The solution to your problem revolves around time. How long will it take for our local Rockford market to turn around? I'm hesitant to believe that market rebound and recovery is going to be experienced within the next year or two locally; and I'm even more skeptical that the property values are going to snap back to where they need to be for you to break even - that could take the better part of the next decade. Values in Rockford have already reverted to where they were in the mid-1990s. We just lost nearly 20 years of appreciation. We aren't going to miraculously gain that back.
So here's the deal... If I were you, I would give more consideration to the possibility of being a landlord. Given the fact your mortgage is where it is and the taxes are where they probably are, you will probably need to get $900 to $1100/month for rent. If you can get that... great! If not, you might lose a couple hundred bucks a month. But do the math... sell now and lose $30,000 to $40,000 or rent the house out for the next decade with a $200 monthly loss and still be $6,000 to $16,000 AHEAD of where you would be if you dumped it today.
Bottom Line: Don't sell in today's market unless you absolutely have to. It's very difficult, in fact nearly imposssible, to compete with some of the prices on these short sales and foreclosures. Unless, of course, you're willing to get bent over a barrel.
RYAN PETRY | kw
A. Pay down your current mortgage so you have at least 25% equity in your present home, then rent it out for enough to cover the current mortgage (then you should qualify to buy a new home), or
B. Sell your present home for as much as you can and pay the shortfall at closing from your other assets. Then you will be free to buy another home.
There is no easy answer when you are in an underwater situation and you do not want to ruin your credit by a short sale or a foreclosure. I have had 6 closings in the past six months where sellers have brought between $20,000 and $60,000 to the closing.
If I can help you, please contact me at 815-231-4166 or my cell 815-494-1444.
If you are looking to get a preapproval for the purchase of a new home, please contact me.
Nick Nelson (NMLS #384413)
Mortgage Loan Officer
1st Step Mortgage Group
6876 Spring Creek Road, Suite 124
Rockford, IL. 61114
Trading up would absolutely be the best option. While you may not realize a profit on your current home, the low interest rates combined with the current market home prices would allow you to invest in a larger home that would offset your looses in the long run. Walking away from your current home would result in devastation to your credit for many years to come. With an 810 credit score, and 100k in liquid assets, barring no other credit issues, you should easily qualify.
Please give me a call and we can work together to keep your great credit standing, as well as find the perfect home for you.
Keller Williams Realty Signature