So I have a situation here…my mortgage is out of control…we bought the house in hopes that we would gain equity within the first year, refinance, and get our high payment lower…this is why the slimy broker told us…well the Cali market is down and that plan didn’t work…we have this huge mortgage and already refinanced to roll in our taxes and insurance…ok I will just say it we pay 2,500 a month for a fixer upper 20 year old house!!!!! IF we could pay down the 2nd somehow this would help a lot...we have 100% financing and even with me working we are short 600 a month...and now the savings account is gone and i dont know how we are going to pay next month!
I am pretty sure I am going to get fired soon because I don’t live a breath my job anymore since my son was born….i have different priorities now…it was easier when I had one child who went to school all day….so anyway we want to make it work with one income but I do not know what to do about this mortgage…my husband just started his own plumbing company and we are going to rely on this as the only income…it could work or not…I don’t want to foreclose on the house because that will totally ruin our credit…I called the mortgage co. and they really didn’t have any suggestions…I am not sure there is anything we can do….i am just praying god will see us through….deep down inside I sometimes want to foreclose to get ride of the stress but I am not sure if this would make things more stressful in the long run…I don’t know what to do ladies…any tips?

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Mother to 2 great kids and a wonderful husband
ray:

Hi!

I am sorry you are dealing with this, it sounds very stressful. I know how the housing market is changing where we live. Houses are foreclosing all over already, but let's not plan for you to be one of those owners too! Got to think positive just like your name, right? Foreclosure is your last resort, remember that!

I realize some of the ideas below will not help you live on one income and be a SAHM, but if that is what you really want then my personally opinion is to either sell and downgrade or look into a longer loan that will lower your payments and make them affordable.

I am going to think of everything I can that may work, I don’t necessarily recommend all of these options, but I am laying it all out there for you to think over:

Sell your house and get out now before you are financially ruined

Get a roommate, if in dire straits this may work for you temporarily.

Move to a place with cheaper payments and rent out the house. Would it be cheaper for you to rent another place and rent out your home to pay the mortgage?

Look into refinancing your loan. Even though the rates may be a bit higher now, maybe you can refinance your loan from a 30 year loan to a 40 year loan. Are you allowed to refinance now? Some lenders won’t let you refinance until you have had the original loan for 5 years. You may have charges for this.

Get a new job/do side projects/cut back on what you can to help increase your income/savings for the $600/month you need.

Call the lender and see if there is anything they can do to help lower the payments.

Get an interest only loan. (I would stay away from this unless you have to.)

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Wife to Thomas and Mommy to Olivia Grace (8/25/2007)
Quit my finance career to be a SAHM and planning on starting my own business!

I'm sure many people can relate to your situation. I know of some other people who are upside down in their mortgage. Like you, they were counting on housing prices to rise and now have more mortgage than house.

My advice would be to buckle down and try to make enough money to cover it. Whether it's your husband investing more time in getting his business started, or you getting a different job that is more in line with where your interests/priorities are, or both of you finding additional work. Forclosure isn't the easy way out. There IS no easy way out at this point, which I'm sure you don't want to hear. My best advice would be to buckle down, find some sources of extra income, and keep trying to pay the mortgage down. Hopefully the market will turn soon and you'll find you have enough equity to sell the house and buy something you can comfortably afford.

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thanks gals, yes i already have a 30 year interest only loan now with 100% financing...horrible i know...i should have listen to my mother...we were totally naive ...i get good pay right now but will soon loose my job...i commute 2 hours a day as it is....if i look for another job the starting pay wont be what i make now and i dont think it will be worth the babysitting cost ect if i start at 30k a year...we need to buckle down for sure!!!!! i never have been very frugal and i totally want to learn and get in this habit. i dont want to kill our selves trying to stay in this house either because i don't want to work to live you know...i may get a roommate....i feel like we got our self in a major pickle.

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Mother to 2 great kids and a wonderful husband
ray:

You should put the house on the market now in hopes of selling it sometime. I know the market isn't that great right now, so it's gonna take some time. If you are already $600 short every month and you are about to lose you're income, it doesn't seem likely you'll be able to keep up with the payments. You do NOT want to go foreclosure because you'll still owe whatever the bank doesn't get by selling your house and you'll ruin your credit.

I hope things work out for you!

The problem with selling the house is, if it hasn't risen in value you're going to have to pay to get rid of it. You're going to have to pay off your mortgages, pay a realtor fee and closing costs. It doesn't sound like you have the money to do that.

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The CA market has softened quite a bit! I feel your pain in that department.

I agree with Kim that selling your house right now could really end up being an expensive option, especially if your house is now worth less than the amount of your loan.

Make an attempt to lower your expenses...there is so much good advice here. Also see if you can negotiate anything with your mortage company. I know you've already asked them, but ask again. With the number of homes going into foreclosure, the last thing your mortgage company wants you to do is to default on your loan...especially if your loan is for more than your house is worth.

I hope things work out for you!!!...soon.

Exactly, BUT it is better than foreclosure! The problem with renting is that people could probably buy a house in the horrible market and have lower payments than your rent would have to be to cover your mortgage. Maybe multiple roommates?

You definitely need to get frugal and this website is the best for that! SELL everything you don't need/use on your Craigslist and/or have a yard sale. That is good for this week/immediate cash. Stop eating out (assuming you do), stop buying "things," you know you don't need anymore "stuff!" The easiest $ maker is cutting your grocery budget! It is easy to half it being frugal, again this website is the best for that as well!

Your dh is going to have to work hard/long hours to see you through this. If/when you lose your job maybe you could be a childcare provider at your home.

Even though all this, I still recommend you try to sell your home.

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A woman is like a teabag. You never know how strong she is until she gets into hot water.-Eleanor Roosevelt

thanks for your response and encouragement.

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Mother to 2 great kids and a wonderful husband
ray:

I am just going to wish you the best of luck. You mentioned childcare and a comute being big expences. I would try to find a way to get the extra income. Can you provide child care for one other child. Here if I were to pay for child care it would cost like $800 a month, So that may be an option with another job after your dh is home. Live off what you have, sell stuff. Got college loans see if you can get them in deferment. Sell a vehical if you can. Talk to any of the places you have debt and see if you can get it defered, or at least lower payments.
The worse option and I hate to even mention it is getting money from family. I don't know if they would have any to loan you but if a $100-$200 a month can keep you on your feet until things pick up then try it.

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Kimberly Proud Mommy to Bethany Rose April 2006 &

Organizer of the Coupon Clippers of Tacoma