If a house has an established rental unit, then any appraisal must take into account the net (after operating expenses) discounted cash flow of the rental stream. I'm not sure what that might be in this case. Assuming some reliable real estate agent or appraiser has quoted you $146K, it's probably fairly accurate. That means, of course, after selling expenses and commissions, you have virtually no equity in the home. Not good from a lender's point of view.

As well, in a boom market, the property has only gone up marginally by $16K in 5 years. In Toronto, the same home would have gone up by 30 or 35% - assuming it was a single detached home since, generally, most of the value comes from the lot.

Coupled with the fact that you have $25K of unsecured debt at, I'm sure, a substantially higher interest rate, it means you have significantly less than zero financial net worth. Regrettably, the higher the risk, the higher the interest demanded as compensation. If any lender concludes that your net worth is around -$25K, I really don't know if anyone's going to bite unless you can increase your income somehow.

Sorry - Details are helpful. I realize I kind of rambled through my initial post. The value of the mortgage is $123K right now. The house is worth $146K and possibly a little more as it has a rental unit.

The equity I have in the house might not be real equity, however. You are correct in saying we're in a bit of a bubble. The only reason I have equity is because the value of the house has increased $16K in the last 5 years.

In my pipe dream world, I would love to re-mortgage with a smaller amortization. I realize that what I did when I bought the house was a little uneducated. I signed into a 35 year amortization where a lot of the first 5 years payments are actually interest. I have paid approximately $57K in mortgage payments in the last 5 years (yes, I did the math 3 times and that's unbelievable) but I've only gained $7K in equity so who's really gaining here. It's highway robbery.

I very much want to keep this house but I am going to work on alternate possibilities just to allow myself to be the devil's advocate. Having a home that's suitable for my family is of high high importance to me and I would do just about whatever I could to keep this house even if it costs a little more than I want it to.

Any other ideas given the additional information, particuarly on lenders I might be able to try with?

It's impossible to give an answer without knowing the numbers of your situation. especially the market value of your home, and the balance of your mortgage. Obviously, you have to find a way to generate more income. With 4 kids, renting out space is an unlikely option.

A fiend of mine shared the mortgage on his home with another guy and was able to pay off a pretty decent house that way. However, my buddy had only his girlfirend, the other guy was single at the time, and both had good credit scores.

http://www.cbc.ca/news/canada/british-columbia/story/2011/06/29/housing-bubble-capital-economics.html

Worse, the above widely circulated article about the housing bubble across Canada about to burst hardly surprised me, given the fact that most homes are asking for 50 to 80 percent more than their tax assessed value. The report says the average is only 25%; however, it's it's often way more.

I also noted Obama's remark last month regarding the likelihood of another world wide recession due to the out of control US Federal Government's debt. Interest rates will have to increase significantly, and you know what that means.

If you don't have much equity, maybe you would have been better off walking away from the house and moving into an apartment, like so many thousands of others have had to do. Even if you got a mortgage, by the time the next renewal comes up, your place may have fallen in price so much, that even if you kept up payments, the equity might end up being negative. Can't say though, given the lack of details provided.

I am running out of options. My 5-year term mortgage with Xceed Mortgage runs out in mid-September and they are not renewing. I am having a very hard time finding alternative financing due to my credit score and some past debts I have had trouble getting rid of due to cash flow. I have never declared bankruptcy (actually almost looks like it would have been better if I did) and have a credit score of 486 due to the bad debts.

As of yesterday, I have contacted just about every mortgage broker and mortgage expert I can find. I am hoping one of them can help me find an option as I'm really not sure what I would do if I don't find some kind of solution. I have 4 children which are also affected by this, and it is eating away at me slowly.

I actually have right-sided a lot of my cash-flow issues and am actually at a place where I feel "on my feet" with my cash flow issues. I was going to look into options to get rid of approximately $25K in past unsecured debts after I finished my mortgage renewal.

I am close, but not there yet, as long as I have this cloud hanging over my head.

Does anyone have any creative solutions or know of alternative financing options I could try to tackle this problem?

Look forward to hearing from you. By the way, I am in New Brunswick.