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Too Much House
By admin | September 23, 2008
I recently received a question regarding house payments and wanted to share some thoughts:
My husband and I are thinking about selling our house but we are unsure. Our mortgage payment is $2,000/month. This may not be pertinent but we LOVE our house. I recently received a large amount of money from an inheritance that we can use to pay down the mortgage. My husband and I have about $6,000 worth of debt plus I have a large amount of medical bills from an accident. We bring home about $3,200/month.
My thoughts:
The way I like to answer questions and share my thoughts is to answer it as if I were in your shoes. To give you my honest answer I would sell the house that I love. And I mean it would be on the market today.
Almost 2/3 of your income is wrapped up in a mortgage and this makes things very tight and stressful. I normally recommend that your house payment should be 1/4 of your monthly income and with what you bring in, your house payment should be around $800.
If I am in your shoes I am selling the house and finding a decent, inexpensive apartment to live in for a year or two while I am getting my finances back in order.
The action items that I would do:
#1) Sell the house
#2) Set aside $1,000 for an Emergency Fund.
#3) Pay off debt
#4) Get finances back in order (should have 3-6 months of personal expenses in your emergency fund) before becoming a homeowner again and finding a house with a mortgage of 1/4 of my income
Depending on how large your inheritance is you may be able to plow through those steps quicker than normal. After you do this I am confident you will be able to breathe easier and able to live life as though it were intended.
Topics: Debt |
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