When does it make financial sense to just dump your house???

[ibjames]

or if you do your own taxes with turbo tax just open up your file and remove your house deduction, you’ll see what the change is right away

[Kingside]

One way to help yourself make a business decision is to ask yourself and try to answer the question what is more likely to come back first, your equity or your credit?

If you decide you are willing to walk, and can accept the possibility that you will lose the house in foreclosure, steel yourself, consider brinkmanship as the foreclosure process continues, and hold out till you cut a deal to reduce the payments to rental value. Your willingness to actually walk is what gives you the most leverage. As you note, your loans appear to be purchase money, and there should be no recourse against you if you decide to walk.

If you stopped paying on just the second, there would be nothing they could do other than harrass you with phone calls, and foreclose, which they obviously won’t. This might bring them to the table, or it might prolong the damage to your credit the longer the situation remains in limbo.

[Kingside]

One way to help yourself make a business decision is to ask yourself and try to answer the question what is more likely to come back first, your equity or your credit?

If you decide you are willing to walk, and can accept the possibility that you will lose the house in foreclosure, steel yourself, consider brinkmanship as the foreclosure process continues, and hold out till you cut a deal to reduce the payments to rental value. Your willingness to actually walk is what gives you the most leverage. As you note, your loans appear to be purchase money, and there should be no recourse against you if you decide to walk.

If you stopped paying on just the second, there would be nothing they could do other than harrass you with phone calls, and foreclose, which they obviously won’t. This might bring them to the table, or it might prolong the damage to your credit the longer the situation remains in limbo.

[Kingside]

One way to help yourself make a business decision is to ask yourself and try to answer the question what is more likely to come back first, your equity or your credit?

If you decide you are willing to walk, and can accept the possibility that you will lose the house in foreclosure, steel yourself, consider brinkmanship as the foreclosure process continues, and hold out till you cut a deal to reduce the payments to rental value. Your willingness to actually walk is what gives you the most leverage. As you note, your loans appear to be purchase money, and there should be no recourse against you if you decide to walk.

If you stopped paying on just the second, there would be nothing they could do other than harrass you with phone calls, and foreclose, which they obviously won’t. This might bring them to the table, or it might prolong the damage to your credit the longer the situation remains in limbo.

[Kingside]

One way to help yourself make a business decision is to ask yourself and try to answer the question what is more likely to come back first, your equity or your credit?

If you decide you are willing to walk, and can accept the possibility that you will lose the house in foreclosure, steel yourself, consider brinkmanship as the foreclosure process continues, and hold out till you cut a deal to reduce the payments to rental value. Your willingness to actually walk is what gives you the most leverage. As you note, your loans appear to be purchase money, and there should be no recourse against you if you decide to walk.

If you stopped paying on just the second, there would be nothing they could do other than harrass you with phone calls, and foreclose, which they obviously won’t. This might bring them to the table, or it might prolong the damage to your credit the longer the situation remains in limbo.

[Kingside]

One way to help yourself make a business decision is to ask yourself and try to answer the question what is more likely to come back first, your equity or your credit?

If you decide you are willing to walk, and can accept the possibility that you will lose the house in foreclosure, steel yourself, consider brinkmanship as the foreclosure process continues, and hold out till you cut a deal to reduce the payments to rental value. Your willingness to actually walk is what gives you the most leverage. As you note, your loans appear to be purchase money, and there should be no recourse against you if you decide to walk.

If you stopped paying on just the second, there would be nothing they could do other than harrass you with phone calls, and foreclose, which they obviously won’t. This might bring them to the table, or it might prolong the damage to your credit the longer the situation remains in limbo.

[CA renter]

Good point, Kingside.

Also, what is the likelihood that the second might settle for some kind of payout?

Based on the numbers, it looks like the second was ~$76,000. Maybe you can call them and tell them that you cannot afford the house with their loan. Maybe they might accept $20K or so to close out the loan??? You can effectively give yourself a principal reduction IF they believe you’ll walk away without it. Heck, the government is encouraging this behavior, might as well go along with it… (certainly “doing the right thing” is not what the govt wants from us).

Anyone know if this is being done, and whether or not it’s successful?

[CA renter]

Good point, Kingside.

Also, what is the likelihood that the second might settle for some kind of payout?

Based on the numbers, it looks like the second was ~$76,000. Maybe you can call them and tell them that you cannot afford the house with their loan. Maybe they might accept $20K or so to close out the loan??? You can effectively give yourself a principal reduction IF they believe you’ll walk away without it. Heck, the government is encouraging this behavior, might as well go along with it… (certainly “doing the right thing” is not what the govt wants from us).

Anyone know if this is being done, and whether or not it’s successful?

[CA renter]

Good point, Kingside.

Also, what is the likelihood that the second might settle for some kind of payout?

Based on the numbers, it looks like the second was ~$76,000. Maybe you can call them and tell them that you cannot afford the house with their loan. Maybe they might accept $20K or so to close out the loan??? You can effectively give yourself a principal reduction IF they believe you’ll walk away without it. Heck, the government is encouraging this behavior, might as well go along with it… (certainly “doing the right thing” is not what the govt wants from us).

Anyone know if this is being done, and whether or not it’s successful?

[CA renter]

Good point, Kingside.

Also, what is the likelihood that the second might settle for some kind of payout?

Based on the numbers, it looks like the second was ~$76,000. Maybe you can call them and tell them that you cannot afford the house with their loan. Maybe they might accept $20K or so to close out the loan??? You can effectively give yourself a principal reduction IF they believe you’ll walk away without it. Heck, the government is encouraging this behavior, might as well go along with it… (certainly “doing the right thing” is not what the govt wants from us).

Anyone know if this is being done, and whether or not it’s successful?

[CA renter]

Good point, Kingside.

Also, what is the likelihood that the second might settle for some kind of payout?

Based on the numbers, it looks like the second was ~$76,000. Maybe you can call them and tell them that you cannot afford the house with their loan. Maybe they might accept $20K or so to close out the loan??? You can effectively give yourself a principal reduction IF they believe you’ll walk away without it. Heck, the government is encouraging this behavior, might as well go along with it… (certainly “doing the right thing” is not what the govt wants from us).

Anyone know if this is being done, and whether or not it’s successful?

[Scarlett]

How easy it is to find a rental you like when you want it?

1900 sf – well, with 3 kids, it depends on the floor plan. If it’s just 3 bdr, it can be a bit tight. I feel that many floor plans tend to waste space. I can understand the desire to have more rooms.

Is it easy to find a house as nice and large as desired in the same or better location on the market WHENEVER you want -i.e. when you sell the place???

IT is a real pain to time those things – and nice homes for renting are not exactly easy to find when you want them, at least where I am looking, and you end up settling. Things that you don’t realize when looking at a rental (vs. buying) start to raise their ugly heads soon after move in. (The floors are squeaky, the whole house is drafty, you get too much noise/sun, the light and bathroom fixtures are not quite right, there is a smell somewhere, stains/cracks you didn’t see, obnoxious neighbor, etc. etc.). And being a rental, it’s a waste of time/money to add upgrades, so you will start longing for your old house, that you ‘owned’ and you could do what you want in it to suit you.

AND It is NOT fun to move, especially with small kids. Take into account the transaction costs for selling, and then the moving expenses? Nevermind the pain of packing and moving a whole house.

Maybe relatively close to your work, there are nice houses that suit your wife’s preferences, that come on the market all the time. But IMHO, you can count only on rental apartments/condos to have something you want when you want it.

It’s not only dollars and cents to take into account. I don’t think you will save that much money if you are going to rent a 3000 sf place, but you really should go and look at a few places for rental (from Craigslist, etc.) and see how many come on the market, how they suit you – go visit them. Do that for a couple months, weigh pros and cons for each place. Look at some low 2000 sf as well, maybe some have a much better floor plan for your needs and see if all of you are ok with it for a few years to save money.

If I’d be in your place, I’d try to find a cheaper rental, even it means staying in the same square footage to save money while you repair your credit. I would upgrade to a larger house when I’d buy it.

I guess what I am saying, do your homework, be aware of all the traps out there in the rental world, know what you are in for and if you are all ok with it (especially that the rental house will not be as ‘ideal’ as your old house, with potentially annoying issues), then, dump the house.

Edit:
Also, take into account, that, due to various circumstances (not just landlord selling/losing the place), you may have to move to another rental after only a year or two, and to deal with that hassle all over again. Your credit scores may affect then your ability to get the rental you want.

[Scarlett]

How easy it is to find a rental you like when you want it?

1900 sf – well, with 3 kids, it depends on the floor plan. If it’s just 3 bdr, it can be a bit tight. I feel that many floor plans tend to waste space. I can understand the desire to have more rooms.

Is it easy to find a house as nice and large as desired in the same or better location on the market WHENEVER you want -i.e. when you sell the place???

IT is a real pain to time those things – and nice homes for renting are not exactly easy to find when you want them, at least where I am looking, and you end up settling. Things that you don’t realize when looking at a rental (vs. buying) start to raise their ugly heads soon after move in. (The floors are squeaky, the whole house is drafty, you get too much noise/sun, the light and bathroom fixtures are not quite right, there is a smell somewhere, stains/cracks you didn’t see, obnoxious neighbor, etc. etc.). And being a rental, it’s a waste of time/money to add upgrades, so you will start longing for your old house, that you ‘owned’ and you could do what you want in it to suit you.

AND It is NOT fun to move, especially with small kids. Take into account the transaction costs for selling, and then the moving expenses? Nevermind the pain of packing and moving a whole house.

Maybe relatively close to your work, there are nice houses that suit your wife’s preferences, that come on the market all the time. But IMHO, you can count only on rental apartments/condos to have something you want when you want it.

It’s not only dollars and cents to take into account. I don’t think you will save that much money if you are going to rent a 3000 sf place, but you really should go and look at a few places for rental (from Craigslist, etc.) and see how many come on the market, how they suit you – go visit them. Do that for a couple months, weigh pros and cons for each place. Look at some low 2000 sf as well, maybe some have a much better floor plan for your needs and see if all of you are ok with it for a few years to save money.

If I’d be in your place, I’d try to find a cheaper rental, even it means staying in the same square footage to save money while you repair your credit. I would upgrade to a larger house when I’d buy it.

I guess what I am saying, do your homework, be aware of all the traps out there in the rental world, know what you are in for and if you are all ok with it (especially that the rental house will not be as ‘ideal’ as your old house, with potentially annoying issues), then, dump the house.

Edit:
Also, take into account, that, due to various circumstances (not just landlord selling/losing the place), you may have to move to another rental after only a year or two, and to deal with that hassle all over again. Your credit scores may affect then your ability to get the rental you want.

[Scarlett]

How easy it is to find a rental you like when you want it?

1900 sf – well, with 3 kids, it depends on the floor plan. If it’s just 3 bdr, it can be a bit tight. I feel that many floor plans tend to waste space. I can understand the desire to have more rooms.

Is it easy to find a house as nice and large as desired in the same or better location on the market WHENEVER you want -i.e. when you sell the place???

IT is a real pain to time those things – and nice homes for renting are not exactly easy to find when you want them, at least where I am looking, and you end up settling. Things that you don’t realize when looking at a rental (vs. buying) start to raise their ugly heads soon after move in. (The floors are squeaky, the whole house is drafty, you get too much noise/sun, the light and bathroom fixtures are not quite right, there is a smell somewhere, stains/cracks you didn’t see, obnoxious neighbor, etc. etc.). And being a rental, it’s a waste of time/money to add upgrades, so you will start longing for your old house, that you ‘owned’ and you could do what you want in it to suit you.

AND It is NOT fun to move, especially with small kids. Take into account the transaction costs for selling, and then the moving expenses? Nevermind the pain of packing and moving a whole house.

Maybe relatively close to your work, there are nice houses that suit your wife’s preferences, that come on the market all the time. But IMHO, you can count only on rental apartments/condos to have something you want when you want it.

It’s not only dollars and cents to take into account. I don’t think you will save that much money if you are going to rent a 3000 sf place, but you really should go and look at a few places for rental (from Craigslist, etc.) and see how many come on the market, how they suit you – go visit them. Do that for a couple months, weigh pros and cons for each place. Look at some low 2000 sf as well, maybe some have a much better floor plan for your needs and see if all of you are ok with it for a few years to save money.

If I’d be in your place, I’d try to find a cheaper rental, even it means staying in the same square footage to save money while you repair your credit. I would upgrade to a larger house when I’d buy it.

I guess what I am saying, do your homework, be aware of all the traps out there in the rental world, know what you are in for and if you are all ok with it (especially that the rental house will not be as ‘ideal’ as your old house, with potentially annoying issues), then, dump the house.

Edit:
Also, take into account, that, due to various circumstances (not just landlord selling/losing the place), you may have to move to another rental after only a year or two, and to deal with that hassle all over again. Your credit scores may affect then your ability to get the rental you want.

[Scarlett]

How easy it is to find a rental you like when you want it?

1900 sf – well, with 3 kids, it depends on the floor plan. If it’s just 3 bdr, it can be a bit tight. I feel that many floor plans tend to waste space. I can understand the desire to have more rooms.

Is it easy to find a house as nice and large as desired in the same or better location on the market WHENEVER you want -i.e. when you sell the place???

IT is a real pain to time those things – and nice homes for renting are not exactly easy to find when you want them, at least where I am looking, and you end up settling. Things that you don’t realize when looking at a rental (vs. buying) start to raise their ugly heads soon after move in. (The floors are squeaky, the whole house is drafty, you get too much noise/sun, the light and bathroom fixtures are not quite right, there is a smell somewhere, stains/cracks you didn’t see, obnoxious neighbor, etc. etc.). And being a rental, it’s a waste of time/money to add upgrades, so you will start longing for your old house, that you ‘owned’ and you could do what you want in it to suit you.

AND It is NOT fun to move, especially with small kids. Take into account the transaction costs for selling, and then the moving expenses? Nevermind the pain of packing and moving a whole house.

Maybe relatively close to your work, there are nice houses that suit your wife’s preferences, that come on the market all the time. But IMHO, you can count only on rental apartments/condos to have something you want when you want it.

It’s not only dollars and cents to take into account. I don’t think you will save that much money if you are going to rent a 3000 sf place, but you really should go and look at a few places for rental (from Craigslist, etc.) and see how many come on the market, how they suit you – go visit them. Do that for a couple months, weigh pros and cons for each place. Look at some low 2000 sf as well, maybe some have a much better floor plan for your needs and see if all of you are ok with it for a few years to save money.

If I’d be in your place, I’d try to find a cheaper rental, even it means staying in the same square footage to save money while you repair your credit. I would upgrade to a larger house when I’d buy it.

I guess what I am saying, do your homework, be aware of all the traps out there in the rental world, know what you are in for and if you are all ok with it (especially that the rental house will not be as ‘ideal’ as your old house, with potentially annoying issues), then, dump the house.

Edit:
Also, take into account, that, due to various circumstances (not just landlord selling/losing the place), you may have to move to another rental after only a year or two, and to deal with that hassle all over again. Your credit scores may affect then your ability to get the rental you want.

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