I guess I'm not sure what you're asking here. This is my take:
1. Your current property is "upside down" in value. You can either attempt a short sale, rent the place out and keep making your payments, let it go in to foreclosure.
2. If you have a mortgage payment that you're currently making on the house and you have a renter in there, it might allow you to get a new mortgage if you have enough for a downpayment. Thing is, in order for the lender to take that in to consideration, you will need to have rented it for at least 6 mos. to a year.
3. If you do a short sale or go in to foreclosure, you will not be able to purchase for a couple of years after the final execution of either.
I know this seems a little overwhelming. You may want to talk to a good agent there just to get some advice and lay your scenarios out in front of you. Couldn't hurt to consult an attorney either.
They will count student loans even if they are not due. If she has limited income you might be better off financing the home in just your name. You can always add her to the title and when you are married she automatically owns half the house based on a law called spousal interest.... more
Your asking a question that even a year ago may have generated a different answer. My suggestion, be careful on what you decide to do in your home in this current market. Your location, what the market is like in your particular area, what is the price range that the homes are currently selling for. Your doing a wise thing in asking experts to give you advice. My experience tells me that it is hard to recoup an investment like this in our current market. Maybe scale it down a bit.... more