Can you use a personal loan to pay realtor fees?

Question by Ski_magoo: Can you use a personal loan to pay realtor fees?
Our family has been transferred, but we owe more on the house than it is worth. If we get an offer for what it is worth, can we get a personal loan for the cost associated with selling, ie Realtor fees. We can not sell it ourselves, because we are not living in the same state now.
I should add, we are currently renting and can not do short sale because we are not in trouble and do not want our credit score to go done, so that we can get another house.

Best answer:

Answer by jlf
Whether you can get a personal loan depends on your income and credit record.

What do you think? Answer below!

6 comments

  1. Christian Brown says:

    Yep you can get use your personal loan to buy whatever you want actually. The Realtor will probably take a cut off of the sale price of the house, so you will get less money back. Yes, a personal loan may be needed in order to fill the gap between what you get from selling the house and what you might still owe on the mortgage.

  2. ibu guru says:

    Lending is way down (comsumer credit outstanding has dropped about 10% so far this year), so realize that your chances of getting a personal loan are very poor. Also, realtors’ fees are paid at closing out of proceeds of sale to ensure that they are paid. No reason why you cannot pay them out of a loan, as long as realtor fees are paid at closing. The problem is getting a loan!

    If an offer to purchase will not cover the full amount of your mortgage plus closing costs, you will probably have to do a short sale, and possibly arrange with the lender to pay off any balance due on the mortgage. Also with a short sale, beware the possibility of having to pay state and/or federal income taxes on any portion of the mortgage which is not repaid. A loan which is not repaid becomes taxable income.

    Alternative? Can you lease your house for enough to pay all the mortgage payments, taxes, insurance? Tenant would pay all utilities and be required to perform all interior and exterior maintenance. This might help you if your job transfer might be temporary, or if you want to get that mortgage paid off further.

    Another possibility: lease/option deal. They lease for two years, during which they have an option to purchase the house at a price you set now. They pay you option money (usually $ 5000 – 10,000), plus security, first & last month’s rent up front. If they do not close within the 2 years, you keep the option money & security. If they close, the option money, security deposit, and part of the rent (usually 33-1/3% to 50%) is credited toward their down payment.

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