- quote -

more importantly, I saw no "guarantee" income would increase. OP
"thought it would" based on circumstance, that is far from a
guarantee.

squeezing the budget is a mid to long lasting cure to a number of
issues. If income increases as well, then squeezing the budget might
yield even MORE income to pay off the debt and save.

jIM wrote:

- quote -

I agree, jIM, having the wife work full time is an option.
The first mortgage is pretty low, refinancing it wouldn't make much
sense. Income may not be enough for a bank to refinance the second, but
worth asking.
I got the no point/no closing from 'Regular Banks' within my state
(Massachusetts) not through a broker or finance company. The rates were
always about 1/4% higher than the full cost mortgages, which would have
been more than $10K, and my logic was that by not paying the fees, I
guaranteed myself I'd end the cycle at 1/4% above the bottom. No other
magic there.

OP doesn't state income or expenses. As you suggest, now is the time to
review the budget. Cut the cable. No meals out. Get movies from the
library. Wear a sweater. No Starbucks. It's amazing what one will find
if they spend three months and write down every cent they spend. For
many, that's enough to make a difference.

JOE

- quote -

My understanding with "interest only" loans is they are interest only
for ~10 years, then final 20 are ammortized. The interest rates are
also much higher than 5.75%.

You have 100k equity in current house/ 25%. While a risk, an option
to consider is tapping into this.
Changing budget is something to consider
Downsizing house is something to consider
refinancing second might be something to consider

Can you wife work full time?
0 closings costs is an answer I want to see from joetaxpayer (or
another poster).

best of luck to you

In article <1172880912.382326.161310[at]s48g2000cws.googlegroups.com> ,
jourdand[at]comcast.net wrote:

- quote -

As I see it, you are on the path to bankruptcy. The only
question is how long you hold on before it happens, and how
much do you loose in the process. Or, do you take proactive
action?

If you house really was worth $400K, you have $13,000 in
home equity credit available. You might be able to get a 3rd
on it. It will be in the 10% range, however.

In guessing at your payments, taking 1/2% on the mortgage and
2% on the consumer stuff, you must have $3500 a month in payments
here, and that is to just wake up in the morning. There is no
utilities, taxes, food, etc factored in. That is over $40K a
year after taxes, over $70K a year pre-tax. Unless you job is
paying better than $100K a year (assuming you have no kids),
then you are on the path to disaster. The interest on the debt
will grow faster than you can pay it off, and it will end up
where your minimum payments exceed your income.

If you add more debt, then you have to add more income. Unless
you are looking at a $150K a year job, then you have way too
much debt going on. The house you love will soon be the house
that sinks you to the bottom of the river of debt. And that
isn't even taking into account the housing bust. A house that
was worth $400K last year could easily be worth only $370K
this year, and $355K next year, assuming that you can sell it
at all. Houses here in that range are sitting on the market
for nearly a year.

My advice is to put the house up for sale, rent for a while
(rent is very cheap these days), get yourself back on your
financial footing, and when you have a 20% down payment saved
up, look for a $250K house.

If you want to try to keep what you have, and you don't mind
the high risk of going through bankruptcy, then I would try
selling the cars and picking up a $2000 beater. Use the cash
to pay off credit cards and home equity loans to try to reduce
the monthly drain. If you still need more, try to get that $13K
in home equity. Then rededicate yourself to working 24x7 to try
to fix the job problem. If you have time, deliver pizzas at
night and newspapers in the morning. And get your spouse back
up to full time. You married a house, so now you have to live
to work to make the payments. Everything else is out of the
question until that house is taken care of. That is what you
get when you love a wooden box.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

On Mar 2, 5:04 am, jourd...[at]comcast.net wrote:
- quote -

I have a secured line of credit (LOC) with my home as the
"collateral". The interest rate is lower than other say bank loans,
it's life insured. And it's just like any other account ... take money
out, put money in. Not so useful to me anymore but I keep it
anyway ... just in case. As in maybe in a week or three, I'll use it
to pick up a few equities.

"joetaxpayer" <joetaxpayer[at]nospam.com> wrote in message > BeachBum wrote:
- quote -

spreadsheet format which I use for budgeting. If you would like to try it,
just email me and I can send it to you as an attachment in Excel or
Microsoft Works format.

BeachBum

On Mar 2, 2:04 am, jourd...[at]comcast.net wrote:
- quote -

okay, not enough info. the reason for the drop in income is because of
a job change.
job now relies on seniority and i am only 2 years in. last year my
spouse went part
time as i am now on the road with the new job.(crazy unpredicable
schedule/2nd job not an option)
we have been told a large amount of people will be retiring within the
next year which will definately help the seniority situation. first
year at new job everything was fine - a couple of slow months but
nothing compared
to the last 6 months. Income practically nil in December and January
and we had to rely
on credit cards to make it. credit card debt has doubled in last 6
months.
house - owe 265k - current int. rate 5.75
2nd - owe 42k - int rate 6.75
approx value - 400k
credit cards and vehicle - 35k - 0 int until Nov 2008
great credit but probably going down due to income vs debt situation
question: should we sell the house we love? should we do some crazy
int. only loan? are there any "safe" interest only
loans and where would i go to get a loan with zero closing costs??
any advice greatly appreciated!!!!!!

BeachBum wrote:
- quote -

You all may be correct, but we know nothing about the OP. Just that he's
in a crunch that he suggests will go away in about a year.

Why jIM feels that a refi is a $2k-?? expense, I'm not sure. My last 4
refis were no point, no closing. So, the 'rules of thumb' regarding
mortgage rates needing to drop x% to be worth it went out the window.
I'd like to see OP's replies before we speculate further. His situation
may be anything, we're just guessing here.
JOE

"jIM" <noreplysoccer[at]hotmail.com> wrote in message
news:1172843377.588494.138270[at]31g2000cwt.googlegroups.com...
- quote -

be the last thing you need at this time. What caused you to be "financially
strapped"? For example, was your situation created by credit card debt,
medical, or just poor financial management.

You need to lay out your "budget" (projected income and expenses) by
month for the next year. Then scrub the expenses particularly those like
gifts, dining out, etc. If this does not bring your budget into balance,
then look for ways to increase your income. For example, get a second
job, etc.

Good luck,
BeachBum

we currently have
- quote -

If you are certain that you'll have more income in a year, then maybe
find a way to "budget" out the crisis. Closing a home loan could cost
between 2k-16k (or even more). If you were to do this "twice" in the
next 2 years, that could be 32k of expenses you could avoid with
creative budgeting.

As other replies indicated, I suggest commenting on the specifics of
your situation.

General problems get general solutions.
Specific problems MIGHT get specific solutions.

John A. Weeks III wrote:


- quote -

John, I mostly agree with you, in general, and here. But here, I focused
on the OP stating "our financial situation shouldn't last much longer
(maybe another year or so)".

This can be anything. A spouse who took time off to have a baby, no
income for now, but good income in a year. Taking on debt to avoid a
sale of a home might be ok in such a case.
There are many circumstances where step functions in income occur (in
either direction). I watched savings dwindle as I used much of my net
income to pay a nanny. Had it not been so well planned, I might have
taken on debt for those years, just as an example.

You are right, "There isn't much to go on here." A follow up may make
your point an understatement, or confirm my optimism. Let's see.
JOE

In article <1172806910.144255.153820[at]z35g2000cwz.googlegroups.com> ,
jourdand[at]comcast.net wrote:

- quote -

There isn't much to go on here. This is like going to the doctor
and saying that you don't feel well. The doctor has no clue if
you have a headache or you broke your leg unless you tell him or
her where it hurts.

In my opinion, if you are financially strapped, the last thing you
need is more loans. Perhaps you bought too much house, and should
consider putting it on the market, and buying something that you
can afford. Or maybe you have enough money, but you are spending
it foolishly. You would be amazed at how many people have $40,000
pickup trucks and SUV's who don't even earn $40K a year. Just
because they will let you have a loan doesn't mean that it is a
good idea to take that loan.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

jourdand[at]comcast.net wrote:

- quote -

Too many questions unanswered;
How much do you owe on the house?
How much is is really worth (i.e. how much would it appraise for?)
What's the status of your credit? (credit score, late payments, etc.)
Other outstanding debt? How Much?
Available sources of money?
What credit lines do you have available?
Credit cards?
401(k) loans?
Equity line?
Friends/Family?

Why do you think things will change in a year? And by how much?

I'm sure I/others here can come up with more questions after you reply,
but at this point you've given too little information for a response
that's anything but more questions.
(I hope you read this as a desire to help, just can't without more details)

JOE

i would love some advise regarding home loans. we currently have
found ourselves financially strapped and are looking to do a creative
home loan. our financial situation shouldnt last much longer (maybe
another year or so) but we don't want to sell our home. any advice
out there?