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Summary: I am renting a property at $900 a month that actually costs about $1065 a month. Taking a $165 per month loss and I need to know how to recover some of that cost.
Full Story: Several years ago as a young 20 something I had a large sum of cash on hand. This was before the housing market took a crash. I decided to use the cash to purchase a home which is now worth 70k less than what it was purchased for. I entered into the deal basically because I was young and stupid, needed a safe investment for my money, and wanted to build a life and some credit for myself and in large part because I was talked into it to provide a tax break for my family (more on that later). At the time a house seemed like a perfect place to put it in. Especially since I bought with 30k instant equity. Similar story to a lot of folks, I know... but here comes where it differs from theirs-
At the time I didn't have enough credit or income to qualify by myself. So I co-signed with my step mom and father. The deal was that they would throw down a large lump sum of cash to meet 20% down so I didn't have to pay mortgage insurance. In return for their co-sign and cash they would get to claim the interest on the loan on their taxes to help with write-offs. The situation was working just fine until I got a job several hours away from the house and the market crashed.
I moved out of the house and got some renters in there at a minimal loss. But now that the rental market has reached a point where I can't justify charging the rent I was I have been forced to lower the rate and take a significant monthly loss.
With mortgage rates where they are now a refinance would be a perfect solution since it would drop my payment to a reasonable price where I could afford to rent the house without a loss, but of course I can't refinance because the LTV on the house is way over 105%. I've called and the bank refuses to work with me on the loan. As a matter of fact I've called several banks. Same answer from all of them.
Another option would be a short sale, but that's not possible because step mother and father (who are now divorced, btw) would take a hit on their credit, too. They're not willing to do that. Even if I forced the issue and made it happen it would split our family apart even more and probably permanently. That's just not somewhere I'm willing to go. Even though I would really like to get the giant monkey that is this house off my back. My family is important to me. Even if they're being stubborn as hell throughout this whole ordeal.
Writing off the rental loss at the end of the year seems like a good idea, but I don't know if I can do that or not because I think the standard deduction is worth more than me itemizing my deductions since I'm not able to claim the house on my taxes. Even if I did claim the house I don't think it would be worth itemizing the deductions because I only make 42k a year or so.
I'm really at a loss here for what to do and hence am requesting someone who is perhaps more knowledgeable to offer up some creative solutions. If there are any. The main things here are that I need to recover as much of that loss in income as possible and I want to do the honest thing in all facets here. I.E. keep the loan and keep current, keep the agreement and keep my family as together as I can. There have already been huge falling outs within the family that surround the situation and I'd like to stop the hemorrhaging as much as possible.
Full Story: Several years ago as a young 20 something I had a large sum of cash on hand. This was before the housing market took a crash. I decided to use the cash to purchase a home which is now worth 70k less than what it was purchased for. I entered into the deal basically because I was young and stupid, needed a safe investment for my money, and wanted to build a life and some credit for myself and in large part because I was talked into it to provide a tax break for my family (more on that later). At the time a house seemed like a perfect place to put it in. Especially since I bought with 30k instant equity. Similar story to a lot of folks, I know... but here comes where it differs from theirs-
At the time I didn't have enough credit or income to qualify by myself. So I co-signed with my step mom and father. The deal was that they would throw down a large lump sum of cash to meet 20% down so I didn't have to pay mortgage insurance. In return for their co-sign and cash they would get to claim the interest on the loan on their taxes to help with write-offs. The situation was working just fine until I got a job several hours away from the house and the market crashed.
I moved out of the house and got some renters in there at a minimal loss. But now that the rental market has reached a point where I can't justify charging the rent I was I have been forced to lower the rate and take a significant monthly loss.
With mortgage rates where they are now a refinance would be a perfect solution since it would drop my payment to a reasonable price where I could afford to rent the house without a loss, but of course I can't refinance because the LTV on the house is way over 105%. I've called and the bank refuses to work with me on the loan. As a matter of fact I've called several banks. Same answer from all of them.
Another option would be a short sale, but that's not possible because step mother and father (who are now divorced, btw) would take a hit on their credit, too. They're not willing to do that. Even if I forced the issue and made it happen it would split our family apart even more and probably permanently. That's just not somewhere I'm willing to go. Even though I would really like to get the giant monkey that is this house off my back. My family is important to me. Even if they're being stubborn as hell throughout this whole ordeal.
Writing off the rental loss at the end of the year seems like a good idea, but I don't know if I can do that or not because I think the standard deduction is worth more than me itemizing my deductions since I'm not able to claim the house on my taxes. Even if I did claim the house I don't think it would be worth itemizing the deductions because I only make 42k a year or so.
I'm really at a loss here for what to do and hence am requesting someone who is perhaps more knowledgeable to offer up some creative solutions. If there are any. The main things here are that I need to recover as much of that loss in income as possible and I want to do the honest thing in all facets here. I.E. keep the loan and keep current, keep the agreement and keep my family as together as I can. There have already been huge falling outs within the family that surround the situation and I'd like to stop the hemorrhaging as much as possible.
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