
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