I hear you. It is not an easy decision. Let me ask you this… your comments above indicate you have thought alot about this but have you actually put your estimated calculations on a spreadsheet to look at ALL the data? I know it is easier to kind of lump everything together and make an estimate but being more precise and putting all out on a sheet really helps to clarify. The key is to be anal in the organization.
The way I see it you have a few potential paths:
1 – Riding out the storm until it bottoms out, then selling and buying directly into the home you want to be in for several years.
2 – Selling the home immediately, then renting for a few years, then buying directly into the home you want to be in for several years.
3 – Selling the home in a year or two, then renting for a few years, then buying directly into the home you want to be in for several years.
4 – Refinancing the home now (or in a few months) then live in it until a specific time in the future at which point you will then buy another home you want to be in for several years.
I think that covers all possibilities right?
So the first thing you need to do is run through a rent verses your existing cost of owning to see if your out of pocket expense is really as bad as you say. Also make sure you ADJUST your existing cost of owning whenever your loan resets. The same is true if you refinance including the cost of refinancing. Of course don’t forget your HOA/Prop taxes, additional insurance if you carry it, etc…Just make sure you keep the rent verses buy calculation honest in both directions. Don’t forget to run a sample tax return for each case as well to see how it affects your taxes.
I agree that in your case it MAY be okay to keep the home, but I think you may find that the cash flow is going to run negative once you get into a more conservative loan program and add in all the other costs of owning. However if rents stay strong in the UTC area then you may be okay.
I know it is a tough choice but if you can run out the above scenarios a little more thoroughly then it may clarify things.
