My house: a cautious reason to hope
Many of you are well aware of my travails regarding the home that we own in another state. If you missed those posts, you can read them here and here. Many of GLBL readers have been very helpful with your suggestions and if you happen to be struggling with decisions regarding your house, I encourage you to read through the comment sections on the aforementioned posts. They are a great resource.
I have been working diligently in order to figure out the best plan for me and my family. Over the past fourteen months, we have spent close to $12,000 in order to stay even with our payments, insurance, taxes, utilities and repairs. Our savings is gone, our emergency fund is nil and I have cashed in about half of what little retirement we had put away. I am earning as much side income as I have time for and my wife babysits anywhere from one to five children (beside our own) everyday in order to make ends meet. At the moment, our credit is good and God has provided for our needs, but we are at the point where we are starting to incur major debt on behalf of this house.
Two weeks ago, I called the company who was holding our second mortgage to see if they would release the lien on our home and make the debt a personal loan. This would allow us to lower the price of the house to the amount of our first mortgage. I was surprised when they were unwilling to work with me – and the reason? Because they have insurance on the loan that does not payout unless I do a shortsale, default or foreclose! It is in the best interest of the company holding the note that a something bad happens to me and my family. Dead end.
So, three or four days later, I had made up my mind that there was nothing we could do other than just quit making payments on everything. We have no cash left. The only money in our savings account is from a 0% balance transfer that I did in March. Taking out balance transfer is not a strategy that I or glblguy recommend, but it was an emergency.
And then my realtor called.
Finally an offer
After fourteen months and fewer than six showings, a couple was about to make an offer on our home. As of today, we have an accepted offer on our house! The offer does not cover all that we owe, but the offer is greater than we ever thought possible even a month ago. Talk about the eleventh hour . . . The contract with my realtor was within a week of expiration, I had made the last payment that I intended to make, and there seemed to be no hope of avoiding a major financial calamity.
Now, there are still a lot of moving pieces that still have to fit together. The second mortgage company still has to approve the sale. If they do not accept our buyout offer, we are back to square one. The ironic thing is that if I was two or three months behind in our payments, it would be a cinch that the offer would be accepted. The fact that our loan is current means that the company believes there is more money to be squeezed out of us.
The buyer is not yet locked in, they are holding the earnest money until we find out what the second mortgage company will do. Furthermore, I am not sure of the state of their financing – it is possible that the bank can still refuse to fund their purchase. The buyer could still just cut and run at this point . . . stranger things have happened. This is not yet a sure bet.
Today, I am considering taking out a personal loan that will allow me to pay off the second mortgage on the date of the closing, this way the purchase will not be dependent on the accountants or actuaries employed by the lender. This strategy would also move up the closing date almost a month, which also reduces the risk that something might go wrong. We would be another $10,000 in debt, but at least we would no longer be home owners.
After the year that we have just finished, my faith in God is stronger than ever before and even without this offer to purchase, I do not think that I will ever doubt his hand of Providence.
Yet He keeps on giving.
Photo by goldberg