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Old 06-09-2018, 10:58 AM
 
Location: Dallas TX
14,297 posts, read 20,544,645 times
Reputation: 20159

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My husband was unemployed all last year and we racked up a lot of credit card debt. The good news, he finally has a great paying job.

Now however, crawling out of this hole seems impossible. We own a house in a strong market. The house is way too big for us, and the mortgage payment is high. We could sell, pay off all of our debts, move to a smaller rental house.

The answer seems obvious, but I am waffling back and forth. I love the house, but have so much pressure not having any savings.
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Old 06-09-2018, 11:18 AM
 
Location: The Triad (NC)
26,847 posts, read 57,851,863 times
Reputation: 29256
Quote:
Originally Posted by veuvegirl View Post
My husband was unemployed all last year ...


We own a house in a strong market.
The house is way too big for us, and the mortgage payment is high.
We could sell, pay off all of our debts, move to a smaller rental house.
Sounds like a plan.

As to the future...
1) start saving. Save a LOT. More than you think you can afford to.
2) if ever faced with unemployment again... accept lesser work rather than digging a hole.
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Old 06-09-2018, 11:21 AM
 
12,404 posts, read 9,199,643 times
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Quote:
Originally Posted by veuvegirl View Post
My husband was unemployed all last year and we racked up a lot of credit card debt. The good news, he finally has a great paying job.

Now however, crawling out of this hole seems impossible. We own a house in a strong market. The house is way too big for us, and the mortgage payment is high. We could sell, pay off all of our debts, move to a smaller rental house.

The answer seems obvious, but I am waffling back and forth. I love the house, but have so much pressure not having any savings.
You want us to tell you what you already know? Sell the house, it's too big for you.
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Old 06-09-2018, 11:27 AM
 
Location: NC
6,081 posts, read 7,027,359 times
Reputation: 12054
How long have you owned the house? If you are over half way through your mortgage it might actually be cheaper to stay put. You will still need to pull that mortgage payment from your paycheck, but a good chunk will be going toward the principal rather than interest, which means you are saving for the future. A rental is like paying all interest--once it is paid you never see it again. The interest part of the house payment, which gets smaller with time, plus the insurance/taxes/upkeep, can sometimes total less than a rental payment. That's a big picture approach.
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Old 06-09-2018, 11:37 AM
 
Location: Dallas TX
14,297 posts, read 20,544,645 times
Reputation: 20159
Quote:
Originally Posted by luv4horses View Post
How long have you owned the house? If you are over half way through your mortgage it might actually be cheaper to stay put. You will still need to pull that mortgage payment from your paycheck, but a good chunk will be going toward the principal rather than interest, which means you are saving for the future. A rental is like paying all interest--once it is paid you never see it again. The interest part of the house payment, which gets smaller with time, plus the insurance/taxes/upkeep, can sometimes total less than a rental payment. That's a big picture approach.
Itís only been five years. We donít plan on staying here for longer than two more years, thatís another reason I am holding back. However I think itís time to bite the bullet. I hate selling, the stress and everything that comes with it.
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Old 06-09-2018, 11:38 AM
 
Location: Dallas TX
14,297 posts, read 20,544,645 times
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Quote:
Originally Posted by MrRational View Post
Sounds like a plan.

As to the future...
1) start saving. Save a LOT. More than you think you can afford to.
2) if ever faced with unemployment again... accept lesser work rather than digging a hole.
That’s the position we were headed to. One year was a hell of a lot harder than I ever thought. We had no debt and six months of savings.

Hubby was a bit blind the first six months and didn’t think he should settle. Sadly hard lesson learned.

Last edited by veuvegirl; 06-09-2018 at 11:51 AM..
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Old 06-09-2018, 12:00 PM
 
Location: NC
6,081 posts, read 7,027,359 times
Reputation: 12054
Quote:
Originally Posted by veuvegirl View Post
Itís only been five years. We donít plan on staying here for longer than two more years, thatís another reason I am holding back. However I think itís time to bite the bullet. I hate selling, the stress and everything that comes with it.
Got it. So now, you need to evaluate how fast prices are going up where you live. If it is 4% for example, that is a bunch of equity you can build before you move. But if it is only 1% it may not be worth it. Now if you do make some money when you sell, put it into short term CDs so it can make you a little money in the next two years. Of course you still need to figure in the cost and disruption of moving.
Good luck!
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Old 06-09-2018, 12:43 PM
 
Location: Silicon Valley
2,751 posts, read 1,209,866 times
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The fastest way to wealth is not necessarily a straight line. There's lots of ups and downs.

Take the tactical retreat here. Preserve your credit so you can save an buy in again later. Besides, real estate has gone up substantially as this business cycle gets long in the tooth. Better to have some savings to act in the next recession than to be just holding on in good times and have no backup plan during bad ones.
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Old 06-09-2018, 01:11 PM
 
2,084 posts, read 793,432 times
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Consider which would give you the most peace of mind.
Like many people you might not be confident enough to make significant changes for fear you will regret your decision later on. Remorse, I guess. In that case, consult a life coach or therapist to help guide your path. Consultation with an objective source who is without prejudice.
You want my opinion, sell and rent something that you will not have to maintain.
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Old 06-09-2018, 03:04 PM
 
10,265 posts, read 6,495,798 times
Reputation: 10842
Quote:
Originally Posted by veuvegirl View Post
My husband was unemployed all last year and we racked up a lot of credit card debt. The good news, he finally has a great paying job.

Now however, crawling out of this hole seems impossible. We own a house in a strong market. The house is way too big for us, and the mortgage payment is high. We could sell, pay off all of our debts, move to a smaller rental house.

The answer seems obvious, but I am waffling back and forth. I love the house, but have so much pressure not having any savings.
Why not buy a smaller house? Renting is throwing money away.
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