Today's housing market has put many homeowners in a position where they are underwater on their home. In most cases it makes the most sense to just stay in the home until it appreciates in value or until the LTV (loan to value) amount is at a place to be able to refinance. However, not everyone can afford to stay in their home; maybe the family is growing and you are looking for something bigger. If you find yourself in a position where you are in the market for a new home but your current home has depreciated it may be time to try your hand at being a landlord.

The renting market is very active right now with many former homeowners who went into foreclosure now looking to rent. In fact, monthly rent is higher than mortgage payments in most cases. Do yourself a favor and start out by researching rental homes in your area to see what kind of rent you could receive for your home. It is likely that you could get close to the same monthly amount that you are currently paying on your mortgage. If you can come close to breaking even on rent payments and find the home you are looking for at a similar monthly mortgage payment, then renting out your home that's lost value may be a good option. If you were to try and sell the home you are either going to have to bring the cash to make up the difference or you're going to have to do a short sale. You would want to avoid a short sale, though, because that would keep you from being able to buy a home for three years. Even if you come up slightly negative on the rental, say your mortgage payment is one or two hundred more than what you receive from renters, just think of that loss as extra payment on your new home. This allows you to still afford to go out and buy the home that fits your needs without hurting your financial portfolio in the process. You may even be able to make some money if you can rent out your existing home for more than the monthly mortgage payment. At the end of the day try to avoid a short sale at all costs a look for the decision that makes the most sense financially. When looking for a new home be sure to shop around and find a lender that works hard for you and has the lowest fees. Call us at RP Funding to discuss your options and speak with one of our qualified loan officers who will provide you with the information you need to make an informed decision.