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Under Water Mortgage- Huge Payment - Suze Orman what should I do?

#1 User is offline   worrywartmom 

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Posted 25 July 2011 - 10:44 PM

I purchased a home with a relative in 2007. First mortgage @6.65% and 2nd@10%. Although we knew it was a stretch, we were desperate to get into a home and after 2 years of searching and not being able to get anything at a reasonable price, we bought a house for 450K. Two years ago, my relative chose to walk away from home. I continued to pay mortgage, but have been using my savings and credit cards to maintain. Now home is worth between 300-350K. I am struggling to make payments, but I don't want to walk away. I don't want to ruin my credit and really believe in fulfilling my obligations. However, I'm not sure this makes sense financially. Mortgage w/taxes and insurance is about 3600 and income is 5453. The house is old and is in need of major necessary repairs, including windows (heating bills are outrageous). I can't refinance due to LTV and bank will not work with me in any way, esp. since relative's name is still on loan. I went from having no credit card debt to 12K in credit card debt. Don't want to move because I have a young child who attends the local school. Does it make sense for me to hold on? What would happen if I continued to pay my first mortgage and stopped paying the second? Please help me figure a solution. I feel trapped. I haven't been sleeping or eating lately due to the stress this is causing.
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#2 User is offline   Scoobie 

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Posted 01 August 2011 - 11:46 AM

What will your quality of life be if you hold on to the house?

What would your quality of life be if you lived in a home or apartment you could afford in your childs school district?

Right now you are providing a house for your child...
But a house does not define a home... no matter how attached you may be to the house. Just something to think about.

Also, since you are going deeper in debt. How long can you stay in the home before you reach the max on your credit cards and then are possibly forced to leave it anyway?

Or can you still stay in the home and pay off your debt? What would it take to do that?
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