House value 250ish loans =277ish, what will it take to get out of arm that kicks in fall 2011?

Overly simplified alternatives from a Realtor:

Rent: Great option for Aurora. Rents are strong, demographic good, vacancy nill. Contact a great property manager. Call me for recommendations.

Sell: Bad Idea. The market will likely return soon. Try and hold out for better times.

Short-sell: This can be a very good strategic move for persons in very particular financial trouble. Call me for a free 30-minute consultation on the short-sale process and benefits.

Modification- extremely unlikely.

Refinance- unlikely given your initial perspective and actual cash-flow concerns.

Fix-up and sell: Could be a good idea, but the fix-up must cater to today's buyers: Very picky.

There are a couple of conforming (Fannie Mae, Freddie Mac) loans which will allow you to borrow more than the current value of your home under some conditions, the first being that the loan is a conforming loan to begin with. They allow for no change in your mortgage insurance status. That means that if you have no mortgage insurance now, you will have none on the new loan even if the new value is much lower. You may take advantage of very low fixed rates with these programs. You have many different questions, and most of them could have multiple answers. You should consult with a knowledgable lender to go over each of them in detail. There are many reputable lenders here on this forum who would be happy to give you a free consultation. It's true that you may not be able to modify your loan since you can obviously afford it, and it is probably a very good rate right now. Remember also, that the loan you have might actually be a good one, even if it's an ARM. I have had an ARM for 6 years, and you couldn't talk me out of mine. As far as property values, it takes demand to drive prices, and once again, it appears that demand is decreasing. In select neighborhoods which are still in demand, values will rise, in others, don't hold your breath. Before you decide to make improvements on a house, consult with a real estate expert to find out what your cost vs. added value will be. If you borrow money to finish your basement, and your property value continues to fall, you could be stuck in that house for 10 or 15 years before you have equity again. You may decide that it's cheaper to  buy a more fitting home for you and then rent out the home you have. Many experts have said that now is a great time to get great value on a house.

The bottom line is that you should consult with trusted experts in lending and real estate to determine the most efficient way to meet your financial and housing needs.

Good Luck!

How much do you owe in comparison to the approx value?