It's been a couple weeks with the mother in law staying with us (talk about no room in the house, lol) and I haven't replied to any of your responses. A few things to note:
The overall feeling of being stuck is probably the biggest issue at this point. We can afford the house on just my wife's income so that's really where we need to be anyways. My mother in law was staying with us for a couple weeks while she was house shopping (She's going to be a snowbird) so unfortunately we got to see just what is out there for the same money we're paying for our house. ::barf:: lol
I've talked with the wife and we've started a plan to really crank on that 20% of the 80/20 loan. I never really paid much attention to what I was paying on it until recently and I about puked when I saw the principal vs interest amount. I basically pay $15 a month towards principal. I'll be calling the bank next week to make sure if I pay more there are no penalties. We can't afford much but even another $20 a month would help tremendously until I get income again. We pay per month now, I might check out the twice a month option instead, a friend said that helps shorten the loan time.
I'm hoping we got good news about our immediate neighborhood. The house next door that's literally falling apart had someone changing the locks yesterday. I asked if it was recently sold and he said yes, that's why he was out changing locks. I'm super excited that maybe it will be fixed up soon and I won't have to look at it anymore :)
As far as the harp loans go, mine isn't owned by either FM so it appears there's no refinance option that route at least.
Lastly, our house is small and unfortunately laid out pretty horribly now that I've lived in it. I didn't notice it when I bought the place but, there are a few nooks throughout the house that just flat out waste space, lol. We've got a small dresser in one that's in the hallway but it blocks about 6" of the entrance to our room as a result. No big deal, we're not usually fat (my wife won't be in another 2 months). Opposite that area is another wasted space. There's not enough room to put much of anything there though. We are looking at ways to use the space better. The original reason I found this site was because I was searching for information related to mattresses. We still haven't purchased one yet but we have decided to change our frame. We found a storage bed @ IKEA that will really help store winter items / blankets / stuff under the bed (
http://www.ikea.com/us/en/catalog/products/00249883/ ) . Walking through IKEA, we also found some good ways to get more storage in the kids' room. I don't know how I feel about hanging storage on the walls, but the wife would like to put storage cabinets close to the ceiling in the living room, above your head when you sit on the couch for example. Our ceiling is only 8' though and I'm 6'1" so I don't know how that would work out, even over the couch. We'll see how it goes. As was mentioned a few times, we do need to de-clutter, for sure.