Tuesday, April 13, 2010, AM | 2 Comments
Because of the depressed economy and perhaps your jobless situation, you are having increasingly hard time to pay your monthly mortgage. On top of that, your home might not be worth as much as when you first bought it or perhaps refinanced it. Or it has become underwater mortgage and you don’t wanna sell it now but your mortgage monthly payment is getting to be at a point that you have a hard time meeting your obligations.
Instead of refinancing it and eventually lose money in the process, there are other options as well that you would be able to make the monthly payment with more ease.
One option is to ask your family, friends, colleagues and other acquaintances to help you with the installment. The way you can do that is give them equity in your home. If one “investor” can help you, it’s better. If not, then give equity to more than one.
Let’s say you have $200,000 mortgage on a house that used to be worth $500,000 but is now worth only $300,000. Your outside investor might put in $100,000 of cash in return for a 50% or less stake, depending on what you mutually agree on. In essence, you refinance, replacing the big mortgage with a new one for only $100,000, with more affordable payments.
Now it depends how and what you agree on. Whether your new co-owner will get half or a third or a quarter of the take when the house is sold and the mortgage paid off. But at least you would keep your home and pay less in monthly mortgage.
The process is very much similar to Initial Public Offering (IPO) of a company. You buy equity in the new public venture and become one of the so many co-owners.
In a Nutshell
Rather than sit on your ass and do nothing, take an active part in your finances. Find new ways to pay your monthly mortgage. Don’t just start thinking about leaving your home to foreclosure and then your potential bankruptcy. IPO kind of arrangement is an option at your disposal. If you think this kind of arrangement will benefit you, then by all means go ahead and start the process.
Talk to your financial adviser so that you can fine tune the process.Facebook.com/doable.finance