Thread: Fixed income...Retiree...Current home slightly underwater

Hey all, here is the deal

Mom lives in Florida. The house is apparently worth about 30 grand less then what her mortgage is. Her mortgage is $120,000....she owes $110,000. Its a 55+ community, single family home. Houses have been selling for around $86-105 grand in the neighborhood.

She brings in about $2300 a month from different benefits she recieves and work income.

Savings are going away fast, only about $8,000 left to her savings.

Out going payments are currently close to her entire months income. Maybe $100 less.

Shes older, widowed, and cant work forever.

She would like to move out of state, but with the houses only selling for like $100-105 tops around here....she wouldnt have enough to pay the bank back in full.

Another thing is...if she moved out of state without her job, half of her income would be gone and she would only receive $1500 monthly from various benefits she receives. In this economy, getting work out of state is not guaranteed, but her $1500 a month she receives from benefits are guaranteed.

Any advice or similar situations?

I here in Florida if you walk away from your home they can sue you for the amount due after foreclosure or something like that???

Deed in Lieu? Not to sure how that works, would that be an option??

Short Sale? Again, not sure how it works....option?

Basically if she was to magically not have any responsibility to her current house anymore, she would have a guaranteed monthly income of $1500 every month and about $6,000 to put down on a "new" house. Obviously not new, but you know what I mean.

She doesnt want to rent, wants to own a little home in a much more affordable area. Better that way to, because she has a few loud little dogs and birds.

Her credit at the moment is pretty good.

I just dont know how we can get her approved for a small mortgage on a "new" house with the current responsibility of this house.

She would only be looking for a tiny home far away from big city or anything like that. Maybe just like a 40 grand home or something around there.

I figured if her new mortgage would be around $500, she would still have $1000 leftover every month for her utilities and some credit card bills.

Finding work out of state in her new area is not guaranteed, but a possibility.

I tried to be specific as possible with the situation so you can get a good clear picture of whats going on.

Anyone have any advice on what to do with the current house and the best way she would have a chance on being approved for like a 40-45 grand mortgage on a smaller "new" house.

If need be, there is a member of the family who makes very good money and can most likely be used as a co signer for a new mortgage, but would rather not go that route.

Please help with some advice.