Please advice on what to do - new job out of state

[marlon]

Hello folks,

I got a nice job offer in the beautiful California 14 months. Job has been going very well and I really like the area (Alamo, CA). I am professional and I never in my life had credit issues and ethics and honesty is important to me and my wife.

I have a condo in Redmond, WA for 5 years. Loan debt is:$280K. Condo was appraised at $245K. HOA is $320/month. Total mortgage payment + HOA= $2,050/month (I put 0% down) Condo is rented for $1,450/month. It means I have to put every month $600 (not counting reserving about $100/month for maintenance). I did the HARP refinancing thing at 5.125% and now I see I can't refinance again if rates are lower. Great.

I Alamo, CA where I live (and I really believe I want to live in this area for long-term) house prices are now more attractie than renting. Renting here is very expensive ($2,500/month for an OK 3 bed house). So I thought about buying an old house ($450K) and then use cash in near the future to remodel the whole thing. Then I would have no choice but to let the condo go into foreclosure, because it is kind of hard to add US$700/month to keep this condo afloat. I figured if I can secure the new loan, then technically speaking I could be OK (my salary is enough to qualify and carry both mortgages).

My wife is pissed saying it is not honest from my side if I do this, getting loan for new house (but I would do because it is cheaper than renting) and then abandoning debt from condo.

I do not know what to do. If I do not take new loan house I am paying US$2,300 in rent plus throwing money in the garbage apparently paying for the condo.

Please advise.

[Scotsman]

Sell the condo at a loss, now, before things get worse. Continue to rent in Ca. and wait for the second leg down in housing prices. This is far from over.

Don't have the cash to cover the condo loss? What are you doing thinking of buying again? How about getting out of debt and building some real reserves.

[davidlosh@davidlosh.com]

Oh, alrighty, let's go back to a ray trick that I have been giving him a hard time about. You are proving a point that in many areas it is getting cheaper to buy than it is to rent, but that will change.

In the 1980s there were a lot of wrap around mortgages that became illegal with the due on sale clauses.

In my opinion there may be a time, soon, where this is a viable practice through the lease to own programs.

The problem with lease to own is that some one is paying you money for your problem of a falling asset value. Where that changes is in the ability to amortize the loan more quickly.

It's your problem you should pay, but you chould agree that if some one takes your mortgage over you will pay $500 a month to the principal balnace for a year. You can pay more to make the deal better. The income shows up on your tax return, it's a mess, but it should also be put into an escrow account with an attorney.

You need an attorney no matter what you do. Best of Luck, I was just thinking out loud.

[Robroy]