Financing new home

Posted by D. Suen on November 28, 2007 at 09:36:16:

Need advice on the following that was recommended to me
I currently own a town home in CA and am trying to sell to purchase a new home. At our current list price we have about $100K in equity. We owe $225K on the 1st Mtg and $80K on the second Mtg (HELOC) HOA dues are $270 / month. Total monthly costs including HOA are approx $2500 / month. Comparable rents in the area are about $1200- $1400 / month. It was recommended to me that I could take advantage of the situation to bid on new homes from builders that are trying to unload year end inventory by purchasing the new home and then default on my existing town home and let it go to foreclosure. Does anyone have any thoughts on the above strategy? What are the other consequences of the foreclosure other than the bad credit history? How long would that last and would the bad credit rating apply only to me if I hold title on the loans and the house or would it apply to my wife as well?


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