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Pam Grim
  • Real Estate Investor
  • Phoenix, AZ
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Messed Up...need some advice

Pam Grim
  • Real Estate Investor
  • Phoenix, AZ
Posted Feb 3 2009, 05:04

You guys gave me some excellent advice on a problem tenant that I acted on and am way better off for it. I wanted to get your advice on what my direction should be going now.

My situation is this.

My husband and I bought out first house. We used 30K from the credit line on our first house to put a down payment on and fix up a 2nd house. Both are 5 year arms. (We asked for 30 year fixed on both but the mortgage broker said it wasn’t a good investment choice, so we did what they said. It was a dumb thing to do; we should have stuck to our guns.)

We have since divorced and each took a house. I can’t afford my house by myself. So I have 2 roommates. In 2 years my interest rate will flex and my payment will increase. Even with 2 roommates I don’t anticipate being able to afford the payments once they increase. My house has 254K on it and is probably only valued at 160K right now (according to zillow).

The only other debt I have is my truck (about 10K) and a credit card ( about 8K) from when I was laid off that I can’t seem to pay down. (Had it down to 3K, but then my AC and pool broke, and I had some unexpected medical bills.)

My question is this.

My current plan is to pay off my credit card and my truck so that when 2 years rolls around and my mortgage flexes I will have no other debt beside my house. What else should I be doing? I only make 40K per year, so I know I can’t pay down the balance on my house in time to be able to refinance it or sell it in 2 years time. Otherwise my plan would be to hunker down and pay down my house balance as well.

Thanks, Pam

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