Tilted Forum Project Discussion Community - View Single Post - House is worth less than I owe and relocating, need advice!

Stompy · 07-08-2007, 01:43 PM

So our company is relocating us from suburbs of Detroit, MI to Tampa, FL.

Pretty good and all, except every single one of us who owns a home is in the situation where we owe more than our houses are worth since the market took a crap and everything is worth 20% less than what it should be.

The main issue I have is I refinanced 2 years ago to an 80/20 loan, and the ARM on the 80 just expired. Obviously since I owe more than the house is worth I can't refi or consolidate.

Renting at this point is sort of a last ditch option for me because I'd rather just get rid of the house entirely without the ongoing headaches and stress of tenants and all that. If I were to rent, I'd still have a $500 difference I'd be paying from what I pay out monthly vs what I could get in rent (pay out 1600, could get 1100 max per month).

Thing is, I could sell my home and pay off the 80% loan without a problem, but I'd still have the 20% to deal with, which I could easily afford on its own. Obviously the problem is that 20% loan is secured and tied to the house.

Can banks take that 20 loan and convert it to unsecured without any probs? If so, what would the interest/terms be like?

Could I write the loss off on taxes?

What's the typical path that someone in my situation takes? (Note: I did ask a realtor about this, but I feel that they have their own agenda, so I figured I'd ask a rather unbiased source)

07-08-2007, 01:43 PM	#1 (permalink)
Stompy Banned from being Banned Location: Donkey	House is worth less than I owe and relocating, need advice! So our company is relocating us from suburbs of Detroit, MI to Tampa, FL. Pretty good and all, except every single one of us who owns a home is in the situation where we owe more than our houses are worth since the market took a crap and everything is worth 20% less than what it should be. The main issue I have is I refinanced 2 years ago to an 80/20 loan, and the ARM on the 80 just expired. Obviously since I owe more than the house is worth I can't refi or consolidate. Renting at this point is sort of a last ditch option for me because I'd rather just get rid of the house entirely without the ongoing headaches and stress of tenants and all that. If I were to rent, I'd still have a $500 difference I'd be paying from what I pay out monthly vs what I could get in rent (pay out 1600, could get 1100 max per month). Thing is, I could sell my home and pay off the 80% loan without a problem, but I'd still have the 20% to deal with, which I could easily afford on its own. Obviously the problem is that 20% loan is secured and tied to the house. Can banks take that 20 loan and convert it to unsecured without any probs? If so, what would the interest/terms be like? Could I write the loss off on taxes? What's the typical path that someone in my situation takes? (Note: I did ask a realtor about this, but I feel that they have their own agenda, so I figured I'd ask a rather unbiased source) __________________ I love lamp. Last edited by Stompy; 07-08-2007 at 01:54 PM..