Ok, so in June of 2014, I purchased a house. Paid $35,000 for it, and mortgage payments are around $400/mth, plus $200/mth extra going into escrow for property taxes and homeowner’s insurance, as well as utilities. It’ll be paid off in another 5 or 6 years or so. Herein lies the dilemma, which admittedly, may be somewhat of a first world problem.
It’s too freaking big. It’s a gorgeous house, built in 1905. 5br/2.5ba, 3,400sqft. It’s two levels, as well as a full attic and basement.
The problem with this is the upkeep. It’s such an old house, and it needs a lot of repairs. A new deck was put on last summer, and that helped. But still, several rooms (in the lower half of the house, where it’s unoccupied) are without floors, walls, and ceilings. There are exposed joists, joists that need replaced, studs that need replaced, drywall that needs put up, ceilings needing hung, etc.
There’s two sets of stairs, one on either side, each leading to the front and side door of the house. 57 stairs on each side. Some of these are falling apart, which is a bit of a hazard. There’s no yard. It’s all tiered, wooded, and rife with snakes, thorns, and all sorts of junk. We have an a-hole neighbor deadset on making our lives miserable (though we are dealing with him), and it’s just absolutely aggravating.
We can’t keep the house clean because of the age, so much dust, and dirt pops up, it’s awful. Door sizes are uneven and non-standard, so replacing those are difficult, as is moving any large furniture or appliances through the house. Just carrying anything remotely heavy up all those stairs is an exercise in itself. It’s gas heat. Our heat ended up getting turned off last month because we owed $1,400 on the heating bill. That was for two months of heat. At the absolute minimum thermostat setting to keep the house at a livable temperature.
My fiancee and I, finances either shared together, or separate, we both make too much for assistance, but not enough to pay for something like that. Yes, the insulation in the house is horrible. But again, with everything else we have to pay for, replacing that is not feasible in our budget. We’re upside down every month.
Now, we are really lucky, because we purchased the house off my uncle, for what my family owed on the property. My mom and grandma and our family moved in there initially back in 1997, and lived there until 2010. They still owed $30,000 or so on it, and when my fiancee and I were looking for a place, we agreed to take over the payments in exchange for living there. Now, this is all in writing. My uncle is meticulous with this. We didn’t have to get a loan, go through a bank, or deal with credit or anything. It’s a good faith type of thing. Not to say it’s not legal. We have the notarized deed from the city with our names on it showing us as the homeowner. We’ve been faithful with our payments regardless, but either way, we don’t have to worry about foreclosure or anything like that.
But, I think, with all the repairs that need done (probably at least $10,000 in materials alone, plus getting people to help us with the repairs), we’re in over our head. Between mortgage, utilities, escrow, car insurance on two vehicles, health insurance, gas for the car, food, supplies for the house, and most importantly, supplies for our three year old daughter, we’re way over budget. Between the two of us, we probably clear, after taxes, $35,000 a year. We make too much for any kind of help, and feel bad even when we would qualify for help in the past.
What I’m considering, and I have yet to bring this up to the better half, is just trying to sell off the house for $60,000. It pays off what we owe, plus gives us extra to find something else that isn’t such a nightmare to work on. We’re dealing with plumbing and electrical issues, and it’s just taking its toll on us.
Next problem though, is our credit. Neither one of us has good credit, nor anyone that could cosign for us. We’d need a pretty hefty amount of cash to be approved for a home loan at that rate (probably 20%, plus closing costs), and then we have to deal with interest rates, risk of foreclosure, and so on, if we ran into any worse financial issues. I think I’d rather have a smaller house. We’d need at least 3 bedrooms though. But something with a yard, and preferably a garage as well, on a more welcoming landscape.
I’m kind of stuck here. What would you do, Oppo?
Here’s some pics of my house for reference. All taken last year.
Looking up towards the house from the driveway. (I apologize for the oversaturation)
The view from the deck during the day.
The back of the house
What I see at the bottom of my driveway
And the actual driveway, which is a nightmare in winter, even with 4WD, because of how bad it ices over.
And yes, those curves are real.
What would you do, Oppo?