What is our best option for relocating when our house is worth less than the mortgage? Short sale is out-we are not behind. Want to buy but low dwnpmt

In addition to renting, which is a viable option if you can find a good tenant, there are potentially some other options to consider.  First, you may want to contact your mortgage company and ask about a modification which would potentially allow you to pay down the principal in a shorter period of time and thus, getting the balance closer to the market value, allowing a sale to be more realistic.  You may also want to speak to them about a short sale.  You do not have to be in default on your mortgage for the lender to consider a short sale and that may be a viable option as well.  If your lender is not willing to work with you, another option which is presently available (but which Congress is considering doing away with for lack of funding) is what is called a FHA Short Refinance.  This program is specifically aimed at assisting homeowners with negative equity to refinance.  It slashes principal from mortgage and again allows you to get the mortgage amount reduced closer to the market value.  Not every lender participates in this program but many do, so you should consult with some lenders and see if you might qualify for this program. I hope this provides some initial guidance.  As I am not privy to all of your circumstances, the identity of your current lender etc., this should not be considered a substitute for seeking further legal advice and assistance and I would recommend you do so if you wish to pursue any option, as a attorney who understands all of the facts and circumstances would be in a position to more specifically review your options and provide perhaps even additional recommendations. Thank you. Marla D. Sones    

Try to sell, get it listed while you do a short-term lease and try to get the lender to approve a deed in lieu of foreclosure waiving any deficiency judgment.