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Renting my house while trying to remodify the loan – do I have to continue to pay the mortgage?
Posted on June 5th, 2010 2 comments
Kristen asked:
So, I’m in the process of trying to have my loan “re-modified” as I’m upside down in my house now (I bought it for $310,000 2.5 yeras ago, I owe $240,000 on it now, and it would only sell for about $210,000 if I’m lucky). So, I’m getting ready to have renters move into the house. They will not be paying me enough to cover my mortgage, but only a couple hundred dollars off. So, here’s where it gets tricky. Apparently to remodify a loan, the mortgage company won’t even entertain the idea until I am approx 3 months behind on payments, so I have stopped paying my mortgage in order to make this happen. BUT – when i have renters in the house, am I legally obligated to send their rent money into the mortgage company? Becasue that obviosuly negates what I’m trying to do. Any advice or insight?
LaurenRenting & Real Estate Advice, Couple Hundred, House Loan, Insight, Loan Company, Loan Mortgage, Lucky, Money Mortgage, Mortgage Company, Rent2 responses to “Renting my house while trying to remodify the loan – do I have to continue to pay the mortgage?”
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No, you are not legally required to pay the mortgage with the rent. Your mortgage and their lease have nothing to do with each other. You would not be breaking any laws.
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John T June 9th, 2010 at 21:58
Well I love questions like this as I am in the Mortgage Industry myself. You are NOT LEGALLY OBLIGATED to send in ANY rent money here but please allow me to be blunt here too. The right thing to do is to stay current on your mortgage or refinancing or even a modification is not going to do you any good at all. Be VERY CAREFUL on a modification because this is NOT for everyone and it sometimes will backfire in your face – LOOK OUT. It sounds like now you are willing to risk your credit and your credit follows you for life PLEASE PLEASE dont allow this to screw up your credit. If you are a couple hundred behind on not making your payments each month then you are in better shape than many others that cant make the FULL Payment. Keep the house, make the payments, and stick it out.
One last thing on the modification that I can not answer is the unknowns being your payment, interest rate and terms. If your rate is over 6% and/or you are on an ARM then YES a modification probably is needed otherwise just make your payments, keep your credit clean and stick it out. The markets will come back
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Wildcat June 8th, 2010 at 12:18