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Posted by John A. Weeks III on September 26, 2006, 10:15 pm
> Sgt.Sausage wrote:
>
> >>Combined monthly income: 7300
> >>Combined Mortgage (1st and Heloc): 3000
>
> >>... I have been making Interest only payments on this load since its
> >>inception in June 04 ...
>
> In fact, with a traditional 30-year fixed rate mortgage, most of the
> payment for quite a few years is essentially "interest-only", so don't
> sweat this particular item.
A house is often the largest financial transaction that one makes
during a lifetime. Don't sweat it is the financial equivalent of
the ostrich burying his head in the sand. On the contrary, this
is the one deal that simply has to be right or you can mess up a
lifetime of finances.
> > You asked for help ... here's my advise: Sell the house
> > and get into something you can actually afford. The
> > rest will be gravy once you've done that.
>
> Others also have suggested selling the house -- I disagree. Paying a
> 5-6% real estate sales commission plus other closing and moving costs is
> probably the worst thing the OP could do at this point (talk about an
> unnecessary expense!). What's done is done
And in a few years when it gets repo's, we can again say that
what is done is done.
> -- it can be well within
> the OP's means to keep the house, establish an emergency reserve (via
> paid-down HELOC), and still afford to have kids, if not in two years
> then maybe 3 or 4.
And what are they going to do for retirement? Fight the neighborhood
dogs and cats to get the scraps out the dumpsters? There are a lot
of variables here, and having one so far out of whack can and does
have a lifetime of consequences.
> If they are truly in an "oversized house"
It isn't the oversized house, it is the oversized price. They
bought twice too much house, and now they are drowning in it.
> (something we do not know,
> since we do not know their location nor the employment outlook for
> same), then why not rent out a room?
So, what as that girl's name from Utah...Elizabeth Smart? In
this day and age, you cannot let someone else live in your house,
especially if you have small kids. You never know when someone
is going to go tapioca anymore.
> If nothing else, maybe potential grandparents will kick in if they think
> the pitter-patter of little feet is imminent... ;-)
That is great advice...let the parents, people who were responsible
and skimped and saved their entire life so they could afford to retire,
and have them raid their only money to pay for the irresponsibility
of the children. That must be the new Amerikan Way. I'd rather see
live kick them in the assets a bit, and hope that they learn the
lesson well the first time.
-john-
--
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John A. Weeks III 952-432-2708 john@johnweeks.com
Newave Communications http://www.johnweeks.com
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