Hello! My name is Deanna im 28 years old from Middle River, MD. My husband and I bough our town house back in Jan 2007. We bought for around $276,000 brand new. Thinking this would be a started house and we would live in it between 3 and 5 years. We had our first child last year and we have been in this house coming up on 5 years and im so anxious to sell and move into something bigger and alot closer to my family for babysitting reasons. Our family lives about 30miles away so its always a pain to drive back and forth we waste so much money. Anyway, the only problem is we are upside down on our house :eek: Its so frustrating because I dont know what to do.. What should someone do in our situation?? Everyone just tells me to wait a couple years for the market to go back up but seriously I dont think the market will ever be close to what it was in 2007. We have no problem with our payments we pay every month on time. Im just so confused on what we should do? If there are any realtors out there that can give me some professional advice I would love it!

There are not many alternatives for you.

A short sale will ruin your credit and you won't be able to buy another house.

If you sell your house at a loss you will have to come up with the difference in the balance. If you don't have the cash perhaps you could get a personal loan for the amount your house is underwtaer and you can give that money to your lender when you close the sale on the house you live in.

If you don't have the cash and borrowing it won't work your only other option is to get comfortable for a while. Prices will eventually go back up but it won't be anytime soon.

Putting an addition on the current house won't move you closer to your Parents; but it could alleviate the "size" issue.

1.You could ask the bank on the mortgage if they would let you carry and unsecured note for the difference.

Example you bought the house at 175,000 and now it's worth 150,000.

You get 150,000 sales price and the bank gives you an unsecured note for 25,000 with a 30 year amortization with a balloon due in 3 years.

This would free up most of the income to qualify for another mortgage.You would need to eliminate other debt on your credit report as well to help you out.

2.You could also rent it out and move into a friend's place or your parents for awhile and save up some cash to buy another property.

3.Your parents could sell their property and you and them could go in together and buy a really large place with separate buildings on land for each of you.(some families this would work and others not it just depends on the dynamics of each family).

4.Your family siblings could sell and move closer to you.

5.If the issue was just lower payments you could do a permanent loan mod or a short sale refinance it is is offered by your servicer or lender.Since location and space more than payment is an issue I don't see this as an option for you.

These markets call for hard decisions.The one you want to get out unscathed in an upside down property isn't going to happen.

How much upside down are you in value right now 25,50,100k??

Used to you could do the "buy and bail" where you can qualify for 2 homes with good income.You buy one with a low interest rate in today's market for a great price and the let the "loser" property you bought foreclose.Lenders have been catching onto this in the last year and it is harder to achieve.

Usually since the buyers landed a great loan and house they don't care then if the credit gets dinged.

if you choose to go ahead and sell, try to mitigate the sale expenses as much as possible. you could become licensed yourself, hook up with a 100% commission broker, sell the home and you only pay half the normal commission to buyer's agent (plus a few hundred dollars flat fee to your broker), or if no buyer's agent, you pay no commission. you could also list with a FSBO broker, where broker only helps you with the sale paperwork and charges a flat fee, you do all the marketing.

If you have zero equity, any sale expenses will come out of your pocket, so you want to minimize those. you are simply the victim of bad market timing. sometimes it's best to cut your losses and move on, but this will be an expensive lesson.

your problem with other options is that your loan is not in default, and you probably cannot show financial hardship.

Granted, you owe more on your current home then it would sell for in the present market, but how much would the short-fall be ?

You might consider discussing the matter with your current lender, and perhaps they would aid you in finding a solution or if, you were able to raise enough money for a down payment on another property, ask the current lender if they would be willing add the amount of the short-fall on the sale of your current home to the mortgage of your new home ?

The lender would be retaining their borrower whose mortgage has not been in default and still have security for their loan, and relatively speaking no worse off then if there was a short-sale.

IMPORTANT NOTICE: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a Lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information.