creating a debt free life

Posts tagged ‘home ownership’

Too long without posting !!

I could not believe when I looked and January was my last post !! Wow. We have had a busy year or two.

In 2012 we made the choice to let our daughter and her husband and kids, who had been living with us for a few years after moving to Texas from Calif to restart thier lives, rent our current home. We had owned the house for ten years at that point, and had wanted to move up North an hour away to live closer to my husbands work and see how we liked it up there and figured it would put our house in safe hands, and give them a huge break on rent as our mortgage was well below current rents in the area and they got a much bigger house.

We signed a 14 month lease on a nice apt and settled in much closer to work so my husband could get up an hour later, leave much later , and get home much earlier, shaving about and hour and a half a day off his comute. We loved the pool, and the lovely views off our balcony, we had a creek bed between us the apartments on the other side of the complex

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It was a lovely apartment with a lot of room and other than some neighbor issues , normal in an apartment with others so close, it was relatively quiet, and very comfortable. We even got some snow to enjoy that winter !!

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We purchased new sofas which we did pay off during one year promotional so we paid no interest

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and found this lovely table and chair set, with two leaves , not shown, for a few hundred dollars at a thrift store, so we were living in a lovely place, with some beautiful new things and enjoying our life.

 

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Then the holidays came around and I realized how far away an hour is. I rarely saw everyone, and missed our small town Christmas events we loved so much, and the holidays were just not as fun as normal and we knew we would have to go back. We loved the apartment but we missed our house so much .

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It is old, needs SOOOO much work, but it was ours and we love it. But, the problem was, at that point in time, our kids could not leave it. Our son in laws family had joined them from Calif, to see if they would like to live in Texas. So, no one would have rented to that many people and pets. So, we had a few options.

 

Stay put, not an option, as much as we loved it up there, ( and miss it now ) we  missed our kids, grandkids, house and our cute little town more .

rent a house in town, but with rents so high we really did not want to do that.

Buy a second house to live in while the kids rented ours

BINGO.

So, we thought, it will never happen. We had just purchased a brand new Passet and had a five hundred dollar payment. Not to mention we already owned a house.

But somehow, some way , we bought a house. Cute three bed, one bath house, We figured we would be in it  until the kids could buy a house with his parents,  a couple of years, which was the plan. Then we would rent it out.  We moved in the start of Aug 2013

 

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Well, by November it was clear his folks were not staying and thier plan was to move back to Calif in Jan. So, over Thanksgiving weekend we had the kids over without his parents and jokingly, sort  of, asked if after his parents left they wanted to trade houses. They were so excited and we made the plan to switch houses in the spring after we got a fence up around the property for security and safety for thier kids and pets.

So, middle March 2014 We took one day to switch houses. It took 12 hours almost to the minute and we were back in our beloved house.

So, we have been back in our cute 90  year old cottage for six months now and we plan to get back to our debt repayment again. We spent way too mcuh money on these moves and when we moved into the new house, we bought all new appliances as we had left the washer dryer here for the kids, rented a set at the apartment and then also needed a fridge and bought an amazing one for the new house . The kids have been paying us for the appliances a couple of hundred a month, so that helps at least. They have them almost paid for, at the price we gave them.

So, six months later, we have a ton more debt,  and a house we have to do a lot of fixing up to, which we would have anyway, but  now we see it every day !! No regrets, we are so happy to be home. It feels wonderful. But we are not happy about the debt we see ourselves in .

So, that is our last two  years, and now here we are plannit to restart  our debt snowball again.

We did pay off a lot of stuff before we moved out of the apartment, several credit cards that we have never used again, but we borrowed heavily to get into the house, and now we are starting over with a huge car debt and credit cards we ran up for the move and the appliances and all the little stuff we had to do when we moved ino a house that was very outdated.

The kids are still renting the house, but are in the process of figuring out how to buy it from us. We thought it was an assumable loan, but it is not. According to zillow in one year it is worth a ton less than when we bought it, which does not add up as they said the same price as the appraisal at the time, but now it says it was worth a lot  less when we bought it, so I am confused by that.

The problem we are encountering is, we cannot sell it to them via a home mortgage, as we will lose money. We will have closing costs that we just cannot justify as we will be losing a lot to sell them this house, , some of which we just did not realize but we cannot lose more. So, I am not sure what they will want to do, rent for a while and see if things go up, do a owner finanicing plan, we are just not sure . They want to talk to some banks, but we told them, we cannot sell it to you if it costs us more money. They love the house, they want to buy it really bad. So, we will have to see how we get this situation fixed, but they agree it has to be fair to both sides. When we thought it was assumable it would have been, no cost to us, low cost to them, so we will see. They do not plan on doing anything for a while, they have to figure out what they want and it will be at least the start of the year before we discuss it more. If they were to finance it, thier costs will be much higher as well , closing, down and all that. We cannot help them, both because, we cannot help them and the bank said, we cannot help them, and they have to pay us back at least our down payment as that was the agreement. So, not really sure how it will all go, but I know we will find a way to work it out for all involved.

So, for now, our priority is to get back to our debt snowball in the next  few months, after bringing our savings back up to where we need it  to be. We have about 1500 but we need a lot as emergency because  if my husbands mother , who still lives in Calif ever needs him to go out there for her if she has an emergency or sadly one day when  she passes and he has to spend weeks out there taking care of things with his sister, we have to have a months worth of money in the bank to give him time to do so and it not affect us at all. Work will give him the unpaid time off, but we need the money to cover our expenses . So, I think we are going to do a full months expensies, plus travel expenses, which might be as much as five grand, which would make us feel so much better.We do not plan on needing it for years, she is not 80 yet, and in good health , but we have to be sure we are covered just in case.  Another thing we plan to do is just add a bit to the mortgage each month to get the principal down a bit each month. We have owned it 12 years but refinanced a couple of times to get better terms, not to take out money, you cannot do that in Texas without a ton of equity which we have never had,  adding to the  mortgage, so we still owe a lot and still owe on our PMI for another 14,500 to get to that 22 percent to drop it. So, we have a lot of work to do. 40 bucks a month brings it to 200 a month toward the priciple . That is our goal, to get us 2400 minimum paid off per year.

It is becoming increasingly clear , with retirement just 17 years away if he works until 70, that will have to really work hard to get out of debt, pay off the mortgage and save for retirement. That is for another post, but these concerns have gotten us back on path to saving and paying down debt.

So, life kind of took us on a loop, or we took ourselves on a loop I suppose, they were decsions we made. For now, we own the two houses and look forward to finding a way to sell the one to our kids. If they chose to not buy it, we will rent it to them until they move and buy else where and then rent it out for income as the rent would be more than the mortgage by quite a bit.

We plan to stuff away as much money as we can to get that five grand and then start paying off one debt at a time, as fast as we can per the debt snowball. We do have some promotional   balances to watch so we have some things that may have to be paid out of order  or maybe even before savings are exactly where we want them to be, to keep from getting hit with interest, but only one is due by the end of the year for a few hundred and the rest do not start to  hit until march next  year so we are keeping our eyes on these things and plan to knock each one out before they cost us money.

So, that is where we are at, and I hope to be posting some real debt repayment as well as savings each month. We are very determined and I plan to start reading all the wonderful personal finance blogs I follow and just work hard !!

Thanks for stopping by !!

Stephie

 

 

 

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