sell current home and rent in order to get started?

[Tracy Montarti]

greetings all!

(edited to move to new member intro)

MY QUESTION is should we sell our current house, knowing that we may have to rent for a little while so we can act quickly when we find an opportunity? We may get lucky and not have to rent. We could rent probably for 6 months and keep our sanity.

We currently have a 15yr mortgage with 10 years left @ 5.5% as well as a small second HE loan (6 years left @ 5.5%) and HE loc... I think at 8%? All together adds up to $84K. We also have one consolidation loan (stupid) (about 22K) which is a higher rate... like 13% or something that we'd like to pay off with the equity from this house (worth $125-135K). After paying realtor fees, we'd only have about 7-17K to work with.

All together payments = $1592
We could rent a 2BR for a short time for $700-750/mo
Our goal would be to pay about $95-$110K for a house worth $140-160K. But it would have to be close enough to livable condition that we could move into it after minor repairs, painting etc. within a month or so.

We know we don't want to stay in this house forever, which is why we're considering a move now (otherwise we'd just pay off the stupid consolidation loan with a HE loan at a much lower interest rate).

Adding on to this house isn't really an option b/c then we'd be the most expensive home in our little area.

We may have to live through 1-2 moves so we can leap frog into our dream home. We'd love to be able to do this eventually without moving, but I don't think we can do that at the moment.

Unless we refinance the whole shebang for a longer term (i.e. much lower payments) and rent this one out? How does the bank see rentals? I'm not sure we'd have enough for 2 mortgages, even if they're lower b/c of longer terms.

We have 2 children (6 and 3) and a dog, so it isn't just us moving.

WOULD YOU DO IT?

Thank you for getting this far... Any ideas or advice you may have would be greatly appreciated.