For the uninitiated, underwater is the lovely situation when you owe more to the bank on your house than it is worth. Basically, if we sold it and paid off the bank, we'd lose money on the transaction. We are about US$140,000 under water right now.
A well thought out plan might include some thinking like this:
"Hey, dear, let's sell the house and use the baskets of money we'll make in the transaction to move to Australia."We're not in that boat, obviously.
Our plan here it to simply surrender the house. We're going to walk away from it. This is a harsh decision for us. It smells like failure. We are walking away from over US$250,000 in payments made. If we can live in the house for five months or so after we tell the bank that they can have their house back, we can pocket some US$15,000 in mortgage payments. We're not PLANNING on this, but it might be an option.
We do not know if your credit rating follows you over the Pacific Ocean. If it does, we will be renting property for our first years in our new home. While this situation is not ideal, it is no worse than the situation we're in now.
Looking at housing costs in Australia, the cost of renting a 3-4 bedroom house is about 2/3 to 1/2 the cost of housing we're paying now (AU$1,400-AU$1,900 per month approximately) in most cities except Sydney. Sydney is significantly more expensive for any house that is not an hour outside of the Central Business District (CBD).
In Perth, for example, I found this house for AU$450/week. It is on a cul de sac, has four bedrooms and a fenced in back yard. It is, however, right near a major thoroughfare. But at AU$2,070 (average) per month it is 2/3 of what we are paying for housing now.
One thing I've noticed is that the rental prices are all in $/Week. NOT $/Month. I don't know if you pay weekly or monthly. I suspect that this is a marketing ploy to make the properties look cheaper. Much like a retailer might charge $2.99 to make the price look much better than $3.00. A lazy person might say $400 x 4 weeks per month = $1,600. But there are, on average, 4.6 weeks per month. And we don't add that 0.6 weeks in our head. I don't know. But I'll find out!
Do you have any insights on credit scores transferring to Australia or know about renting houses? If so, let us know!