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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Our HHI is the same as OP, but I am in much better financial shape. This is what I would do.
1. Sell the house (unless you believe that it will appreciate greatly. And even if you felt this way, you could invest in a REIT to profit from rising prices)
2. Rent a home for 3-5K a month. You can definitely get a decent home in this price range. You will save 2-4K a month without giving up much house. 
3. With the savings, I would contribute more to my retirement account or to college savings.

I agree that private schools are completely unnecessary when you are in a good school district.
I am surprised by the number of conservative people here who are criticizing OP.
While OP is in bad shape, there are many many others that are in worse shape. Buying a home 4X HHI is not uncommon. I would even say that it was typical during that time period. Everyone believed home prices would go up, not down. In hindset, it was a huge mistake, but if things had worked out, the house could have doubled in value. Timing is everything![/quote]

Thanks for your thoughtful post. We will lose about $100,000 by selling our house. Do you think it's worth it? We may not be able to save up enough ever for a down payment for a house. We'll be saving about $4000. Per month by dropping private school, although we'll have college tuition soon.[/quote]

Thanks for the compliment. Who cares if you will lose about $100,000. Every investing expert will tell you that this is a common mistake. People are overly obsessed about not taking a loss. Get over it and focus on the present and the future. The loss was in the past and you can't change that. Saving $4K a month is a great start. In a couple years, you should be ready to buy another house. But for now, renting is a pretty good deal. In the past, it was a bad idea, but recently, it is not a bad idea. Many people also overestimate the value of home ownership. As you know from experience, home ownership can be a very bad thing too.[/quote]

$100,000 is a lot of money. I'd rather not lose all that money. We only lose that money (via realtor fees and closing costs) if we sell. So the lose is not in the past and we can prevent it by not selling, which we don't have to do. I doubt we can save $100,000 or two in a couple years. We have a bunch of college tuitions to pay. The consequences of not selling is we have a very tight budget and a large part of our income goes to housing. We also can't save as much as we should for retirement or college. However, we hate the idea of renting. Uprooting kids, not necessarily long term, many rentals are dumps or expensive, not building equity, can't change it or make improvements, feeling like you are regressing financially.[/quote]

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