I live in a California suburb. Three years ago my husband and I divorced, and I bought him out of his share of our home (I did a cash out refi and unfortunately the interest rate was 6.625 at the time). My mortgage is now $3500 a month. My takehome pay each month is roughly $7800, but it does increase each year by a couple hundred, and I am also taking classes online to increase my pay (I'm a teacher). So in the next hear it should hopefully increase by $500 or even more.
I have considered so many times moving, but every home around me now is priced out for me, including condos really, due to the high HOA fees.
I finally reached out to a lender to find out about refinancing, and am waiting until Monday to get on a call with them. I'm assuming right now is a horrible time to refi, but hoping they can give me some guidance.
I can make my payments but obviously it is very tight, so I don't have a savings. I have one child who I have an investment account with Schwab for, but other than that, nothing. I have about $7k credit card debt. I also have a car payment and school loans.
I'm looking for any advice. I love my home, but wish I could move, but even a move to a smaller home would not reduce my payment, if that makes sense. I'm priced out.
Advice wanted, my mortgage is insanely high
byu/ProfessorPizza inpersonalfinance
Posted by ProfessorPizza
4 Comments
Summer job?
Sell car for something cheaper or use public transit?
Keep doing exactly what you’re doing?
Not a ton of options tbh but you are making quite a bit of money. Depending on child’s age, if older, look into gig work or something on the weekends. I know it can be tough with take home work load.
But a summer job to help bring in an extra 8-10k would really help out here.
A large percentage of your income is going towards your house, but at the same time, you should have $51,600/year available to you for spending on top of your mortgage.
The credit card debt is a huge red flag, you’re probably paying a huge amount of interest on that and should pay that off ASAP. If you don’t have a monthly budget, you need to create that now in a way that will allow you to pay off the credit card debt quickly.
Rates have probably dropped a bit but not a ton, it may be worth the refinance, or maybe not. If you’re going to stay in the house I think you need to put quite a bit (eg, $1,300/month) towards debt, and once the debt is paid off savings, otherwise it’s not a tenable long-term solution.
If the price of other (smaller) houses has gone up, yours probably has as well, and you can afford a smaller house. Depending how many years are left on the mortgage I think you could make it work, but you’re absolutely going to need to cut your spending or increase your income.
I dont know what district you are with, or what you teach, but sometimes there are state funded stipends available for doing different things outside your regular classes. Might be something to look into.
Sounds tough, but doable. If it’s any consolation, there are people in your town living their entire lives including housing on what you have left over after your mortgage.
I would advise getting a housemate, TBH. It would be annoying but even say $1000/month would give you a lot of breathing room. And CA law is actually pretty generous to people renting out one room in their house (as opposed to normal tenant law). You can kick them out for any reason with a reasonable notice period.