Author Topic: Any Help for This Situation??  (Read 3143 times)

free2bme

  • 5 O'Clock Shadow
  • *
  • Posts: 2
Any Help for This Situation??
« on: July 14, 2014, 01:14:56 PM »
Hello all.  I've been reading here for a few weeks, but this is my first post.  At the ages of 58 and 54, its too late for us to think of FIRE.  However, I'd like to stick around to learn as much as I can so I can help teach our children a better way. 

Also we have a problem I hope you can share some advice on.  We have 22 years left on a mortgage at 10.5% interest rate.  (we've done plenty of self-face punches)  When we refinanced, we were told we weren't eligible for a government backed loan, but that if we  paid our notes on time for one year, we could refinance at a lower rate.  When we tried to refinance, we were told that the company no longer issues new loans.  We have tried to refinance through other companies but were denied because the house if underwater and not government backed loan.  We are not eligible for any of the government programs for homeowners either.  We owe around $44K and the estimated value is somewhere between $33K and $37K.  Someone today told me the only way out is to try to get the principal down to around $36K and then refinance.  However . . .

Last year my DH was laid off from his job of 28 years.  He is now working two PT jobs at less pay, so things are really tight right now.  He has around $60K in a 403b account from his former job and we wondered about using that to pay off the house.  That is, IF we are even able to take an early withdrawal.  He would love to be able to leave the job that's so far away (40 minute drive at $9.50/hr for 25-30 hrs/week) and work the one that closer to home, having time freed up to do other things.  The mortgage is the only bill we still owe. 

I am so overwhelmed and stress regarding our finances, so I hope this makes sense.  If you need any other info, let me know.  Thanks.

Cheddar Stacker

  • Magnum Stache
  • ******
  • Posts: 3719
  • Age: 42
  • Location: USA
Re: Any Help for This Situation??
« Reply #1 on: July 14, 2014, 01:38:37 PM »
Welcome to the forum.

It sounds like you have a lot of work to do. I would have your husband find a job closer to home if he can't find full time employment in the field he was in previously. I would also strongly encourage you to find whatever work you can right away ( I saw no mention of you working, or any reason why you can't work in your explanation). Work two part time jobs if that's what it takes to get the principal down to where you need it. Once it's in line with the value of the house, refinance to a more reasonable rate.

If there are any low cost improvements you can make to the house they should be considered as well. DIY sweat equity type stuff like painting, curb appeal on the cheap, finding things on craiglist or even cheaper if possible, etc.

Definitely encourage your kids to read this stuff as well. Consider having one move in with you to save both of you money. They can pay a small amount for rent/utilities and save a lot vs. living on their own. Any additional funds from that should help you pay off your mortgage.

The last thing I would do is cash out retirement savings to pay off your house. Consider everything else first and only do that as a last resort.

Good luck!

Catbert

  • Handlebar Stache
  • *****
  • Posts: 1817
  • Location: Southern California
Re: Any Help for This Situation??
« Reply #2 on: July 14, 2014, 02:22:35 PM »
What would it cost to rent and similar place?  If you'd save money on renting I'd think about walking away whether through short sale or straight foreclosure.   Your 403b balance is likely untouchable in a foreclosure. (401ks are exempt from creditors and IRAs in many states are also.  Think OJ Simpson and how he managed to avoid paying off the civil judgments against him.) 




free2bme

  • 5 O'Clock Shadow
  • *
  • Posts: 2
Re: Any Help for This Situation??
« Reply #3 on: July 14, 2014, 02:38:49 PM »
Thanks for such a speedy response.  Here's a little more info.  Our house okay is since DH is pretty handy, but the location is not-so-good.  One of our neighbors walked away from his house and did some type of sale at $9k just to be rid of it.  I'm told that these types of things affect the value of our house.  Where I am there are lots of people buying property for rentals.  So I guess the short answer is:  house - okay, location - not okay.

As for me, we're 3 years from finishing homeschooling the last 2 children.  One of them is special needs and would not make it in a traditional school :(  I've managed to homeschool pretty cheaply by selling used books and crochet/knitting projects online.  My health also is not what it used to be (frustrating) so that is a hindrance.   We only have one car which DH uses to get back and forth to work, so I've applied to places within walking distance, but no luck so far.  One of us has to be home with the special DC, so I'm looking for something I can do from home or at night when DH is home.  But no luck so far.

In my former life (before children), I did word processing for scientific researchers at the university.  However this skill doesn't seem to be in demand.  I'm hoping to learn something/anything  that I can do from home or at night (if away). 

Our oldest son is still at home and that is a blessing for us and for him (mostly :)  I agree about not touching the retirement savings.  We are able to maintain, but DH hates the commute, salary and the job.  We are both still looking though and won't give up.  If you think of anything else we're missing, please let me know.

Oh, I checked on rentals and sadly renting would be about the same amount as we're paying for the mortgage.  One bank told me if we were not underwater, we could actually save around $200 each month by refinancing.

Cpa Cat

  • Handlebar Stache
  • *****
  • Posts: 1687
Re: Any Help for This Situation??
« Reply #4 on: July 14, 2014, 02:41:42 PM »
You're looking at coming up with maybe $10,000 in order to refinance. That's not a massive amount of money.

Over the next year, your husband needs to keep shopping for a better-paying job (or better-paying part-time jobs) and you also need to be bringing in whatever income you can. Mow lawns, walk dogs, babysit a kid, rent out a room, whatever.

Also, look around the house and see if you have anything to sell. Do you have anything non-essential that you can cut? Cable, cell phones, food? With your hurdle being as low as $10,000, every bit will help.

If you guys can find a way to bring in $200 per week extra (or cut expenses), you could have this house refinanced to something reasonable within 12 months. Maybe that's not possible, but $100 a week makes it under two years to refinance - and that's not a horrifying timeline either.

Rika Non

  • Stubble
  • **
  • Posts: 144
Re: Any Help for This Situation??
« Reply #5 on: July 14, 2014, 03:01:01 PM »
If you are in a populated enough area, I know I have paid quite dearly to pet sitters through the years for help with my house / pets when I was away on business.  This type of home business will take a little while to grow but should be flexible enough to manage with home-schooling.  Depending on your house / yard some people perfer to pay for thier pets to be home-boarded with a caretaker.

Here and my last state the going rate is $25 per visit.

geekette

  • Handlebar Stache
  • *****
  • Posts: 1991
Re: Any Help for This Situation??
« Reply #6 on: July 14, 2014, 03:07:25 PM »
Here and my last state the going rate is $25 per visit.

Wow.  Here it's more like $10/visit.  I can't even...