If you are doing the short sale and the lender for the rental property is demanding that you pay the difference between the short sale price and the current principal balance (let's say the current loan balance on the rental property is $100,000, but you short sale the property for $80,000), then yes it is possible they may put a lien or get a judgment in the amount of that $20,000 difference which could be applied to your primary residence as a lien or judgment.
Here's some more information:
When financing is involved in a real estate purchase, it is important to understand if you will be subject to the title or lien theory of mortgages. The way in which a state will interpret how mortgage law is followed will be determined by which type of theory is practiced in your state.
Each type of theory has special considerations on who will hold title and how foreclosure proceedings would take place if they were to become necessary. In title theory states, the borrower does not actually keep title to the property during the loan term. The seller gives the buyer/borrower a deed to the property but when the borrower signs the mortgage for the loan the borrower gives the title back to the mortgage holder. The lender then holds title to the property, as security only, until all loan payments have been made. During that time the borrower has the right to possession of the property, and the lender delivers the deed back to the borrower only after the loan obligation has been satisfied.
In a lien theory state, the buyer holds the deed to the property during the mortgage term The buyer promises to make all payments to the lender and the mortgage becomes a lien on the property, but title remains with the buyer. The lender's lien is removed once the payment of all loan payments have been completed. Foreclosure proceedings in a lien theory state may be more difficult for the lender than in a title theory state, due to the fact that the buyer is holding title to the land and not the lender.
Sources: http://www.escrowhelp.com/articles/20000317.HTML
Free homeowner assistance with these types of questions: cmcsoa (Consumer Mortgage Counseling Services) www.cmcsoa.org
It is possible to get refinanced for a rental property. The type of refinance would be called non-owner occupied real estate. Rates are often higher for rental property because they are not your primary residence.
Assuming the rental properties under foreclosure, it is only that property that is being foreclosed.
Sure. Tell the insurance companies the circumstances. One will be your primary residence and the other is a secondary residence or a rental property or whatever the circumstances.
Usually not, since your assessments pay for services and contributions to your reserve accounts.
***MORE INFO*** We received a rental agreement to sign, for a 1 week vacation rental property. In the contract, it states that if damage is done to the rental property and we do not pay for it, the owner has the right to place a lien on our permanent residence. Both properties are in Maryland. Is this even possible? Should we sign it?
It may not affect your own purchasing power at first. However, if for some reason the primary on the lease fails to pay or damages the rental property and leaves then you will be fully responsible for the rent and the cost of the damages. That will affect your own credit rating. That will affect your purchasing power. You should make certain that you can absorb those costs before you co-sign.
Other than home owners insurance covering your primary residence where you live and rental property insurance covering a home that you rent to others there are a few differences in types of coverage. While most home owners policies cover the building you live in as well as your contents (TV, Clothes, etc...), most rental property policies cover only the building. This is because in a rental property situation you usually do not own the contents inside and the renters have renters insurance to cover their own contents.
Need a little more detail & also the rules are not the same in all States. Is this a divorce situation? How long has the property been owned? Was the property acquired before or after the marriage? Ws the property purchased or inherited? Is this a primary residence or a rental property? What State do you live in?
Your local insurance broker can answer your question.
For WHAT?
The question is not whether the home was a primary residence, but whether the home was used for personal purposes. It doesn't matter if it was a primary residence, secondary residence, summer cottage, weekend retreat or whatever. If you used it for personal use, loss is not deductible. Since you say it was a rental property, it was not a personal use property. So you can take a capital loss if it applies. But in determining if you had a loss remember that you have to account for depreciation you took (or could have taken) when you owned it. If you failed to properly claim a capital loss in 2005, you need to hurry. The deadline for almost everyone to file an amended 2005 return and get a refund is April 15, 2009, which is about a week and a half from now. You cannot claim the original loss on your 2008 return. You have to file an amended 2005 return to do it.
Yes, you can. You add the rent to your income and add the payment to your monthly bills. The difference is called "positive cash flow" and it's ideally what you want to have or you will be losing money as a landlord. Owning rental property and making the payments on time with positive cash flow is a good thing when trying to get a mortgage, HOWEVER if you are getting a mortgage for more rental property, expect to pay a higher interest rate. The key is to finance it as your primary residence and live there for a while before converting it to rental property.