Refinance or walk in California

[cleary]

I'm new to the forum and seeking advice. I purchased a fixer in the mid-2000's for around $300,000. Always made payments, including some extra principal payments. Along the way I also made some improvements of about $40,000.

Now it's 2012 and I'm wondering why I have hung in so long. The last appraisal was in the low 200's. Not terrible but not good, and a little below what I still owe. There is still a lot of work (maybe $30,000 or more) that would need to be done in order to sell (or even rent it out) and it's just not looking worth it to continue to try and make this work, in the hope that the house may someday appreciate enough to make the whole thing worth it. I could easily shave $1000-$1500/month+ in expenses by leaving and renting instead, and my desire to ever own a home again seems to be gone. I have no real ties to the neighborhood, so the only real loss would be financial.

I could refinance to keep going, but it's very tempting to just be done with it and stop worrying. If I hadn't already added some additional investment, I don't think there would be any question. But even with that, the extra cost and pain of owning (and over the long-term future even) seems hardly worth it.

Any advice would be welcome. Glad to have this forum, if only to get good information from others going through similar problems.

[cleary]

I should also say that I make enough money NOT to qualify for the normal hardship assistance programs. A HARP refinance would be about it.

[russellaz]

Your question is the same as many of us have asked.. in our case, we finally decided it was time to stop hanging on. In our case, we are very undewater (balance 250k value 150k) - we wont save as much shifting from own to rent, probably only about 500/mo, but also drop a worthless debt. We considered HARP and could reduce our expenses by about the same amount, but still be hung with a house we cannot leave.
Other factors for us - we really arent happy with the house we are in, it is aging to the point repair costs will start to grow. etc - if we were in a normal position we would sell it and buy somewhere else, but we are not!

In the end you have to make the decision that is right for YOU - for some, staying and paying is right, if they love their home, expect to be there for the 10-15-whatever years for it to not be negative, etc. For others, it is purely a monetary decision.

Good luck with whatever direction you go.

[cleary]

russellaz: Thanks. Yes, this is a very personal decision. Of course part of the problem is that there are way too many variables to consider A refinance looks attractive (and could reduce the cost) until I realized that it would really lock me into the house (the current loan is the original).

I'm single so my choices for moving to a rental can be very cheap, which will almost certainly be needed to make up for this loss.

Thanks for the good wish. Same to you :-)

[cleary]

After spending way too much time thinking about this, I'm planning to walk starting with the next payment. What a complete soul-suk this is. Will send updates :-)

[russellaz]

Soul-suk is an apt way to describe it. We agonized for almost a year over what to do before finally making the decision to walk. And through that analyzing, calculating, recalculating reasearching.. never ending stream of information.worse, now that the decision is made, the waiting game begins.