Hi everyone. Long time reader. First time poster.
Need some advice on how to proceed from here. And thank-you in advance for reading my long winded story. Unfortunately money is always more than just financial...it is also personal...
I want to leave my current neighborhood (bad schools...) and move to another neighborhood (better schools). I want to move by next Spring/Summer 2015. My oldest son will be starting middle school and I want to move by the beginning of middle school to give him a chance to meet new kids. Schools in my area have like 5 elementary schools per town and then they all go to the same middle and high school. I figure by moving then he will be better off.
Bought my current house in 2006 in the top of the housing bubble. Paid $375K for it. Tried selling it 2 years ago for $310K and would not go. Been talking to realtors and researching and I think the "real" number I can get for my house is $260K. By spring of next year I will owe about $275. With realtor, closing cost, lawyer plus a few thousand to get the house up to snuff to put to market, I will have to bring about $30K to the table. Renting out this home brings in about $1000 less than my mortgage including taxes and insurance. So I would lose about $1000 plus another other major thing that comes up. On the other side of this idea is "losing" $30K to bring to the closing table is 30 months of loss from the $1000 if it is indeed rented out every month. Or about 10 months of vacancy. My rental market is very strong in this area. Homes/apts are rented quickly.
Other info:
-I have enough cash flow to pay two mortgages if someone doesn't pay.
-Even after buying the new house, I will have 6 months of mortgage for two homes.
-Due to my new income, I think I can completely pay off house in 2017 assuming the house is rented the entire time.
-Yes, I "have" to move.
-I really don't want to sell the house not due to sentimental attachments but because house selling while still living there WITH kids is so hard!
-Spoke to lender and says if I want to qualify for two mortgages and rent one out, I have to pay my current mortgage down 30% of market value and or loan amount (not there currently...trying to decide what to do with money saved). If I do this, it will cut into the new house down payment (which would be 20%).
And please people, I already know how stupid I was to buy the house so be kind! I am just trying to clean it up :)
I have a good idea what the realist thing to do here is. But maybe then again I think I need a cold hard slap in the face.