How do I get out of an underwater mortgage?
My husband and I bought a condo in Las Vegas in 2006. It has dramatically dropped in value and is currently worth $30K, and we owe $144K on it.
It’s a 1 bedroom 560 sq. ft condo, which was fine for us back then. Last year we had a baby and even though space was tight we were trying to make it work.
Now that our kid is a toddler and running around, the space issue is really a concern. We have our son sleeping in the den (about 4 feet away from the stove).
It’s very hard on my husband and I because once our toddler goes to sleep at 7pm we are confined to a tiny room about 10ft away and have to be silent as to not wake him up.
We cannot go into the kitchen or the living room since he sleeps right next to them. We have thought about renting it out, but no one will pay $1200 for 560 sq ft. The condo next
to us is larger and renting for $650. I called the mortgage company and they will not refinance our mortgage. I have thought about short selling, but it’s not completely a financial hardship
(it’s a hardship in many other ways!) We don’t have enough money to pay the mortgage and rent another bigger place out. I’m at the end of my rope and I have no idea what to do. Any suggestions?
if it has dropped $100k in value - you won’t see any equity until it paid off in another 25 yrs - walk away, but you won’t be able to buy another house for awhile due to the foreclsoure
September 25th, 2010 at 5:58 am
What about renting out the condo you’re in now? You can charge whatever you pay a month and then get into another larger home. For example, if you pay $600 a month then rent it out for $600 or a little more, and then rent the place next door or wherever you’d like to move to. It’s an idea. I hope this helped.
References :
September 25th, 2010 at 6:20 am
if it has dropped $100k in value - you won’t see any equity until it paid off in another 25 yrs - walk away, but you won’t be able to buy another house for awhile due to the foreclsoure
References :
September 25th, 2010 at 7:05 am
If you walk away, you’ll ruin your credit for years. Put the kid in the bedroom and you guys sleep in the den. We lived in a 4 room flat when I was a kid, and we had a small family of 5. Many of the kids I knew from school had 8 or 10 people in the same size flat, and you just do what you have to do to make it work.
References :
September 25th, 2010 at 7:52 am
you wont escape that without a short sale or foreclosure.
you will probably have to stop paying the mortgage to get either of those to happen.
References :
September 25th, 2010 at 8:33 am
You may want to do a strategic foreclosure which is a fancy way of saying just walk away because it probably won’t regain value for over a decade.
References :
September 25th, 2010 at 9:21 am
Parenting advice: If your son gets used to 100% silence in order to sleep, you are going to have a long hard road ahead..kids will sleep with noise in the house. He has to learn to live with it.
The stove is not a concern…every parent has had kids that has woke up before they do and it is very, very difficult for a toddler to coordinate turning the stove on.
You are stuck, for now…but there is no guarantee when you buy any real estate that the value will go up or stay the same.
PS: Where did you get the value from? If you are using Zillow, that is not accurate.
References :