Can You Relocate if You're Underwater on Your Mortgage?
A new job—and a relocation—could mean more financial stability for you in the long run. The only problem? You owe more money on your house than it’s worth. And you’re not sure how you’re going to make up the difference. So can you even consider taking the new job opportunity? The short answer is yes.
Ask your new job for help
Relocation packages aren’t what they used to be and your new employer might not be willing to buy your house outright. But they might still be willing to help you out with the house. Before you talk to your new boss figure out exactly what is going to help you out so you’re clear about what you’re asking for and what you’re willing to give up in return. Once you know what you want, just go for it. You never know what’ll happen.
If your employer does help you out, keep in mind you probably won’t be making money on your sale. So you’ll need to figure out what type of mortgage makes the most sense if you have a small down payment.
Rent it out
Ever considered becoming a landlord? Even though you’re underwater on your mortgage, this is a way you can turn your home back into an investment. If you’re going to keep the home, you should also consider refinancing or getting a loan modification. That might be a way to lower your interest rate or monthly payments so you won’t have to charge an outrageous rent just to make ends meet. You can also apply for a bridge loan to help you make your mortgage payments until you can find a renter.
Explain the situation to your lender. They might be willing to let you do a short sale. If that happens you’d have the green light to sell your house for less than you owe. The bank would still get something and you’d get out of your loan obligation. Just know a short sale can stay on your credit score for seven years.
Defaulting on your mortgage is going to mean your credit score is going plummet and you’ll have a hard time getting another mortgage (or even renting) in your new town. But depending on your situation, it might be worth it. Sometimes desperate times call for desperate measures.