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Old 01-29-2012, 06:58 PM
 
5 posts, read 13,755 times
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My wife and I are preparing to send our first child to kindergarten and would like to move from our home to switch school districts.

We're upside down on our home in Missouri. We owe $385k and it's worth about $315k.

Would it be possible to move and transfer our negative equity to another home? We both have credit scores a touch over 700 with no negative history, including our mortgage. Our income is solid as well.

Any thoughts on whether this is even possible? We currently have an 80/20 loan with Wells and a local credit union.

Thanks!
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Old 01-29-2012, 08:40 PM
 
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The short answer is NO.

The long answer:
You can move, but you will probably owe the $70k (difference) and you'll have to rent.
No way will another bank let you transfer that owed money

I have a neighbor that bought a new property and as soon as he took possession of it, he short selled the old home and he's underwater $150k on the old home. Still in the process now.
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Old 01-29-2012, 08:54 PM
 
Location: Up above the world so high!
45,270 posts, read 86,103,760 times
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Sorry, no, this is not possible. You owe your lender a lot of money. He is not going to let you out of that.

Getting a new home requires getting a new mortgage, and with this kind of debt you will not qualify.

Your choices are...

Stay in the home

Find a renter to pay you enough rent to cover your mortgage

Sell it for the $315,000 and make up the rest you owe to the lender out of your own pocket.

Or, walk away from the home - which will ruin your credit and keep you from getting another loan for years.
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Old 01-30-2012, 12:24 PM
 
Location: Up above the world so high!
45,270 posts, read 86,103,760 times
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one more option...

What Happens When You Walk Away From Your Home? - Yahoo! Finance

Though I wanted to add, since you are considering moving strictly to change school zones, why not stay put and put your child in a private school instead?

That could prove to be much cheaper and less financial disaster than any of the other options.
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Old 01-31-2012, 05:41 AM
 
5 posts, read 13,755 times
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Quote:
Originally Posted by lovesMountains View Post
one more option...

What Happens When You Walk Away From Your Home? - Yahoo! Finance

Though I wanted to add, since you are considering moving strictly to change school zones, why not stay put and put your child in a private school instead?

That could prove to be much cheaper and less financial disaster than any of the other options.
thanks for the tip. we've thought about this. private school for 2 kids (non-denominational) is about $30k/year. we're actually considering taking that money and paying the house down so we can move instead. it would take 2 to 3 years, depending on the market. we have a very strong public school district close by.
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Old 01-31-2012, 05:46 AM
 
35,121 posts, read 37,862,490 times
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Personally I would stay in the home and put it up for sale while trying to pay down the mortgage as much as possible. After it is sold you can move to a smaller home that is more affordable and in the school district you really want for your children. Hopefully by the time it sells you will be in a better position on the mortage and not owe as much on the difference if you end up owing any at all. If you like the area you live in now the other choice is as someone else posted is to put your children in private school. I would not voluntarily continue to pay part of a mortgage on a home I was not living in any longer.
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