I would keep the condo, rent it out. Now this does count against you for qualification purposes on the mortgage end, but it will help you in life after new purchase to offset the mortgage payment. So although you can't use it to help you qualify for more money, itâ€™s in your best interest either way for the condo rental income not to count for qualification purposes, this way you always know that the new mortgage payments is being calculated and in accordance to Fannie Mae & Freddie Mac on home buying statics of how much you can truly afford.
I wouldnâ€™t suggest short sale or foreclosure because although FHA will allow you to purchase a new home with outstanding circumstances (which any lender can help you with) you would not have any good outstanding circumstances as it seems you both get paid well and have no debt. Itâ€™s not worth hurting your credit with having a short sale/foreclosures on credit. So although it is underwater at the moment itâ€™s not worth losing your great credit history over a home that will be offset with rent either way.
Itâ€™s a tough choice to make but one that you will have to make for you family, I wish you the best and hope it works out for you and your family. I would hold on to the condo because truly you have no choice, if you want to continue with great credit history. So just rent it out, and move on into a bigger home that you qualify for. I am sure you qualify according to what you stated for a decent size home in a good neighborhood. As long as you have a good lender that wonâ€™t give you bad advice I think you will be fine.
If I can help you out in any way donâ€™t hesitate to contact me.
The same question that you answered when you bought it and the reason why you took on the responsibility of the debt.
The price of the original home and it's location was as evident to you than as it is now. Or was it?
It appears that you were prioritizing affordability over esthetic values and location. That is not a mistake but a wise defensive choice.Make sure that you do not overextend yourself by the new debt that you are planing to take on or jeopardize your credit at the same time. Patience is a virtue. You have two choices in my opinion. Stick it out and stay with your original home till you can sell it as the market recovers. The other is to have your wife buy the other property on her name alone if she could maintain it and afford it. As you sell your home and recoup some of your equity you may join her and add your name on the title and share the debt. I would no gamble to rent your home with how you described it there are danger signs that I could see and you getting hurt.
If not than you have several options not one that I would recommend but an attorney could and the decision is left up to you.
Nothing creates solutions faster than acute chronic problems. You situation is both chronic and acute.
As Carol pointed out, this is not a situation most real estate professionals have not faced.
Contact a real estate professional who has good investor networks. The options available for acquiring your new home and resolving your existing ownership will be properly vetted based on your situation and market condition. After all, it is easy to understand that what is 'THE BEST OPTION FOR YOU' depends on your situation, your objectives and your resources.
Best of success in getting into a home where you can open the windows!
The best advice for you is to talk to a local lender to find out the choices for your situation. One thought may be for you to rent the home that you are in and buy another home. Another possibility may be for the one how doesn't own a home to buy the new home in their name.
I have worked with buyers that are in the same situation as you and they were able to get financing to buy another home. When the market recovers you can think about selling your present home when you are ready to.
Prudential California Realty
Prudential Florida Realty
We get a lot of questions about Homeowners being Upside-Down on their house.
I will try to cover the field on this topic:
1.) Just being Upside-Down is not sufficient reason for the Bank to do anything for you:
2.) The Bank did not create the Recession and the bank has itâ€™s own problems.
3.) For some RELIEF, you need a dire Financial Hardship to exist; such as you lost your job, or you had a Medical Catastrophe.
4.) If you want to do a Shortsale, you will have to prove to the Bank that they must help you, now or later. Most Banks will not even talk to you if you are CURRENT; so you will have to go past the Point-of-no-Return before they will do anything.
5.) The first step would be to find a Realtor, well versed in Shortsales, who will help you.
6.) This is not as simple as it sounds; many Agents have â€œsworn off shortsalesâ€ because of what is involved in them.
7.) It will make a very big difference if you have ONE LOAN as opposed to having a SECOND. The chances of succeeding in your Shortsale are greatly reduced by having a SECOND loan.
8.) You will have to sit down and compose a letter to your Lender; telling them exactly why you have a hardship and what you plan to do. It is my experience that you have to do this, personally; your Realtor cannot do it, and your Attorney cannot do it for you. You should be OPEN and HONEST, donâ€™t try to B.S: This is about the only thing in the whole process that is PERSONAL. (If you really want to be PERSONAL, do it on a lined pad in your own LEGIBLE handwriting or printing.)
9.) If successful, you now can say (in the Listing) that your Shortsale is pre-approved by your bank.
10.) Now, you can List the house with your Realtor and the MLS. Your Realtor will do a CMA, (Comparative Market Analysis) to determine the Listing Price. The Bank may order a BPO, (Broker Price Opinion) to determine the Listing Price. In many cases, you will be on your own; the Bank will not communicate with you.
11.) If you get an Offer, you will probably â€œrubber stampâ€ it and your Realtor will forward it to the Bank.
12.) There is no set time for the Bank to respond; we have heard of three weeks, and we have heard of a year or more. This is not fair, not reasonable, and in fact, it is rude and ridiculous. But it is a fact; so do not get impatient or upset with your Realtor, it is not their fault and they have no control over it. They will gently try to push it along, calling every week or two; but they understand that the person who has that file on their desk, probably has 100 to 300 other files, (they could accidently take a file and move it to the bottom of the pile; things like that have been know to happen.)
13.) You must understand that the Bank is there to make money; they are not a social service organization. It is possible that they believe that they might be able to make more money by letting the property go through Foreclosure. Or, they might believe that next year (or six months from now) the Market will be stronger and they can either COUNTER your offer, or, let it go through Foreclosure.
14.) Now, it is seven months later, and you get a Letter of Acceptance from the Bank: It will probably delineate the terms that they deem acceptable: For example; it may say that the Escrow is to be 45 days, that XYZ is going to be the Title Company, that they are not going to pay for any Inspections, that they will pay a maximum of [$750] for Schedule A(1) repairs due to Pest Inspection, and that if you are not ready to close on time, you will be charged [$50] per day for each and every day.
15.) If you are still in the game, your Buyers will do their Inspections, and set up their Loan. The Bank will order the Appraisal.
16.) Follow your Realtorâ€™s guide and in 45 days, you will be moving.
17.) That would cover a SHORTSALE: But what about a Foreclosure; that would be a separate topic.
18.) Youâ€™re not out of the woods yet. If the Bank accepted [$100,000] less than the amount of the loan, they might come after you with a Deficiency Judgment. The list of Non-Recourse States is changing fast. Please consult an Attorney at this point; I am not equipped to answer Legal Questions. But,
19.) I will say that it looks like Deficiency Judgments are like an ice berg sitting out there, waiting for your ship to come along. If you Google â€œnon-recourse statesâ€ you can get an idea.
20.) There are still other considerations: Are you behind on your Property Taxes, (if you have IMPOUNDS, you may be? HOA fees? Insurance?
21.) You need to do your Diligence.
Good luck and may God bless