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Budget smudget........

January 13th, 2011 at 12:00 am

Technically I'm overbudget in cash by $20. I need to use the money I earned babysitting to get by this month. I really wanted to use it towards my OH NO fund. Frown
CVS Bonus bucks: $2
TJ's gift card: $20

I'm feeling a little overwhelmed. I've come to the realization, my income does not support home ownership (at least not the home I currently occupy). I've been a homeowner for 12 years. I've lived in my current home 8 years. There are so many things that need attention. I don't have the funds to handle.
Windows - original wood from 1930's. They are badly damaged and need replacing.
Paint - The exterior of my home has peeling paint, rotting wood, and windowsills. It needs repair and paint.
Sprinklers - Need to be repaired, reworked. They are a mess.
Garage - floods during heavy downpours. Needs drywall and who knows what else to stop the flooding.

I refinanced the first year of ownership to a 15 year loan. I only have 8 more years before it's paid off.
Do I hang on or bail before the ship sinks? I'm meeting with my accountant in March and will speak with a Realtor regarding pricing. I know it's a bad market for selling but if I can get a reasonable price, I'll accept. If not, I'll stay put until it recovers in a few years?

10 Responses to “Budget smudget........”

  1. ThriftoRama Says:
    1294881968

    You're halfway to paying it off. It'd be hard to leave it. I hate to sound cliche, but you have to pay to live somewhere. At least you know there is a day when you will be rent free in this house-- certainly not maintenance free.

    As for repairs, prioritize based on what will cost you more later if it isn't done now.

  2. Petunia 100 Says:
    1294890504

    Do you want to stay in your home? How do you feel about sellig?

    Have you considered doing a refi to a 30 in order to lower your payments? That would give you more cash flow to take care of the needed repairs. Once that was done, you could go back to making higher payments for early payoff.

  3. snafu Says:
    1294895210

    All the repairs you list are those that develop over a great many years. You must have had very specific reasons for buying a 70 + y/o house. Roofs, plumbing, water systems, electrical, heating etc. all have limited life spans.

    Unless you have considerable DIY skills, replacing windows and rotted wood requires specific skill sets and a lot of money. I suggest you use this time - March to explore how much it costs material & tradesmen to replace X windows. Painting is not as difficult as it seems when you rent scaffolding and a sprayer. [yes, we actually did it]

    Is there anything you can do to increase income? A weekend job or renting a room, offering room and board with sums targeted to your house fund.

    I fear a home in poor condition wll be difficult to sell for the sums you've already invested unless the property has significant value. It is prudent to develop a back-up plan.

  4. WISEWOMAN Says:
    1294932249

    I don't think I would want a 30yr refi. Maybe a 15 yr with cash out to make some repairs. I will consider it. I love my home but it's not my FOREVER home. I don't know if I'll ever have one.

    The homes in my area are old. My other house was over 100 years old. New construction does not exist for someone like me in my price range and area. If I wanted to move an hour or so from work, yes it could be done. No thank you. I live in a busy city and do not want the commute or traffic hassle.

    My home was in great shape which was why I purchased it. Some unforseen issues (garage leaking) was not discovered until the first heavy rain. It was not disclosed by the seller, nor could it be found during inspection since the garage was filled to the rim.

    I believe the deterioration is due partly from the aiport nearby. The flight pattern was changed. Planes fly directly over my home. Believe me, when the jumbo jets fly low they are LOUD. My entire home rattles which I believe contributed to the cracks in the walls and window frames. Add drastic changes in weather and there you have it! I've tried contacting the airport authority regarding the issues but it's like fighting city hall. I also know with an older home maintenance is required.

    Ordinarily, I could have dealt with these issue but for three years I supported several family members in the same household that were out of work. The money I would have put away for these repairs went to feed, clothe and support my family. I'd do it again in a heartbeat. Thank goodness, they finally found jobs and are working their way back.

    Thank you all for your input.

  5. Petunia 100 Says:
    1294937466

    Oh, I understand about supporting the family members. Smile
    Have you had estimates so that you have a ballpark figure of what the repairs will cost? Do you know what your home is worth now vs. what it would be worth if all the repairs were done? Snafu makes a good point, a home which needs repairs typically only sells at bargain prices.

    Do you have a low interest rate on your mortgage now? If so, you might also look into a home equity loan to fund the repairs rather than a cash out refi. Some of the needed repairs sound urgent. It may cost less to borrow the money to do them now rather than waiting, as further deterioration may occur.

  6. WISEWOMAN Says:
    1294968573

    The interest rate on my loan is very low (4.5%).

    I'm doing some of the smaller repairs that only require a handyman now. Windows are a huge expense. I'm kicking myself for not looking into them before the government rebates expired. I'm hoping for another stimulus plan with better deductions (yes, I can dream).

    I definitely need estimates. But before I do, I need to educate myself on some of the work. It's been my experience businesses have tried to take advantage of me being a single female homeowner.

  7. Jerry Says:
    1295024871

    It's hard when there are that many things to work on, I know. When we lived in Boston we had air traffic issues and it's true, it can be deafening! I hope that you are able to get the most pressing things taken care of, and some insurance that your property value will increase with time. Hang in there, and the work that you do will lead to something positive, I'm sure.
    Jerry

  8. snafu Says:
    1295039592

    Sadly, I was unaware of background info; it's wonderful that you gave assistance to family during an extremely difficult period. Perhaps family could now help you with some of the work. If others in your community are having similar house damage issues, you might be successful being heard by your congressman. They have staff whose responsibility is to resolve problems for constituents. They will certainly know if there are any current refit/repair programs you may qualify or any in the line-up.

    I hope you will soon have the time to check the type of windows that best suit your refit needs. Knowledge is indeed your most powerful ally. I suggest checking with Habitat for Humanity or similar retro-fit outlets who may be able to significantly reduce your costs.

    Again, I suggest examining ways to bring in more income. Coincidently, I was talking to a senior earlier today who explained she has been fostering troubled teens for several years. She found it a positive experience, had only one child that was too difficult for her skill set. The help her teens gave permitted her to stay in her home. The money was incidental for her...at least for present.

  9. WISEWOMAN Says:
    1295132657

    Snafu..
    Thanks for the Congressman and Habitat for Humanity tips. Definitely worth checking into.

    My once unemployed family members have moved out of state for work and are unable to help with the physical labor. I'll figure something out. I'm pretty handy and have accomplished many projects already in this home.

    I need to get my friends with children out more. They pay me well to watch their children even though I would do it for free. Smile

  10. patientsaver Says:
    1295273878

    You have my sympathy about those airplanes. I have a problem like that with low-flying helicopters, as I live about 40 minutes from Sikorsky Aircraft, a helicopter manufacturer, and apparently my town is on their flight path when they test fly these things.

    My house is old, too....81 years old this year. There always seems to be something that needs doing with an old house. Yes, mine has charm and character, but i'd love to buy a newer home that didn't have so many issues.

    I keep going back and forth in my mind about whether I'll sell this place when the market recovers, or not. I'd love an upscale new condo with no outside maintenance to deal with, but i'm not sure i'd be happy where i couldn't really garden or wander my property, or feed the birds, or.....

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