Upside down mortgage - WWYD?

[cschin4]

We need to move. We have 3 children now, and this house no longer fits us

Why do you "need to move"? Why doesn't the house "fit"? What does that mean? Do not fall into the trap of you "need" more bathrooms, bedrooms, sq ft, bigger yard, etc. If you want and can afford it fine. But, we upsized to a larger home and I hated it. It had 3 BR, 2800 sq ft, 4 BR. It became very impersonal. Everyone had their own "space". Well, part of being a family is being in each other's faces once in awhile and learning to share and interact. I also found that my 2 sons much preferred sharing a bedroom than they did having seperate rooms. Anyway, we downsized and we have 3 kids. I love my smaller house and i feel our family is closer as we have had to learn to share, the kids play more together, etc. And, as for a big yard, you don't need it either. Kids don't need a huge yard. A small patch of yard is more than enough. So, as for fitting, you can make yourselves fit or not.

[cschin4]

Another point, are you buying a more expensive home? Are you willing to risk your SAHM status to lose money on your current sale, and then buy a more expensive home? How does that make financial sense for he lifestyle you are choosing to live.
As for a house's value, the value of your house doesn't mean a thing except when it comes time to sell. If you are staying put and living in it, it doesn't matter what it is worth.

[Joan.of.the.Arch]

This is another reason we want to move - we have shifted our lifestyle to be very frugal/simple and we are expanding growing our own food, etc., and are limited by our lot. We also are not allowed to keep chickens, etc., things that also would help us maintain the simple lifestyle we are after.

Now this is something I identify with. How big is your lot? We would not have bought the house we have if it did not have good gardening space. I keep trying to get my spouse to think about keeping chickens for us, as I don't want to do it personally, but want the benefits.

However, it has turned out there are other ways to get land for gardening, beyond having a large yard. I began an ornamental garden at the entrance to our street the same year I bought the house. Within three years of moving here, I had planted a small vegetable and flower garden for my next door neighbor. After a time, I ended up caring for her whole yard, expanding the garden as much as I wanted. After that, a neighbor offered her attached lot for me to garden, again in a combination of fruit, vegetable, and ornamental. Last year, I located a vacant lot about two miles away, owned by the city. They will rent it out long term for gardening. I t will be my orchard (peach pits are germinating at this moment.)

It turns out a small number of chickens in a city yard are actually legal, here and in many cities. This bit of knowledge had faded away once huge supermarkets instead of corner markets had become the norm. Ironically, my neighbor's attached lot that I garden was a chicken yard decades ago.

My point is that there may be other alternatives for finding places to grow more of your own food. Nearby neighbors may only ask for a tidy garden, regular bouquets, and a share of tomatoes.

By the way, my house is now about 990 square feet. Before the late 1940's it was only 450 square feet with one bath, yet a family of eight lived here at the time! That was not an unusual set up in those days, though I concede that we do live quite differently and have way more possessions to house nowadays.

[disneysteve]

By the way, my house is now about 990 square feet. Before the late 1940's it was only 450 square feet with one bath, yet a family of eight lived here at the time! That was not an unusual set up in those days, though I concede that we do live quite differently and have way more possessions to house nowadays.

This is a very good point. We recently took a tenement tour of the Lower East Side of Manhattan. The tenements are small apartments with a living room, a kitchen and a bedroom - that's it. Bathroom was shared in the hall. These apartments housed complete families with 2 or 3 or 4 children. In many cases, they also housed the family business, often a textile business - tailoring, making clothing, etc. So it was quite cramped. No privacy. No space.

Obviously, this isn't how we live today but the point is that people can put up with a lot if they want to. I have cousins who adopted a family of 6 children from Columbia years ago. That was in addition to the 1 adopted child they already had. At the time, they lived in a modest 3 bedroom townhouse, so that meant 9 people living in that home. Between the 2 kids' bedrooms, there were 7 beds - 3 sets of bunk beds and 1 single. That's what they needed to do to make it work for them.

[altjat37]

"You bought your current home with 0% down and are now upside down and likely selling it at a loss so that you can turn around and buy another home with 0% down, possibly burning through your savings in the process. I'm not sure how you are perceiving that as living within your means."


I consider us to be "living within our means" in the sense that we do not have more obligations than we can afford, we are not seeking to live a flashy lifestyle on a modest income - like many people I know have done.

"It sounds to me like you have already made up your mind that you are moving and nobody is going to convince you otherwise."

Yes, we have already listed the house for sale so our goal is to move. Perhaps I wasn't clear... I was seeking more of advice on HOW best to pay off the difference on our existing mortgage, etc. Since this is our first time selling, I didn't know if other options existed for this situation.


It is what it is. It is worth market value and no more. It is only worth what someone is willing to pay and what you are willing to sell for. You can ask any price you want but you will only get what someone thinks it is worth.
I guess i see a lot of people who allow money to get them "stuck". They don't move on with their lives or situations because of not wanting to take a loss or not getting what they think they deserve, etc. But, that can also paralyze you in moving ahead with life. Sometimes you have to just be patient and sit and wait for the right buyer. Sometimes you just take what you can get and move and realize the cost of continuing to own a home you no longer need or want, the cost of maintenance, taxes, upkeep of an empty home if you have moved on."


Yes exactly, I agree with you! We have worked hard to save up this $11k in the past YEAR for the purpose of getting into a house that will fit with our long-term goals (and again, I don't mean a mansion to show off or anything like that.) If we could break even with our house and had to use our $11k on a downpayment in a different market, what's the difference? I was just curious about options for getting out of this house with the least financial hit, that's all.

"Why do you "need to move"? Why doesn't the house "fit"? What does that mean? "

I could try to explain but I don't think this is really the place, nor is that the advice I'm seeking from posting here. We purchased this house with no children and now we have 3, we are homeschooling, also running a business from our home... there are many reasons that this house is hindering us. We are making the best of it, as we will continue to do until we can sell it.

"Are you willing to risk your SAHM status to lose money on your current sale, and then buy a more expensive home? "

Absolutely not. I am raising and homeschooling our kids no matter what. I also have a business from home (with my husband) that we both work on. We would never move into a house that we could not afford with our existing income. Not sure why everyone is assuming this... though I know a lot of people do this.

"My point is that there may be other alternatives for finding places to grow more of your own food. Nearby neighbors may only ask for a tidy garden, regular bouquets, and a share of tomatoes.

By the way, my house is now about 990 square feet. Before the late 1940's it was only 450 square feet with one bath, yet a family of eight lived here at the time! That was not an unusual set up in those days, though I concede that we do live quite differently and have way more possessions to house nowadays."

Yes this is what I have been telling myself thus far, and we are making the best of it now Our town definitely prohibits backyard chickens and fines people aggressively. We have torn down our shed and put in a large garden. So we are (and will continue to) make the best of it while we're here!

[cschin4]

Did you already find another home you want? Or, are you going to sell yours now and then look? Or, are you buying on contigency? Since you have no other debt, money saved, and have looked at the cost with your preapproved loan rate it sounds like you are planning a move that will pretty much have you in the same financial position as before.
You don't have to explain why you want to move, that is your choice, but it is good practice on advise boards to just help people consider all of their options as it is helpful to think of every possibility. Many times the cheaper thing in life can be to simply stay put and do nothing, but also that can prevent us from moving ahead and moving on as well. I have moved, taken chances and calculated risks as well. I jumped off my own planks in starting my own business and took a chance and it worked out and has been great for me and my family. It could have failed as well. Sometimes experience is the best teacher.

[altjat37]

"Did you already find another home you want? Or, are you going to sell yours now and then look? Or, are you buying on contigency? Since you have no other debt, money saved, and have looked at the cost with your preapproved loan rate it sounds like you are planning a move that will pretty much have you in the same financial position as before.
You don't have to explain why you want to move, that is your choice, but it is good practice on advise boards to just help people consider all of their options as it is helpful to think of every possibility. Many times the cheaper thing in life can be to simply stay put and do nothing, but also that can prevent us from moving ahead and moving on as well. I have moved, taken chances and calculated risks as well. I jumped off my own planks in starting my own business and took a chance and it worked out and has been great for me and my family. It could have failed as well. Sometimes experience is the best teacher."

We've looked at several houses that would be great for us, in the same price range as we paid for our current house. We can't/won't purchase one until this house sells, but we may make an offer that's contingent... we'll see. Our house was just listed a week ago so we aren't in any rush, we'll just see what happens.

I do appreciate the opinions. We've gone over the option of staying in this house extensively.... we first considered selling this house over a year ago and after meeting with realtors, decided to wait a year and save up first - knowing we'd be taking a loss.

It seems there is no other option for "paying off" the balance on a mortgage, we will have to just bite the bullet and bring a big fat check to our closing I suppose.

[cschin4]

Yes, you will have to pay off the mortgage when you sell it. ANd, you need to anyway to close that chapter.

[snafu]

Best wishes, hope you're a successful seller. Interest demonstrated by realtors and buyers in the 1st three weeks of listing is crucial. Buyers will only be interested in recent sold comparables, condition of your house on viewing and effective negotiations. I hope you have a detailed marketing plan worked out with your agent.

[palmettogirl]

"Did you already find another home you want? Or, are you going to sell yours now and then look? Or, are you buying on contigency? Since you have no other debt, money saved, and have looked at the cost with your preapproved loan rate it sounds like you are planning a move that will pretty much have you in the same financial position as before.
You don't have to explain why you want to move, that is your choice, but it is good practice on advise boards to just help people consider all of their options as it is helpful to think of every possibility. Many times the cheaper thing in life can be to simply stay put and do nothing, but also that can prevent us from moving ahead and moving on as well. I have moved, taken chances and calculated risks as well. I jumped off my own planks in starting my own business and took a chance and it worked out and has been great for me and my family. It could have failed as well. Sometimes experience is the best teacher."

We've looked at several houses that would be great for us, in the same price range as we paid for our current house. We can't/won't purchase one until this house sells, but we may make an offer that's contingent... we'll see. Our house was just listed a week ago so we aren't in any rush, we'll just see what happens.

I do appreciate the opinions. We've gone over the option of staying in this house extensively.... we first considered selling this house over a year ago and after meeting with realtors, decided to wait a year and save up first - knowing we'd be taking a loss.

It seems there is no other option for "paying off" the balance on a mortgage, we will have to just bite the bullet and bring a big fat check to our closing I suppose.

How did it work out? Did you ever sell? I find this interesting b/c like many we are in similar situations. I felt sorry reading these posts that no one even attempted to offer advice for you except stay in your home(which you already stated wasn't an option). We too have to move b/c my husband is retiring and will most likely be working in another area. We have already been separated for 3 years b/c he got transfered with the military and we could not afford to sell the house since we were upside down. Also my daughter was in high school and I thought it would be better not to move her. I will be selling at a loss(judging by what other houses have sold for in the neighborhood). I could rent but that would not free up my VA loan plus I probably could not rent for equal to the mortgage. I'm currently paying extra to the mortgage to help pay it down before next year when the transition will come. With the job he will have there are only a few places he can move in his career field(nuclear power). His income will be good and I work too so we have no problem paying off a personal loan if we have to get one to close the house. I've already been waiting out the market 3 years so I'm not going to stay separated from him any longer. When he retires and moves to the new job then we will sell at a loss and move on... Lessons learned. All the other times we transferred, we made money...oh well.

[nick__45]

Men will always need a roof over our head so housing market will recover. Just take a look at your own situation, you want more space and will buy a bigger house even though you already have a house and it has served you alright thus far. Growing up poor, I lived in a 800-sqft house with 14 other people. Now I have 3500-sqft house for 4 people.

[maat55]

Personally, I would stay put until I could afford to make up the difference, retain a 3 months EF and pay 20% down on the new home.

I would likely look into a refy on the current loan to a 15 year note at a lower rate. This might speed up your equity.

[ceejay74]

I think they might be responding to the original poster without realizing your new question. Maybe you should start a new topic, since this OP doesn't seem to be answering.

I'm kind of curious too. I'm underwater and even though I keep paying down, seems like my place keeps losing value. Luckily we don't have to move now, but we want to find a way to get to another country and, if we found that way suddenly, we would have to decide the least-bad option for dealing with this place.

[dawnwes]

OP hasn't even been on the boards for almost a year.