Creative ideas for my underwater home

[Larry Littrell]

First off I don't live in a submarine my home is financially underwater :)
Our story: My wife and I did the "charge up the cards then use your house as a cash machine" thing for 15 years and it worked great ....until it didn't.
We learned our lesson hard and we have stopped using cards and have been paying them off steadily.

Our Home:
Feb 2008 appraisal: $407,000
March 2010 appraisal: $248,000

Todays value: $305-310,000

Our Loans:
Primary Mtg $270k Under %3 interest Payments = 1700 (inc Tax and Insurance)

As you can see I could easily satisfy that with proceeds from a sale but....

HELOC 78k Interest only at %4.5 ADJUSTABLE Payment= $300

(Note:Option to go to fixed rate payment would go up to $725 month)

So I'm in it $2000 a month just for mtg payments.

Rental possibility= $1800-1900 month

We are now empty nesters in a 4 bedroom 2500sf house.

Eventually I want completely out. This house is not good for a rental. I would like to owner occupy a 3-4 plex.

Just wonder if the BP nation has any creative ideas. Right now I am working a second job to pay off our debt then I will focus on our HELOC and just pray rates don't go up.