House Is Not a Home?

I have friends who forclosed on their house and are now renting a bigger one..They couldn't find a buyer in time.. @#it happens...Hopefully you will find a buyer who doesn't mind remodeling..Good luck!

I am unlcear on what you are trying to do. Are you looking to short sell or are you looking to sell and pay out-of-pocket the balance of the loan.

We have our house listed and will take about a $40,000 hit on the property, which we will pay out-of-pocket. Our reasons are fairly simple... LOVE our house, but it is now an hour + from my new office and the commute has significantly impacted our time together as a family. The monthly gas for my SUV is outrageous and the commute often means that I leave the house at 6:30 in the morning and get home at 5:00 pm (if there's no traffic). We'll rent for a while to recoup our losses and then consider buying when we have our savings back "up" again.

Look into this, though b/c if you don't have the "cash" to pay off the loan then you will be looking to short-sell. To do so, you have to come to an agreement with the mortgage holder and that is not easy to do. If you are able to make your payments, they may not allow you to do so.

Not something to "jump into"... something to research and really think about. If you've lived there for 8 years, why is it falling down around you? Have you not kept-up with the property? If you are not responsible home owners, then you really would be better-off renting where someone else is responsible for the upkeep!

If the bank forecloses, they will sell it at rock bottom price. You will still have to pay taxes on the difference between what it sold for and the tax value. In some cases, this could be quite a hefty bill to pay. So on that note, just clean it up, put it on the market, expecting that you will take a loss, and sell it. You will be left with a balance to pay off, but your credit will be intact. And you will be no worse for wear than if you had to pay a tax bill.

sooo, are you asking if it makes sense to rent & let the landlord be responsible for repairs.....rather than making mortgage payments & be responsible yourself for those repairs?

In the long run, it's always better to own your own home. Even if you take a hit on the equity....even if you have extensive repairs.....in the end, you will still have something to show for your money. & as I said, it may reflect a loss....but if you owe zero at the end of your mortgage & sell, then it's all profit. Conversely, if you rent for 30 years.....you have nothing to show for those monthy payments. It's all a case of whether or not you have the patience to realize a return on your $$$.

You guys are young yet. If you can make the mortgage payments I think you should stay with that investment. The market will change and your home will be worth more one day in the future.
Renting and following someone elses rules can be a pain.
I'd say keep chugging on the house you are buying and try to fix it up slowly but surely. Once you have it fixed well enough, you can always use it as a rental property and buy yourself a bigger house.

On the one hand it sounds like you don't like the upkeep on your house and on the other hand you would like a bigger home than the one you've got.
Those are 2 separate issues.
Any property you own requires some upkeep. Fix one thing at a time. Save and budget for it.
Wanting a bigger home? A lot of the time your current house can be 'bigger' if you take the time to empty it of things you no longer want/need (and if is something you can sell on eBay or Craig's list, you can earn some money for a few of those repairs).
Boys can't share a bedroom anymore? What other spaces have you got that can be used as bedrooms? My Mom's house had 2 bedrooms. My sister and I shared for a long time but then the room off the kitchen (formerly used as a tiny dining room, then as a play room) became my bedroom. It was tiny, but it was mine. People make use of space in attics and basements as kid's rooms too as long as it's insulated/heated/cooled space. You can be very creative.
I'd try not to move into a rental yourself while renting out your current home.
Rental property devalues faster than if it's your residence and the money you'll bring in for rental income will not cover what you spend in renting another, larger house and does nothing for saving up for those repairs (which still have to be made).

Maybe you should listen to that little scared voice that's whispering in your ear?

The economy is poor and will probably get worse before it gets better. You have a place to live that you own, selling it will be difficult, walking away will damage your credit and be an unwise decision for your future.

Do you really want to rent? Or do you just have visions of more space clouding your vision? It's expensive to move and a lot of physical labor. Landlords have one plan, milking their rental units for money. They don't fix them up as a home owner would. They buy sturdy utilitarian materials made to last through a string of renters, they try to get out of repairing things and get upset when anything breaks or leaks. If you call them often with problems or complaints, they will often raise the rent or raise it when you renew your lease. Most landlords paint their houses white inside and do not want you to personalize with colors or put nails in walls. And they can come inside your home with, 24 hours notice, anytime they want.

A good plan would be to start working on your own home. Watch some of those shows where people fix places up or flip homes. Why not change bedrooms with your kids? Partition off the master bedroom into two rooms so they can each have their own space, while you have their smaller room? Do some renovating to create more space while you wait for the economy to improve so that you can sell.

Well, our experience made sense. We short-saled because we were in a 2 bedroom home and just had our 3rd child, and we owed way more money than our house was worth. We now rent a 4 bedroom house for $350 less than what we were paying. Now, is it worth it? Personally, I can't wait to own again! While we have been able to paint and turn the home into our own, there are many things we can't do. We want to put in a sprinkler system, owner won't pay and we aren't going to sink the money into it for something we don't own. Same with new windows and the house needs some paint touch-ups, all things we really want to do because it would really improve the home, but owner doesn't want to pay. It was the best choice for us to rent at the time and still is the best choice, and I am happy we did it. I don't regret a thing! I am happy to be out of our home that didn't work for our family anymore. Just be aware of those things. Necessity things, like AC going out, the owner does have to pay and take care of right away. As for the short sale, we were so lucky, it was a really smooth and quick process. Just make sure the mortgage company signs saying once this is done, you will not owe any more money. We had ours sign. I have heard that some companies will come after you for the money. Now, my sister is doing the same situation, but her home is still listed and currently going into foreclosure because the bank is sticking to an amt they want, and nobody wants to pay it. She is young and says it is still better than being in a home that will take 20 years to recoup money on. (She bought her home at the height of the market in '06). Anyways, start doing your homework, that is the first step and go from there! And good luck with whatever you decide!

Interested in what you have heard. Best of luck, k

I think I would read up on this a little more before taking the jump. I think I read somewhere at one time that the IRS can take your mortgage payment amount and add that to your earned income and then tax you on your missed mortgage payments. Not sure if that was exactly how I read it, but I know there is alot more to it then just walking away.

Good luck with your decision.

Where are you located? That's the first location to consider. And do NOT go to a mortgage specialist who charges a consultation fee.

Renting is fine. If that what you want to do. The "American" dream of owning your own home has definitely been tarnished by the recent downturn of the real estate market. Each of us needs to figure out what is practical and reasonable for us and our individual family situations. Check around at the availability of 4 bedroom houses in your area as well as the rental pricing. You will also want to know if the home is in financial distress. The last two places some friends of mine have rented have been in the foreclosure process which they did not know about. Both time they have had to move which has been very hard at the last minute and under duress because of the stress of the kids in schools and everything that comes with moving on a deadline that isn't your own.

You have choices about what to do with your home. You may want to consider holding on to it and renting it out while you rent. You could use the services of a licensed real estate agent to manage your property. This way you don't have the stress of tenants and any charges by the company can be written off against the rental income. This may be a viable option while you wait for the market to catch up to the price you paid for your home. You would still need to make certain repairs to your home but if you are renting it out all repairs are expenses against your rental income on your tax return. The question becomes will the rent you can get for the place cover your expenses on the place?

I would probably go that route before just moving into a rental unit myself.

I hope this helps.

We short-saled our condo and now rent in the same complex. Best thing we ever did. Our rent is half of what we used to pay for mortgage and condo fees. We love our landlord and he let us paint and put pictures up and all that, so our current place is just as much our home as the one we owned. In Florida as long as it is the home you live in, you are not responsible for the taxes if you do a shortsale or foreclose (ie they do not see the shortfall as income, so don't worry about that). I think you would be better to walk away but it all depends on if you bought at the height of the market or not. We bought at the top and we would never make back what we paid. Just to give you and idea, we bought for $260,00 and sold for $70,000 - crazy!!

I am someone who is leaving my house & renting. But, my circumstances are much different than yours.

There are pros & cons to owning & renting. They can be debated for hours.

What you must separate is the logical, financial, & emotional aspects of owning & renting.

With the market being so bad, don't expect a sale to come quick & easy. Buyers have many places to choose from & one in need of repairs, or where the family seems to be bursting out of, most likely won't sell right away. Short sales are a gigantic nightmare, to be blunt. No one wants to deal with them anymore, buyers, the mortgage company, etc.

There seem to be more people renting their homes, and that may mean that they love their home & want the best for it, so they may be apt to take care of it, should a problem arise. You'd have to really search for a situation like that.

What is comes down to is your exact question... what makes a house a home? No matter if you own it or someone else owns it, you make it a home.