Greeting: I need some advise please, we bought a town house in 2008 for $303k as of today its worth $170k. We got modification and currently monthly payment is $1700, we would like to buy another house in three years when our son starts middle school as the current area does not have good school for middle school and high school.
I really want to look at our situation from a different perspective and hoping that you will be able to advise on possible route to take, currently our house is worth $170k and our mortgage is $303k we would like to either sell the house and go and rent somewhere or stay in our property for another three years and hoping that we can buy another house in a good area by the time our son start middle school. The house doesnt have equity at all so my question should we sell now and go and rent, stay in our house, or rent our house and buy somewhere else.
I feel for you that you are in this situation as you have some tough decisions ahead of you. Selling would be an option but it would be a short sale unless you have an extra 130K layng around. If you short sale your credit will be dinged and you may have a tough time getting a loan. But then again you said you were OK with renting for a while. If it were me I would view this as only having 2 options which is either stay put or rent it. If you are set on moving to another area for schools I would suggest looking at the renting of your property sooner rather than later. This way you can rent another place for yourself for a couple of years and then you will likely be able to buy a second home with verification of the house being rented out.
Good luck to you!
Thank you indecison, I wasnt aware that I would need verification that the house has been rented for longer period, renting it is!!
Im not sure how all loan programs work but if you are going to carry 2 motgages I have seen some folks on here post they have had to have proof that the house is and has been rented. This probably also depends on your income as well I am sure. If you have the DTI to cover 2 then maybe it would not be a problem. Im no expert on this stuff though by any means.
Thank you so much, I will look for previous post regarding carrying 2 mortgage, i think it might be best to rent out and rent ours, if it means we reduce our DTI ratio and our current primary be seen as rental income