foreclosing on one house while buying a second

[southcod]

I live in Las Vegas, NV and I own a home which is currently worth less than what I originally paid for it. The mortage company will not let me remortage to get a lower rate. Also it is adjustable and due to balloon in April 2009.

I am seriously considering letting the property go into foreclosure as this seems my only option.

In the meantime I have been looking for another house and have made an offer on another property.

My question is -

Will the foreclosure on my first home effect the house I am planning on purchasing and moving in to.

Can you advise me on the best way to get out of the first mortgage so that we can move on ???

What will be the consequesence of foreclosure ??

 

[presutin]

If you are late on your payments on the first mortgage, I will find hard to believe that any lender will finance your second purchase.

If the first lender is not working with you on the lowering of your interest rate and you have indicated to them that you will go into foreclosure, the consequences are difficulties obtaining credit and a dark spot on your credit report for a very long time; i.e - you will pay higher interest rates and will not get approved as easily for any unsecured debt.

 

[Michael Wechsler]

Quite honestly... and don't take offense... the best way out of the first home is to pay it off. If there is a risk of foreclosure, what makes you think you should be buying a new home? It's like the guy who can't or doesn't want to make his car payments on the Volkswagon but he's got a contract in hand for a new Lexus.

Buying real estate or any property doesn't mean that the buyer is guaranteed his money back. There are numerous people walking away from their loans as if it is a right to do so due to the decline in value, yet they'll hold 2 or 3 properties as if it is a right and not a privilege and should not be affected. Why would a lender just give you more money when they see you're going to dump the other home. Sell the first home at a loss and use the money to buy a second. Otherwise you'll also be stuck with foreclosure costs as well.

 

[Barrz]

I heard of this same thing going on in Colorado, people were signing a deed in lue of forclosure and recording it shortly before buying a new home.