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how can you purchase a new home while taking a loss in the one you have to sell

we've outgrown our current home and are looking to purchase a new one.  I am making double what i earned when we purchased our current home and my wife wasn't working at all at the time, but is now earning what i used to.  So we have essentially tripled our income in the 7 years we've been here.
we've never been late or missed a pymt, but at the time purchased a home and made a bad deal because we are paying almost 2k/mo for a 1800 sq ft home that we purchased for 220k.  we should be paying that for a home twice that amt and size.  any suggestions?
  • April 03 2013 - Aurora
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Answers (6)

All good suggestions.  I would work with a Realtor that can help you find a renter as well as find you a new home.  Rates are great and your increasing income makes you the perfect candidate for a landlord.  I own several investment properties myself so let me know if I can help.
  • April 04 2013
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Suzzane has a great point here...If you can afford to keep it and rent, do it! We are seeing a major shortage in many markets for rentals and you may be able to cover the carrying costs on your current home.
  • April 03 2013
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Now is actually a great even perfect time to make a move!  If you "take the loss" on the current home and move up to your perfect home, you are making a good decision because the "loss" you are taking will enable you to move to a better home at probably the best possible investment (since it is thought we are at the bottom of the market riight now) and the best interest rates that I will see in my lifetime. 

Without knowing your particular situation, I can't give you a specific recommendation, but some thoughts are:  Can you qualify for both homes?, do you have the ability to "bring money" to closing on your current home and perhaps put less down on a new home?,  I would suggest getting with a good Realtor so they can help you stratigize how you can meet your goals with you.
  • April 03 2013
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The rental market is very strong in many markets, and as long as you qualify for both mortgages, it may make spence to keep your current home. The best advise is consult with a lender to find out your purchase options. A local realtor can also assist you in referring you to a reputable lender and also show you homes in a higher price bracket. The market is so strong here in Northern Califirnua that some are not as short as they were a year ago. Best of luck to you Suzanne Looker
  • April 03 2013
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Calculate your "loss". Can you afford to come out of pocket and pay the difference of the current mortgage to selling price at closing? And take care of your obligations with your new home purchase. If so, good for you.

  • April 03 2013
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Profile picture for wetdawgs
If you bring money to closing to make up the difference between your selling price and what you owe, then you can move forward smoothly.    To qualify for a short sale, you have to have a documented hardship.  It doesn't sound like you're in that category.

Other options: 
1.  Consider making the current home as a rental; please review with a lender what that would take related to reserves and % down payment to have that happen.  (If you start thinking "buy and bail", be aware that is mortgage fraud).

2.  Consider leading the trend in your network for small houses.   1800 sq ft doesn't fall in the category of "small"!
  • April 03 2013
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