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My husband and I have recently discovered that we are expecting and as such need to move to a bigger home in a better neighborhood. The only problem is we are upside down in our mortgage and while we are not hurting to pay the mortgage there is no way we could cover the difference in what the house would sell for and what we owe.
It is just incredibly frustrating to know that we could get a much bigger house in a much better neighborhood for less than the house we are in now. I have no idea how we will manage to raise a growing family in a house this small and in an area where I'm not sure I would want them to play outside.
We live in Florida which is another issue meaning that even if we find a way to short sell the bank can still come after us in a deficiency judgment which makes it feel like we'll be stuck in this house forever.
No. You need to provide a lot of proof of a hardship to the bank before they approve the short sale (bank statements, W2s for 2 years, and proof of hardship like a job loss, death in family, etc)
I'm sure everybody who is upside down could find property that is better than what they have now, for same or less money.
Anyway, short sale will hurt your credit score by hundreds of points, which will make difficult to obtain a loan. And what about downpayment? You won't get short sale if bank knows you have stocked up nice savings for down payment for next home.
I am not trying to insult, or be mean. When one family commits to a mortgage, when home is upside down does not change the facts - especially if their financial situation did not change to worse.
You can try a short sale, but you won't be able to move into a larger home. First you won't have a down payment because the bank would require that you give them that money if you have it and second your credit score wouldn't be good enough to qualify for a loan.
Your only way to move up is to qualify for two mortgages and then rent out your current house. Since you are underwater you won't be able to use any rental money from your current house towards income for your next house.
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