Financial question. What would you do in this situation?

Discussion in 'Community Discussion' started by glocke12, May 4, 2008.

  1. glocke12 macrumors 6502a

    glocke12

    Joined:
    Jan 7, 2008
    #1
    Just wondering what others would do if they were in my situation.

    Im 40, and in october of 2006 my father died. At the time I had a primary mortgage on a townhouse, a home equity loan of 40k, had 35k in student loans, and another 26k in credit card debt, and 14k on an auto loan (please dont lecture me on money, I was bad at saving and good at spending, and I know this).

    I knew that it was really only a matter of time before all that debt caused me to lose my house. My parents house, which sits on 5 acres of land had a reverse mortgage on it of 160k, and was valued at 350k. At the time it seemed like the thing to do would be to sell my house, use whatever I made on the sale to pay off my credit cards, than purchase my parents house and stay and help with my moms care. This is what I did in June of 2007.

    One year later, while I still have the student loan, and auto loan, and a new mortgage for about 180k, I have paid off the 26k in credit debt and have closed those accounts. However, I am really pretty miserable. My girlfriend left me due to my fiinancial situation and my move, and many of my "friends" have bailed on me. To top it all off, my mother has some mental illness issues that make it hard to deal with her.

    If I stay here another year, my mother goes to assisted living, and the house is basically mine (though if I sell it while she is still alive the remaining equity, minus would I put into the mortgage goes to her), and with the mortgage payments as low as they are, I am able to make double payments on my student loan which means I can have that thing paid off in about 4 years instead of the 20 it would take otherwise.

    If I leave here, while I will have peace of mind and be happier, I will have no choice but to live in small condo (housing prices in my area are ridiculous), and will no longer be able to afford to make double payments on my student loan.

    Wouldnt mind hearing others input.
     
  2. beatsme macrumors 65816

    beatsme

    Joined:
    Oct 6, 2005
    #2
    if it were me, I'd opt for getting out of debt ASAP. You've got retirement on the horizon, and you want to start putting money away for that as soon as you can. My advice is to stick it out and try to make the best of it.
     
  3. glocke12 thread starter macrumors 6502a

    glocke12

    Joined:
    Jan 7, 2008
    #3
    yeah, ive been thinking about that also. I do have about 55k in a retirement fund, and am currently putting an average of 10-15% of my income away annually.
     
  4. Queso macrumors G4

    Joined:
    Mar 4, 2006
    #4
    Stick with it. Remember that the real cost of debt lowers over the term of a loan or mortgage due to inflation, meaning whilst everything is miserable now you'll start to see the benefits in a year or so, then more benefits a year after that etc.. You should see a debt counsellor if you haven't already. They may be able to advise you on restructuring everything to lower your interest rates, meaning you'll pay everything off even quicker.

    I really feel for you, but keep your chin up. Things will get better if you stick with it.
     
  5. tersono macrumors 68000

    tersono

    Joined:
    Jan 18, 2005
    Location:
    UK
    #5
    It's a tough one, and I sympathise having gone through something similar. However, my advice would be the same as the previous posters - stick with it, given another year or two, I'm sure you'll be glad you did.
     
  6. Koodauw macrumors 68040

    Koodauw

    Joined:
    Nov 17, 2003
    Location:
    Madison
    #6
    Here is my opinion, take it for what it is worth. I think in your case you should try to pay down as much of your debt as possible. That will mean making some sacrifices in your life. You may not be very happy right now but doing this will make life that much better once you get things settled. You have to think long term. Don't get caught up with what you "want" right now. Focus on getting out of debt, and staying out of debt. It seems that some bad decisions were made earlier on and now you need to pay the piper. Many people seem to have a 'I work hard, its ok to splurge' mentality, and live only for today. Don't get caught up thinking that way.

    Just my .02
     
  7. GoCubsGo macrumors Nehalem

    GoCubsGo

    Joined:
    Feb 19, 2005
    #7
    Clearly you don't need to be lectured on how to handle your finances at this point in your life. Interestingly enough I don't agree with people who frown upon student debt but that's just me. The key is to try and pay them off asap but before that begins attempt to consolidate. If you haven't, do try that.

    Onto the real issue. If being at the house with your mom is truly killing you then getting out seems like the best idea but the stress of getting back into what you were previously into seems like equal stress, albeit a different kind. Since you see the light at the end of the tunnel coming perhaps staying put is best. Otherwise you may find yourself back in financial distress again.

    As for the girl, if she left you simply because of finances it seems a bit superficial to me. If you were a general prick to her because you were stressed about your situation then I would venture to guess you should get your act together and stick it out one more year at the house you're in.

    I probably don't need to tell you this but $55k in a retirement isn't going to get you all that far. But then again that's about where I'm at, though you have 9 years on me. ;)

    If I wasn't clear, sticking out seems best. When in doubt just drink.

    I'm kidding...sorta.
     
  8. glocke12 thread starter macrumors 6502a

    glocke12

    Joined:
    Jan 7, 2008
    #8

    Yes, she left because of my financial situation, and my move. I was always very kind to her.

    Cant consolodate, I did that years ago and got locked into an 8.0% interst rate. There isnt anything I can do about that.

    Thanks for the replies, I was thinking sticking it out is best also, but was just curious what others views are....

    As for drinking, that actually does help tremendously....
     

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