Need a bigger place. Purchased at top of the market in California and now upside. What can we do in our?

Asked by Yvon, San Diego, CA Sun Jun 29, 2008

We have no equity, looking for a cheaper deal (foreclosures are every) and we desperately need a larger place. Is financing an option? What do we do with the place that we currently own, rent or short sale?? Don't want our credit ruined especially without being in another home.

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Paula Swayne, , Sacramento, CA
Sun Jun 29, 2008
If you have no equity, then I have to believe, unless you have some asset somewhere else, that a lender is not going to look favorably on a refinance. If you don't want your credit affected, I would suggest that you muster all of the patience you can and stay where you are, even if it is difficult.
Just a side note: A neighbor, his 2 children and wife, lived in their living room and bathroom for 6 months while they totally remodeled their house. They cooked on a kitchen. The funny thing is, after the first couple of weeks, they got accustomed to the situation, and after the 6 months when they moved into their substantially larger remodeled home, they missed the intimacy of their temporary living situation. Maybe an attitude adjustment will get you through until your home is valuable enough to sell or refinance without affecting yoru credit.
1 vote
Pacita Dimac…, Agent, Oakland, CA
Sun Jun 29, 2008
This is a sticky situation. Buying foreclosures will still need financial strength on your part. Do you have money for a downpayment? Can you justify or prove financial ability to be able to afford another property while still owning your place? If your credit is in good shape and you have some funds to buy a foreclosure, you may be able to pull it off.

Is the market value of your home less than what you bought it for?

Since you said you are "upside down"...have you tried to renegotiate your loan? What options have your lender given you? Selling the property as a short sale will practically negate any chance you have of buying another property.

Can you refinance your current home so that you can get a better rate? Then wait a few months and try to sell it. Perhaps by that time, the market would have corrected itself and we'll be back to "normal".

If you're going to do a short sale, it will have a negative impact on your credit, albeit not as horrendous as a foreclosure or a bankruptcy.
1 vote
Denise Gleav…, Agent, Claremont, CA
Sun Jun 29, 2008
Hi Yvon,

Few options to consider... 1. See if you current lender will work with you on a loan modification. Maybe you can get the payments down where rent can cover the payment? Unless it does already. 2. Speak with a reputable lender to see what you realistically can qualify for in terms of a new loan for a larger home or possibly restructuring your existing loan.

Cindi is right about doing a short sale you will not qualify for a new one... plus there may be huge tax consequences that you can discuss with your CPA and or Attorney.

If you don't mind, I would like to make a lender recommendation... Lori Goldman, Guild Mtg 619-885-0093.

Good luck and wish you all the best.

Denise Gleavey
Coldwell Banker
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1 vote
Mike Lewis, Agent, San Diego, CA
Sun Jun 29, 2008
You can keep the home if you can make the payments. If not try to short sale it with a short sale expert. You probably can't buy if you keep the home unless you can get a loan with keeping your existing home. If you short sale the home your credit will not be good to get a loan to buy a home for a few years. Could you rent the home out to someone and then rent a bigger home for yourself?
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