Underwater Homeowner Alternatives Wanting to Move
Copyright (c) 2011, Deanna and Jim's GOLD Team
Oftentimes homeowners contemplate relocating for reasons other than financial ones, but discover that their home's current market value is less than what they owe plus seller side closing costs. In this circumstance there are some choices, but they are not so palatable to many.
1. If you can keep your payments current just stay put. Many times the status quo is actually preferable to the alternatives.
2. If you must move then consider becoming both a landlord for the underwater house and a tenant where you are relocating. You may need to swallow an out-of-pocket negative cash flow if the rent you gain does not cover the mortgage on the house for which you are the landlord. This negative is tax deductible for many people and is thus a less than 100% loss.
3. Sell short; this will damage your credit, but is better than foreclosure.
4. Sell at market value and bring the cash to the table to buy your way out.