Sunday, May 11, 2008

A bit of heaven in Randolph

Today's example involves a buyer that just dabbled in the HELOC pleasures. While the goal of this blog is to find examples of those who over-indulged, there are many, many more who partook just a bit. This is an example of one of those. It looks like this buyer dipped the toe in and either had cold feet or it was just puddle. But at least this owner is not currently underwater. Here is a look at the property -

Here is a description -

Randolph, NJ
Lovely three bedroom, two full bath Cape Cod situated on a level lot! Features include updated kitchen with breakfast bar, formal dining room, master bedroom with walk-in-closet, full unfinished basement, deck and more!

Here is a look at the financials -

  • The property was purchased June 2003 for $322,500
  • The first mortgage in June 2003 was for $258,000 and taken with Sullivan Financial Services
  • A second mortgage also in June 2003 was taken for $48,375 also with Sullivan Financial Services
  • Home Equity loan was taken August 2004 for $47,000 with Morristown Federal Credit
  • The property is currently for sale with realtor for $385,000
The owner put down a respectable $16,125 which is 5%. During the Great Housing Bubble when many buyers where using 100% financing - any money down. However just over a year later the owner took back their $16,125 plus another $30,875 of equity - probably every penny the appraiser would give them. Just that one indulgence and the owners were doing good, coasting along until something happened. The owners filed an Notice of Settlement, which appears to have fallen through due to the recent for-sale listing. Now if the current owners are able to sell the property for the full asking price, after the standard 6% realtor fees, they will be ahead $8,625. However if the selling price falls below $376,000 the owners will either need to negotiate a short sale or owe money on the mortgages at closing. This is also assuming their are no late payments fees tacked on that will have to be addressed at the closing.

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