Monday, July 12, 2010

"To The Wire To The Limit To The Wall" my homeownership struggles

Its been so hard the last couple of weeks and seems like it keeps getting worse. At first I was going to blog after all the smoke cleared but I think its even more important, to share what I have been going through so people can learn from my mistakes.

To make a longer story short, my home has been on the market for 6 months under the conditions of possible foreclosure. I will say based on bad information I decide to stop making payments on my home, so I could negotiate a short sale. I purchased my home in 2007 and have had it rented for 2 years because it was to far away from my job. It was pre Dave and there are days I could undo the situation but I cant.

The closer I have gotten to my debt free date the more I realized I wanted to be completely debt free. I didn't want to struggle with loosing money on a personal residence turned rental. I didn't want the stress of owning a home with a tenant and mortgage looming over me in a city an hour away (never purchase real estate you don't work or live near). I knew when I decided to list the house I would be opening up a BIG OLE CAN of worms but I wanted to at least see if selling the house was possible.

I have dealt with not so great Realtors and now a tenant who insist on not paying rent or cooperating with potential buyers because of the foreclosure. By the time I tried to explain to her I was not going to let the home actually foreclose, she had already decided she was going to rebel. So now the foreclosure date is looming over my head and I have done EVERYTHING possible to make sure the possible sale goes smooth. My new realtor keeps telling me she has a buyer but has not given me any paper work to begin the process, she actually hasn't even listed the house with her company. Today I wanted to take matters into my own hands and list the house on craigs list, but I know that wouldn't be trusting God.

The law firm says I have til July 23rd to pay $8600. The plan from day one was to borrow the money from my 401k which is the only exception to borrowing money on the Dave Ramsey plan. However I never anticipated it would take this long to sell. Its partially my fault for being extremely passive about my old realtor and now my new one, but I have yet to figure out how to deal with them.

Even though my credit isn't of much importance I DO NOT want that dreaded "Forecloser" stamp added to my report even if I never plan to borrow money again its just some silly psychological thing I got going on. If I pay the 8600 I get to keep my home without having to deal with the "AFTER FORECLOSURE" after math. If I wait to let the home foreclose, the bank will still work with me but I still have to deal with my tenant,eviction and the foreclosure workout plan which honestly all this at once has been way to much stress and that would be more than I care to take on.

If I pay the balance I will have another debt added back to my snowball and it will be another year or more paying it off. In hindsight I will be debt free except for the housing loans, but mentally it wont register that I will have paid off $40k in 3 years so I won't be able to relax until the ONLY debt is one mortgage or none at all. So that's the update, and I ask everyone to continue to keep me in prayer as every day is a struggle but I think I am doing a lot better since last week. I limit my phone calls with people that will speak negative things to me and contribute to my stress regarding my home. I was aware what I was getting myself into but all of this has been WAY more than I would have liked to have gone through. Not to mention I have to pray my tenant doesn't do damage to my home out of anger. If I could go back knowing what I know now I would have tried to sell the home 2 years ago when I moved out, but my stubbornness got the best of me, so time will tell how it all plays out so stay tuned....

Have you ever done anything financially that you regretted?


Rhitter94 said...

Yes. My ex-boyfriend and I were moving into a manufactured home, and we needed some cash for the moving truck, paint for the house and some other stuff. I tried to get a conventional personal loan, but couldn't. I was so desperate, I took a loan out with Cash Call. BIG MISTAKE (sorry for yelling. It ended up costing me way too much money. So, I got smart, and did some calculations, and took out a 401K loan which had a significantly lower interest rate and paid it off. In the same amount of time, I will pay less, paid off some off my debt and have a better grip on my budget.

Good luck on your situation.

Divine and Debt Free said...

I have done stupid in the past with loans as well. I just recently (within the last 5 months) paid off a debt from a payday advance (very stupid idea) I figure if I have to borrow any money this would be the only reason to do it. My only hope right now is that I don't end up having to actually cash that check and use the money, but either way I am prepared!

Thanks for the comments!

Young Mogul said...

I can only pray your situation improves. Try to find some way to stay encouraged through these temporary trials. You are making a good decision by limiting your interactions with negative people. This blog is a good outlet for venting your frustrations, so you don't have to talk to downbeat people.

I have no advice for your situation as I've never had to make such a choice. I think you should probably seek some sort of professional advice before making the loan from the 401(k). You don't want to make a rash decision, under duress, that you wind up regretting 2 years later, as is the case with your home.