Underwater mortgage loan?? (interest rate, real estate, credit, rate)

[MSMCGirl]

Hi...I am underwater on my mortgage (bought in 2005). If I sell now, I would probably come in short by about $20,000. I would LOVE to buy a home in this market however...and when I bought my home in '05 I bought way below what I was qualified for. I also have a very stable job and income.

So...I'm willing to take a loss to get out of my townhome and into the home/neighborhood I want to be in. Does anyone know if there are any loans out there for people with excellent credit who need to make up the underwater "gap"?? Something low interest (vs a personal loan that could be 7% or so). Or has anyone heard of help coming from the government since SO many people are underwater?? If help came along, I REALLY think the real estate market would improve as more people like me would sell and buy again!!

Do not want to do anything that might hurt my credit (ie short sale)!

Thanks!

[bbronston]

At $20,000, you are not that far underwater. In your case, you might be able to negotiate with your lender to sign a note for the $20,000 (or pay it off if you can) without impacting your credit and purchase the new home (possibly with the same lender) just as you would in a normal situation. If you buy the right home, at the right price, you will probably be at a much lower interest rate and it is not unreasonable to expect that you will be able to make up the $20K on the new place once the market turns around.

[MSMCGirl]

Thanks for reply. I guess $20k isn't that bad...I've heard it's not easy to negotiate with banks/lenders to forgive difference?...but worth a shot! Thanks!!

[manderly6]

Originally Posted by MSMCGirl

Thanks for reply. I guess $20k isn't that bad...I've heard it's not easy to negotiate with banks/lenders to forgive difference?...but worth a shot! Thanks!!

I'm not sure you are going to have much of a shot at forgiveness.