March 18th, 2009:

It looks like I’m getting stuck with the house (and the SUV and the credit card debt). So I’m trying to decide how best to work that out and I’m hoping that writing it out and your advice together will help me find the best solution.

(This is really not about why I’m stuck with these things or ways around that. If you’ve got something to say along those lines, let’s save that discussion for some other place. What I need here is advice assuming that I am stuck.)

THE PROBLEM

The problem is that we still owe $150k on the house. In this market, I’d be lucky if I could get $125k for it. Recent home sales in my area are going for $77/sqft (which would fetch me about $175k) but with 120 days on the market and very few actual sales despite the number of signs up in my neighborhood. As Jess and I learned a while back, they simply aren’t selling for a reasonable price due to the foreclosures. So, that leaves me $25k (or more) in the negative. That’s $25k I simply don’t have to throw at this problem. So selling the house is not an option.

I spoke to a mortgage guy. I simply don’t make enough money to qualify for TWO homes, so renting this one out at a loss and buying another, much cheaper house is not an option unless I start making more money. Recent changes in the mortgage industry keep me from using the rental income to qualify for the second home. So buying another house is out.

My “wife” is asking for child support as well. With a house 3 times bigger than little ole Celeste and I need, a car payment that’s about 50% higher than would be ideal, and credit card debt out the wazoo, I’m living on the edge of my means. Coming up with child support seems impossible. All of these things made sense when we were a team
working together to solve a problem. At two separate entities seemingly working against each other at times, it just doesn’t work.

An apartment
I could move into my mom and dad’s house temporarily and try to rent my house. Once it rented, I could try to find an apartment for Celeste and I.

I’d probably have to rent for less than I pay in mortgage. I pay $1400/mo in mortgage stuff, plus another $600 or so in utilities — $2000 total. If I could rent my house for $1000/mo and find a cheap — I hate using that work in relation to apartments — cheap apartment for us — say $800/mo or so. I might be okay. Utilities in an apartment shouldn’t run more than $200 which means, if I’m doing my math right, I’d have $600 more in my pocket each month than I would otherwise. That’s a start.

Of course, then I’d have to live in a “cheap” apartment which is not really what I want for my daughter.

Mom and Dad
My Mom and Dad are very generous. They’ve offered Celeste and I a place to stay that would include a room for each of us, food, utilities, and everything else you could imagine (including free day care) for free. We would basically have the entire upstairs of the house they have in Keller, a very nice house in a very nice neighborhood that’s just as close to where I work as where I live now.

This would allow me to seek a renter for my house (even at a rate lower than what I pay) and use the difference to pay for child support and start building up a bank of cash to use to help qualify for a new home in the future.

Of course the downsides are not having a place of our own, having limited ability to entertain guests (dates? hahaha), and having to live under their rules. However, we see eye-to-eye on most things so I don’t see this as too big of an issue.

Room Mate
I could find a room mate. I’ve even got enough space to take in a room mate with a child. The savings there could possibly offset some or all of the child support. But finding someone I trust to live with my daughter, that I get along with, and that is willing to live where I live may not be easy. Is this you? Do you know someone?

Abandonment
It’s really a bad idea, but I want to write it down so that I cover everything. I could just walk away from the house. Just let it rot. My credit will be ruined (and probably Jess’s too) and I’ll never again qualify for a house or a car or even a credit card. But, with the amount of money I’d save, within a few years time, I might be able to save up enough to pay enough cash to be considered for something. And, if I can sneak an apartment lease in there before my credit looks too nasty, I could afford a nicer place that might be more sustainable.

YOUR THOUGHTS

I’d love to hear your thoughts. Are there other options I haven’t considered? Which of these sounds the best to you?