Brian: You are in an enviable position. You have an 80/20 mortgage, obtained 2 yrs. ago. You are still able to make both payments and aren't really hurting to move. However, you are planning for the future. You are in a lose/win situation. You may lose $10,000 to pay off your house in order to buy another where you would gain $20,000-$30,000 because of the depressed market. You may never see this opportunity again. Rates are low - egad, who thought that we would see under 5% unless it was an ARM (don't go there). Also, don't attempt to borrow more than your new home is worth. The banks won't allow it - it's called mortgage fraud. As a Realtor in the business since 1980, I have seen all kinds of move-up mortgages, negative am. loans, interest rates at 18%. And, don't even think about renting out your present property. That would be way too much debt for anyone given the current conditions. Renters aren't always great at maintaining your property and the bank won't allow you to use the full amount of the rent toward offsetting your two (!) mortgages, anyway. Good luck and let me know if you would like to meet and talk further with me.

I am not aware of any banks that would roll that into the new loan for you. You may consider talking with your bank that you currently have the mortgage with. They may do some type of "work-out" with you for the difference that is owed on the home. The new mortgage would be based on the appraised value of the home you are purchasing. Even with homes down in value, you'd have a hard time getting a lender to overvalue a home which is what you'd be wanting them to do if you were to incorporate the loss of your other property into the new loan. The lending industry is being scrutinized because of all the mortgage fraud that has occurred so new loans are difficult.
There are options for you with your current property.... you could of course rent it and hold out for a while till the market recovers, you could try selling the home yourself (keeping in mind that you'd need to be able to pay at least a 2.4% commission if an agent brought a buyer to you), you could list the property as a full service listing which would have a 5-6% commission, you could get a limited service listing which would cost you roughly 3% commission, etc. (Remember, commissions are negotiable if that helps you.) Any way that you look at it, you would be responsible for paying off the loan at the close of sale on your home. There are certainly some great buys out there on the market. Many home-owners and some of our local builders have lost properties so you can certainly pick up some great deals out there. I just showed a home in Pooler this morning that was listed over 400k last year by the homeowner and now it is a bank repo being offered at 255k. You're right, it's a great time to buy! Remember though, these same great deals are your competition in selling your current home. Please let me know if I can help you in any way. I'd be happy to put together comps and go over the scenarios for selling that I have given you as options. Good luck in whichever situation you choose to go! Robin