My girlfriend and I have been together for 6 years and about 4 years ago we purchased a house together in IL.......both of our names are on the mortgage. Well, long story short we are separating and I am moving back to Dallas. The house has been on the market for about 4 months now but we've only had 2 showings. We owe $230k, are asking $215k, but it is only worth about $190k. Neither of us can afford the house on are own so I was kind of curious about my options. If we let it go into foreclosure can I buy another house right away if I take out a loan from my 401k for the down payment (talking about putting half down). Or what if we let it go to foreclosure, take out $50k from my 401k, borrow another $50k from friend/relative and outright purchase another home.....can the old lender come at me for anything?
I know I will get a lot of feedback about how I signed a contract and was ok with everything at the time. Or how my girlfriend and I shouldn't have made such a committment. I understand all of that and am just trying to make the best decision I can with my life.