Advice/Ideas needed

**bjl584** · 07-12-2011, 08:24 AM

Originally posted by dammitjim30 View Post

Hi! My family of 3 (soon to be 4) wants to really get out of our town home into a more spacious single family home, but in today's market, the odds are not with us. Town homes are dirt cheap these days and the value of our town home has severely declined due to market and foreclosures in our association. We owe roughly $30,000 more than its worth. Is there anyway of being able to get out of this mortgage and into a new home, without renting it out? We don't have trouble making payments as my wife and I have steady jobs, fortunately. Just looking for a way to be able to move.

Also, while this is on our minds, we will need a new vehicle to replace mine (paid off) due to my car with about 170,000 (end of its life) and bigger for the family. I know it's not wise to pick up a new loan if you were going to go into a new mortgage, but the new home part seems far aways. Will I be okay to get a new vehicle?

Any advice or suggestions would be helpful. Thanks!

I would think that a new(er) car is more of an immediate concern to you and your family. So, how much do you have saved toward a car? Preferably you should pay cash, but if you have to finance then make sure that your payment is not more than 10% of your monthly takehome and make sure that you don't finance more then 36 months. That's a general rule of thumb, but I wouldn't stray too far from those guidelines. If you list your income and debts and expenses it will be easier to give you a price range to work with for a vehicle.

As far as a new house, I would hold off for now. That sounds more like a want than a need, and it sounds like you aren't financially ready to buy anything right now.

**Hector** · 07-12-2011, 11:52 AM

Originally posted by dammitjim30 View Post

Hi! My family of 3 (soon to be 4) wants to really get out of our town home into a more spacious single family home, but in today's market, the odds are not with us. Town homes are dirt cheap these days and the value of our town home has severely declined due to market and foreclosures in our association. We owe roughly $30,000 more than its worth. Is there anyway of being able to get out of this mortgage and into a new home, without renting it out? We don't have trouble making payments as my wife and I have steady jobs, fortunately. Just looking for a way to be able to move.

Also, while this is on our minds, we will need a new vehicle to replace mine (paid off) due to my car with about 170,000 (end of its life) and bigger for the family. I know it's not wise to pick up a new loan if you were going to go into a new mortgage, but the new home part seems far aways. Will I be okay to get a new vehicle?

Any advice or suggestions would be helpful. Thanks!

It is likely that you will have to come up with that 30k to sell your current house. Have you saved enough for down payment for new house that you are talking about?

Have you saved for car? If not, buying a used cheap car should be a practical thing to do.

P.S. my car has 190k+ on it and I am planning to drive it till it last without significant issues. My mechanic says it should last for 300k without many issues.

**disneysteve** · 07-12-2011, 12:45 PM

I agree that getting a nice used car should be the first priority. The house is a want, not a need, and doesn't sound like it is financially feasible right now unless you are sitting on a huge stash of cash, enough to cover the 30K you are upside down and pay 20% down on the next place. Even if you do have that money, it might not be a smart idea to use it that way. And don't forget you need to maintain a 6-month emergency fund as well.

**Frugal** · 07-12-2011, 01:22 PM

I would talk to a financial professional first, but I would think instinctively that it sometimes is better to stay where you are at to ride out a difficult real estate situation. THat's just my opinion, though. I would like to have moved on from a starter home sooner, but it looks like we will have to stay because of the real estate market and other factors, as well.

**dammitjim30** · 07-17-2011, 04:30 PM

I really wish I could keep my 2005 Nissan Altima until 300,000 miles but it doesn't seem the most practical. There's barely enough room for the 1 kid when traveling, let alone for 2; and we do that a fair amount. My car goes through the grind every week with city traffic driving 30 miles each way to work. It's holding up well now, so still am trying to save more money for a car.
I wish I wouldn't have to finance a newer car either but think will have to at least some. I have about $1500 saved thus far for a new car plus will probably use my car for trade-in (~$2500-$3000). I will save more still though.
Let's see together my wife and I gross ~$95,000.00. We have 1 credit card w/ $3500 balance (We started the year @ $6000 balance so we've done well to pay the 3 cards down). The thing that really is a downer is my student loan with a $24,000 balance on it still w/ a $229 mo. pmt on that. If I didn't have that, I would be much happier. Other expenses are $1100 mortgage pmt, day care for about $700/mo. Association dues for $197/mo. What do you think I can muster for a bigger car/SUV-type?
Thanks all for your advice!

**disneysteve** · 07-17-2011, 05:37 PM

Originally posted by dammitjim30 View Post

my wife and I gross ~$95,000.00. We have 1 credit card w/ $3500 balance (We started the year @ $6000 balance

I think it would be very helpful if you posted your budget. Do you have any savings or emergency fund? How much are you currently contributing to retirement? What is your wife driving? Does it make sense for your "new" car to be the family vehicle rather than hers?

**dammitjim30** · 07-19-2011, 07:49 PM

Both my wife & I contribute 6.0% pretax to our 401k's with company matches. My wife drives a Pontiac Vibe, a small SUV, a little smaller thAn my Altima. It's not going to cut it for the family vehicle. No, we don't really have an emergency fund. I don't think it was smart to do when we were paying down other debts. I just want to make it work somehow for newer vehicle

**MonkeyMama** · 07-20-2011, 07:53 AM

Though I agree with the others that the car is a more pressing concern, I would go with something fairly used (low cost) in the short run, so that you can save up the money to eventually get out from under your townhouse. Just remember, the more you spend on a vehicle, the longer it will take to save up the cash to sell the townhouse. Just try to keep some balance in your decisions.

**TheMom** · 07-20-2011, 08:06 AM

If you can fit into the Altima or Vibe, I'd do that for a while and save more. We have a family of 5 and for a couple years, our biggest car was a Malibu. For trips, we bought a roof top carrier and that did us just fine. We have since upgraded to a minivan, bought with cash.

**juniehyatt** · 07-20-2011, 08:07 AM

Oh, I was going to suggest a Vibe! I thought it would be perfect for my family of four! I also like the Chevy Traverse, it's super roomy and a friend just got the Ford Edge, it's pretty cool too! I agree and think the better ride is top priority. I work for an apartment locator/realtor, and right now, it's super hard to sell, and renting it out is an idea, but it's tough to be a landlord, especially here in Texas where tenants have alot of rights, not that that's a bad thing, but if you had to evict here in Texas, it can take 2-3 months before the resident has to vacate. I don't know where you are at, but here in San Antonio, it's a renter's market right now. Much cheaper to rent a home, I'm renting to own myself...the apartments have gone up considerably. There is alot of military moving here so requirements have gone up as well..it's like they're saving those for the people with good everything. Good luck to you!

**papa_squat** · 07-20-2011, 11:44 AM

I can't honestly understand why the Pontiac Vibe is too small for a family of three or four, especially if you have another family car. Even the Nissan Altima is large enough, though you're be pressed for space on car trips. You be better off keeping both vehilcles until the wheels fall off, but if you are ready to replace the Altima, keep in mind that a sedan economy car will be far more affordable than a large SUV and that the more you spend on a car, the less you have to spend on the house.

**Eric80** · 07-21-2011, 08:48 AM

Congratulations on the new addition!
I think that you need to assess the whole situation. I agree that the purchase of a new car maybe necessary but with taking put a mortgage it may cause a strain on your finances. I would personally speak to someone who can advise you with what you should do and maybe draw up a plan as to how you would manage all the money.
I hope this helps.

**feh** · 07-21-2011, 09:02 AM

I agree with others - I don't see how an Altima/Vibe is too small for a family of 4. I can see how more room would be nice, but I wouldn't call it a need...

**dammitjim30** · 07-22-2011, 06:32 PM

I just don't see the housing market turning anytime soon, with all the bad news I've read about it. Nothing is looking up about it. Especially for the values for townhouses around my area which is in a suburb of Minneapolis/St. Paul. The values have diminished immensely. It's very depressing for me.
Thanks for all your advice. I just hope the market turns soon. I'll have to think about this some more. I don't even know where to start or who to talk to about financial decisions like this. I know there's financial planners but how does that work? Good day all

Advice/Ideas needed