If I have been pre-approved for a new mortgage on a second house, what if I’m unable to maintain payments on my 1st house?

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If I have been pre-approved for a new mortgage on a second house, what if I’m unable to maintain payments on my 1st house?

I am looking to rent or rent-to-own my 1st house (current) and move into new one. I am concerned that the market would not allow me to rent or rent-to own at a profitable lease. What recourse would the 1st mortgage lender have it the 1st home went to foreclosure or short sale?

Asked on March 27, 2012 under Real Estate Law, Michigan

Answers:

Hong Shen / Roberts Law Group

Answered 9 years ago | Contributor

If the house goes to foreclosure it will be auctioned off to pay for the mortgage. In a short sale situation the bank may be able to give you a break and let you sell the house at the certain price to repay the mortgage debt.


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