Of course you can. But with which money do you buy the house? You still have the mortgage to pay and not much income.
And paying the mortgage for a house you do not live in anymore and a rent? I would avoid doing that, if I can.
I already explained it 5 times, but lets go again
You pay the mortgage with the money from the sell of the house.
Normally, the mortgage is less than the sell value. Because you have been paying it for years and thus the debt went down. while house values usually go up.
This will leave you with extra funds which you put as a down payment for a new mortgage for a much cheaper home.
For example, if you bought a house for 400k. after 10 years of making payments, you now owe 300k.
there are now 3 scenarios:
scenario A:
You can sell it for 450k. you now have 150k in hand. which you can then use to outright buy a 150k house without mortgage. or you can buy a 200k house where you put a 75% down payment. which gives you a very good deal. or you can move to a trailer park for like 5k and have 145k in the bank.
Scenario B:
if the house value dropped massively for some reason. then the mortgage might be more than its sell value.
something happened to kill house values in that area. you can only sell it for 100k.
your house is underwater. you owe 300k on a 100k asset.
in this case, you should declare bankruptcy.
the bank takes the house. and you owe nothing.
this means you instantly "earned" 200k by just declaring bankruptcy. as you used a 100k asset to pay for a 300k debt.
Both scenarios A and B are a big win for you.
Scenario C:
the worst case scenario is if the house dropped massively, but coincidentally to just the same amount you owe.
The house will sell for 300k. the mortgage is fully paid off, but you have nothing left.
HOWEVER, even in that scenario it will benefit you to downsize.
if your monthly mortgage payment is (hypothetically) 2k. and after downsizing it is 1k. then you just got an extra 1k per month, every month.
This improves your situation a lot.
The way to make a realistic debtor scenario is not with a fucking house payment to the bank.
let me give you some examples of actual realistic scenarios:
1. ongoing medical bills.
Have one of the family members suffer from a disease that requires large ongoing payments. the ongoing part is important. if it was a one and done thing you can just declare bankruptcy. but here even if you clear it once, you need money to pay for the ongoing treatments.
2. loan sharks. a family member did something stupid and now owes the mafia money. you can't declare bankruptcy here, they will kill your entire family. you NEED to pay them off.
there you go, here are examples of realistic debtor scenarios.
