Should I short sale or go into more debt to pay my mortgage?

I have a home in Roseville and am considering a short sale. We bought at the peak $150,000. My boyfriend lost his job and his new one pays half of what he made. I am entering graduate school and will not be able to work. My lender decreased my interest rate and therefore payments. I have excellent credit. I can take enough student loans to make the mortgage payments but I don’t know if I should. There is no way my house will regain it’s value in the next ten years. Should I go into an additional 65000 of education debt to pay my mortgage or just walk away?

Asked on July 6, 2009 under Real Estate Law, California

Answers:

J.M.A., Member in Good Standing of the Connecticut Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

I am a lawyer in CT and practice in this area of the law.  Given the fact that you have great credit it will be hard to make this decision.  if you do the short sale, then your credit is deminished for at least 2-3 years or so and it may be harder to buy your next home.  If you take out the loans to keep the house, you will have significant debt in loans that you will not be able to get rid of.  If you are confident that you will be able to repay the loans, then keep the house as you can always try to rent it out and move into an apartment for the time being worst case scenario.


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