Hoping to get some advice. 2 years ago I was making 200-300k a year and bought a 500k home. That all came to a halt this April when I was laid off.
I have been budgeting as tight as possible and have applied to thousands of jobs. Market was rough this summer and I was able to get a position that only paid 65k plus commission. I could be back up to 100k+ in a year but for now I am broke.
My mortgage is 3400 and my roommate pays 1600. April-Sept I supplemented my savings each month to make ends meet but the savings is now dry and I am looking at a loan modification to keep the house.
My take home is currently 4k a month and after paying all bills related to the house, children, food ect, I do not have enough for the 3400 mortgage as of Oct. I am now 2 months behind in my payments and am waiting for the loan modification review to tell me what my options are.
We have no family or friends where we live that we can live with. The home is now worth 550,000 and we still owe 460,000 on it so we wouldn’t be making much of anything if we sold it after fees. My daughter loves having a house and I want so badly to keep it for her.
Does anyone have any advise on what else I could be doing, should be doing and what to watch out for in the loan modification process?
Fox said:
Go to a food bank. Stop eating out. Cancel all monthly subscriptions.
I agree. $2000/m for food is a lot. OP should definitely cut down to at least $1000/m. Alternatively, go find a second job if you can’t cut down on the expense.
Your mortgage is 3400 before or after the 1600 from the roommate? Would you be able to rent for less than 1800? Is there a car payment? A spouse? Child support? Can you get a second job?
Call 211 and see about food and or mortgage payment support, go to food banks to supplement. It seems like there are some things that could be cut though from your monthly spending to make the payment work on 4K.
@Hartley
Mortgage is 3400 before the 1600. Meaning I need to come up with an additional 1800 for mortgage. Making 4000 a month leaves me with 2200 to live off of and my bills and food alone are 2000 a month. That leaves me with 200$ left to pay towards my mortgage.
No child support or spouse and I am a working mom with no family or friends to watch my daughter to be able to work another job. My only option is to try and modify the loan to a payable amount until I can make more which is why I was asking for advice on modifications
@Del
There’s something not adding up. You owe 1800 of the 3400. Your take home is 4K. So you have 2200 left for other bills and food. Where is the $200 coming from?
I don’t have advice on modifications, but you did say- what else I could be doing- which is where reducing spending or finding income support comes in, in my eyes anyways.
Frost said:
Have you called the lender to ask for a forbearance? That should be your first step. Talk to the lender, they will work with you.
Forbearance is better than being late on the payments.
I talked to them and the forbearance for them meant I would have to pay a lump sum in 6 months of all that is due. They wouldn’t put it on the back of the loan. I don’t think I will have the funds to pay all 6 months in 6 months which is why I decided to go the modification route instead.
@Sai
WTG… I can only speculate OP put the minimum down payment on the home possible… Because.
Back then they were making pretty good money and didn’t think about the worst case scenario.
Peyton said: @Sai
WTG… I can only speculate OP put the minimum down payment on the home possible… Because.
Back then they were making pretty good money and didn’t think about the worst case scenario.
Yes I only had 20k to put down. I was a single mom and had saved that money within 1 year of working in the high power sales role. While I was making good money I was putting it all to fixing the home as it was in need of a lot of work. I did not foresee making 200k less income per year within 2 years of owning the home.
@Del
I personally don’t think a loan modification is going to be a saving grace, just a temporary solution.
Interest rates are still high, and you do not appear to have equity in your home. Taxes and Insurance drive a big chunk of those mortgage payments as well.
I think you should reflect on the other poster’s advice and look at your budget. I’m not going to lecture you on buying junk food, but sometimes the luxuries have to be put back on the shelf until a better day.
If your renter moves out, what is your contingency plan? What is plan C, D, or E?
I don’t know where you live but it seems like you’re around a city… option1: Add another roommate yesterday… Option2: put home on the market move to the country and downsize into a smaller home… Depending on where you live, you’re living on borrowed time right now… Sorry I couldn’t be of more help… But I would at least look into adding another roommate.
@Ari
We do not eat out. 1200 is for food and bills including credit cards. I cook everything at home. We do live in California and it is pretty expensive here
Del said: @Ari
We do not eat out. 1200 is for food and bills including credit cards. I cook everything at home. We do live in California and it is pretty expensive here
If 1200 is food and bills, 1800 is your portion of your mortgage, and then where is the rest of your money going?
Internet 140, Gas house 100, Electric 400, phone 220, Food 150/wk = 600 per month, auto insurance 300, health insurance 650, 500 per month in credit cards, Dog food 60, Cat Food 30, Household cleaning supplies/toiletries 150 per month = 3150
@Del
I see lots of things that can be modified. Change phone plan and carrier, get cheaper internet plan, raise the deductible on your health, car and home owners insurance (shop carriers if you need to) pay min on cc temporarily, cut food bill in half (I did this by doing OMAD), household cleaning supplies toiletries I’d also cut in half. Don’t shop at grocery store, Walmart is usually cheaper.
Riley said:
Post your budget, as I’m so confused where your $$ is going, as 2k+ going to everything outside of house is very weird.
Monthly Budget:
Internet 140, Gas house 100, Electric 400, phone 220, Food 150/wk = 600 per month, auto insurance 300, health insurance 650, 500 per month in credit cards, Dog food 60, Cat Food 30, Household cleaning supplies/toiletries 150 per month = 3150
So with no extra bills that leaves me with 850 left over each month.
That leaves me 950$ short on our bare budget budget.
And again that is if nothing happens. Just today my battery on my car died so there is 350$ added to the budget for the month.
When I was making good money I was bringing in 6k-10k a month and we were living very comfortably but all the money I have made I have put in this house or used to live off of now for the last 6 months.
I only took this job because the economy was terrible and I needed some kind of income but most likely within a year I can get back to what I was making but I need a little help in the meantime which is why I was looking at doing a modification until I get back on my feet.
@Del
Loan modifications are rare in the current environment, so you’re going to have to find a way to better stretch your budget, or you’ll have to sell sadly.
Is 500/month your cc.min payment?
Time to get Mint mobile or something, cut that phone bill in more than half.
Internet get a cheaper plan, plenty in the sub $50 area.
Those two will cut your monthly by over $200.
What are you driving that costs $300/month in insurance?
See if electric company offers any hardship type plans.
