Profile picture for Judith Downes

Judith Downes

Lender

Mortgage Banker (21 years experience)

Specialties:
Purchase Loan,
Refinancing,
Home Equity,
Mortgage Planning

Advice

  • (2 Contributions,
  • 0 Best Answers,
  • 0 Helpful)

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Upside down, Rent or Sell?

Answer

Adding to my previous post, I would say make sure you have complete information on all options.  Selling your house, in addition to the mortgage loss, will involve title/closing expense; refinance (HARP) is subject to requirements such as when you originated your current loan and how it is held, additionally you would want to see if you can transfer mi, if you have mi; rental requires you to take on additional responsibilities offset by the ability to write off your loss and gain a depreciation deduction.  I would also check the trends for sales in your area, both rental and sales, are they going up or down. Is this the best offer you are likely to get?  And if you don't sell or decide not to in the short term, do you want a long term rental or a month to month rental to offset your cost or can you stay in the property yourself.

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Upside down, Rent or Sell?

Answer

If you sell you will be out the debt and the obligation but need to come in with cash unless you negotiate a short sale which will effect your credit negatively.  Your rate is much higher than market so potentially you could look at the option of refinancing, especially if it is a primary, and lowering your payment, which will give you a less out of pocket loss and a tax deduction.  If the taxes are sure to increase, that would suggest the assessment will to, which would allow you to sell higher at a future date.  Doing this will give you a "free" month as well helping to offset your costs, but as noted in other posts, it requires you to accept being a landlord and is dependent on your overall financial and credit profile.

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