digging out - first steps and lots of advice needed please! (sorry for long post)

[Anonymous]

Wow! What state do you live in. I am in los angeles and we are paying $1600 per month for an 800 square foor apartment. The two bedrooms start at $2300 and to buy a condo in the $900,000 and lofts in the $650,000 - $900,000. I think the cost of living in LA is way too high.

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@Anonymous wrote:

Not necessarily. My apartment is $1500 a month, but it's probably on the high side. Condos start around $350K, townhomes are pushing $400K, and single family homes are over $400K.

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[Tuscani]

And I felt bad spending $190k on my NEW 1500sq 3BR townhome!

[Anonymous]

If you feel the house was a mistake, then I'd try to sell it. Have you ever tried to sell a house by owner? It's not as difficult as you might think. I would suggest finding a realtor that will provide a MLS listing for $300-$400 so all the realtors have access to the home. Also you can even add a lock box so realtors can enter if you aren't home. The advantages are this...if you luck out and find a complete for sale by owner w/o any agents, you save a 5-6% commission which is serious money on your home price. Even if an agent uses the MLS listing to bring you a buyer, you offer them 2-3% as a "finders fee" and save 1/2 what you would normally pay. It may or may not take longer, but at least it's a PROACTIVE decision instead of REACTIVE.

Another interesting spin is to perhaps lease/rent the entire home or maybe just extra rooms (if you are single) to interested parties while you wait for the market to improve. If you find someone to rent for the payment plus a little for the risk you are taking, then it's a worthwhile deal. They are paying your mortgage down and in the meantime you move into a rental unit and start paying off your debt until you are in a better place to sell the house or possible retake possession. You might even find a buyer if you do a lease w/ option to buy.

I'd try to avoid dipping into your 401k. Besides I believe there are special conditions and penalties for actually moving funds out. A 401k loan is easier to do and you are basically paying yourself back albeit at a low interest rate (4-6%).

In regards to your car...could you sell it and buy a less expensive car? Transportation is necessary, but driving a BMW/Porsche to work vs. a Chevy/Ford isn't necessary. Also perhaps something with better fuel economy would help?

Do you have cable TV? It's a DESIRE not NEED. Do you eat out alot? It too is a DESIRE, not a NEED! Business luncheons are especially costly! I guess it comes down to the whole what you NEED and not what you WANT rule. Usually they are easy to identify but hard to implement. A second part time job is a great idea as well. It doesn't mean you have to flip burgers on the side, but perhaps you can sell some things on eBay or perform side jobs (depending on your work trade).

[Anonymous]

cfstr1 wrote:
Wow! What state do you live in. I am in los angeles and we are paying $1600 per month for an 800 square foor apartment. The two bedrooms start at $2300 and to buy a condo in the $900,000 and lofts in the $650,000 - $900,000. I think the cost of living in LA is way too high.

Washington state. Puget Sound area. King County.

We're getting lots of California transplants coming here after selling their homes down there. They get here with a wheelbarrow full of cash, find the first thing a realtor shows 'em, and they say, "I'll take it."

Before long, this area is going to rival Southern California real estate prices. Already too expensive for most working people to live here, unless they commute in for an hour or two, take a ferry, or ride a train.

Also seeing lots of apartment complexes, many that were originally built as condos in the 1980s, being converted back into condos and sold.

Down the road maybe 1/2 a mile, there are apartments same size as mine (2 or 3 bdrm, 1100-1200 sf) that are $3K a month. Recently remodeled, like mine, not newly built.

Considering going job hunting around Spokane.

[Anonymous]

Hi -

Well, I have made a lot of decisions - I got a new job (not more money - but  a better opportunity - with the same company).  I had my tax escrow evaluated - and I got $5K back & lowered my monthly payment by about $200K.  Because my interest payments are so high I increased the number of allowances on my taxes & am getting a bit more back each month.  Right now I am putting $500 in the bank and paying the same each month. 

I'll admit I got a paid trip back to my old hometown to visit friends & spend around $250 for meals and smallish presents (like $30 here and there).  It was worth every penny.  Since I am traveling more for work - I have enough for two round-trip tickets to Hawaii - so that is my goal for this fall/winter.

There is still a chance that I will get a bonus this fall - my transfer into a new job was a bit contentious - but we'll see...  Part of the reason I moved was that I had made a sexual harrasement claim & the guy got fired.  I wanted to get away from the gossip.  I'm just not sure how that factors into everything....

Right now I am making it every month.  I have cut back & am not adding to my cc balances.  Keeping my fingers crossed!  My Fico is up from 701 to 735 - so things feel good to me right now.

Thank you for the positive words - and enjoy the less costly cost of housing out there!  The greater Seattle area is INSANE!

[Anonymous]

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janders9 wrote:

My Fico is up from 701 to 735 - so things feel good to me right now.

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With a 735, your sitting pretty right now from a FICO perspective. Whether 720 or 850, you still get the best possible deal on a mortgage rate.

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janders9 wrote:

Thank you for the positive words - and enjoy the less costly cost of housing out there!  The greater Seattle area is INSANE!

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Tell me about it. DW and I are looking around Puyallup/Sumner area for a house we can afford.