I feel everyone’s pain on this board. I bought in 2004 at the high, $345,000 for a 2br, 1 bath detached house with no yard (practically a condo, but not quite since it’s a PUD)… And I put about $25,000 in repairs and improvements to the property, and of course another 5k in closing costs… My ARM just reset, and I’ve had the property for sale for 3 months with no offers. It’s been a tough road waiting for someone to come buy my unit (i’m just trying to break even at this point), but I finally decided to cut my losses and rent it out last month for $1650. So, the reset on my mortgage has my payment at almost $3100 w/ property taxes, and so you can easilly see the deficiency between rent and actual monthly payment…
You have to weigh everything out, and I still am. Good credit says a lot. Today I walked into SD County Credit Union, and opened an account, refinanced my car loan, and transferred one of my high rate Visa cards to their lower rate card, all in a matter of over an hour, with no hastle or fuss. In fact, I only had to show my drivers license, and 1 paycheck stub and the deal was done. That’s the beauty of having good credit, you can get stuff done with minimal hastle.
On the other hand, the temptation to walk away from my house is weighing heavily in my head… Good credit versus not having that huge burden, which do you choose?
My suggestion, which actually comes from sdrealtor, is to sit down and make a spreadsheet, and figure out ALL your options and the costs associated with those options. You can bang your head against all the wall all you want, but once you put it all down on paper, it makes it much easier to see what the best thing to do.
Don’t forget to include your tax implications. If you take an $800 a month loss, depending on what tax bracket you’re in, you’re probably looking at $350 less in taxes, so you can subtract that from your costs. This of course, assumes you ALREADY have adjusted your W2 at work to compensate for these expenses, some people claim 0 on their W2 even when they’re paying $3000 in mortgage interest a month and then get a lot back on their taxes, for me, I go the other way, and claim 9 so I can immediately see the money back, that they would have to refund me anyway when I deduct the mortgage interest.
Best wishes in whatever you decide to do, and be sure to share with all of us your story.
