Minivans a good family-car buy?
Minivans aren't cheap, but they may be worth it for your family (Question #4). Also in today's Reader's Mailbag: saving for school (#1), splitting mortgage payments (#6), and finding a credit union (#8).
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Essentially, you’re asking what kind of impact walking away from your home and your mortgage will have on your credit. It will have a very serious negative impact on your credit, as the mortgage will be marked as being in default.Skip to next paragraph
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What does that mean? Negative items on your credit report have the greatest impact right when they appear, and that impact slowly shrinks over time, eventually disappearing after seven years (for most things). In your case, your credit will be completely shot for a year or two and will slowly begin to recover after that.
My suggestion is that you have a conversation with your lender before considering this move. Obviously, they are not going to want you to walk away from this, either – they don’t really want the deed to your home. Many banks are working with the people who own these homes to come up with better lending arrangements for both parties.
Q8: Finding a credit union
I’m looking to refinance my condo. Unfortunately, I own two companies and my W2 situation is a mess because one was started less than 2 years ago. That means despite having a 800+ credit score and over $100k in savings, my local banks computers just bounces back my application. I was told to try a credit union that doesn’t do automatic processing and I would probably have better luck. My question is how do I pick / research a credit union? There’s a lot in my state ( Illinois ) and city ( Chicago ). While there are a few reviews on yelp, they are few and far between.
Is there any place that rates / reviews credit unions?
My suggestion is that you simply ask around your social network. Ask your business associates what credit unions they use and recommend. What shops do good work and which ones have a bad reputation?
I tend not to trust online review aggregations from anonymous people because so often there are employees and owners putting up bogus positive reviews and competitors putting up bogus negative reviews.
Q9: Leaving an underwater condo
My wife and I each have identical condos, same lay out, same neighborhood. She bought hers for $200K, and I bought mine for $250K each with a 5/1 ARM loan. Her ARM came to term last year and is paying 3 points on top of the LIBOR index (luckily the LIBOR is very very low for now). My ARM comes to term next August with the same terms, 3 points on top of the LIBOR index. Refinancing is tough right now because we are underwater on both condos. But we are making our payments on time with no problems and don’t neccesarily have hardship. We don’t fall for any government funded help through Freddie Mac or Fannie Mae, so it seems we are out of luck there. We are currently renting her condo and living on mine. Our ultimate goal is to buy a single family, or townhome. My question is how should we go about this? Short sale both condos? Pay off her condo as much as possible to build equity, then sell it, or just continue to rent it and try to pay off the smaller loan then refinance? Short sale my condo, and live in hers? or Vice Versa? Try to talk with our lenders to get a better rate? The condos are small and not practical for two people but we are adjusting? Or do we just have to wait it out a couple of years? How many paths are there to this problem?