Reply To: Underwater homeowner
Without knowing your full situation, it’s hard to say. If you itemize your taxes, you are probably paying quite a bit less in taxes, if not no tax at all. You do not mention your age, I hope you are 62 or older or you are killing yourself by withdrawing from your 401k (10% surtax! Ouch!) Can you raise the rent, even incrementally? Even $100-200 a month would help. If you got a mortgage in your current house, you obviously have decent credit, refinance the rental if you can and stretch the mortgage repayment term on your CA house (warning, rental property is never given as good a rate as owner-occupied). Don’t accept a 5-year balloon unless you can pay it off in five years (unlikely, it sounds). I would spend some $$ on a for-fee financial planner (around here, about a grand for a comprehensive) and figure out your options. (That’s also tax-deductible). Good luck! I definitely would not just walk away, it torches your credit for years, you never know when you will need it.