Oppo, guide me please.

"WesBarton89 - The Way to Santa Fe" (wesbarton89) 07/07/2015 at 14:14 • Filed to: None

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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?

dogisbadob > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:16

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That house is fucking awesome! Old houses are cool as fuck! And $35k is fucking cheap!

jkm7680 > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:17

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Great looking view!

Fcking cheap though. $35,000 is a tool shed in my area.

jester74 > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:18

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where were you able to get 3400sq ft for 35K?

SidewaysOnDirt still misses Bowie > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:18

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Keep it. All homes need upkeep.

Twingo Tamer - About to descend into project car hell. > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:20

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Just repair the bare minimum and live in the few rooms that are in decent enough condition. Try using some small convection heaters in the main rooms you use instead of the gas heating (I do this). It sounds like you’d have serious trouble moving elsewhere.

Mr. Ontop, No Strokes, No Smokes...Goes Fast. > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:21

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Where the hell are you that you can get a decent place for that price?

cletus44 aka Clayton Seams > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:21

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In Toronto, $35k doesn’t even buy you a garden shed.

Quadradeuce > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:22

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Get a roommate.

OPPOsaurus WRX > jkm7680 07/07/2015 at 14:22

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right? maybe with that view $400,000, holy shit

BigBlock440 > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:22

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Any way to rent out a room or two? That’d get rid of your mortgage payments.

OPPOsaurus WRX > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:23

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can you get any renters? could you put a kitchen in the lower part and make it a 2-family?

x87172 > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:23

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Sick property! Can’t believe it’s only worth $60k.

One of these P.O.S. condo units just went on sale for $325k near me!

(Yes, I subscribe to the Zillow email. Don’t judge.)

JQJ213- Now With An Extra Cylinder! > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:24

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That’s an amazing house there! You’ll probably struggle to find something even similar to it...especially not for that price you paid. I think you’ll regret selling it if you do. Try to just go slowly and focus on one thing at a time. You’ll have an unbelievable house at the end of it.

WesBarton89 - The Way to Santa Fe > jkm7680 07/07/2015 at 14:25

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Zillow’s estimate (which I take with a grain of salt) is around $119k, down from $144k estimate in 2014. In comparison, the city and zip code average estimates for homes are around $84-$85k right now. With $20,000 down I could probably get something decent.

Thanks though!

OPPOsaurus WRX > SidewaysOnDirt still misses Bowie 07/07/2015 at 14:26

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what you said it true, but there is a huge difference between a house say 1970+ and his at 1905.

LongbowMkII > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:26

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I’m in a similar situation (cheap old house), but I think mine is more livable... I’m facing many of the same type of issues. I need new exterior paint/siding, roof, finished attic endless little things. You have a much better view and honestly, that might get a big offer. I don’t see my family living here forever (1 bathroom in a house that predates indoor plumbing) but the to do list seems interminable.

RamblinRover Luxury-Yacht > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:27

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It sounds like the repairs needed, while definitely required to make it properly livable, with the exception of the stairs are internal, so not immediate risk to the house if they aren’t done. Here’s what I would do if keeping the house : insulate and repair the lower half to live there temporarily if possible. Why? Because without drywall in place and with rooms possible to redo piecemeal, you can do that with minimal expense - starting with throwing up insulation. The lower half of the house will be very possible to insulate with the walls “open”, and to keep warm enough with electric heat. It means camping out to an extent, but it’s a place to get started and will keep the wolf from the door on heating costs and keep things to a very minimal budget. My dad ended up doing something very similar in a turn of the century house years ago.

If not keeping the house, well, the problem I see is matching even what you’re looking for (something smaller) on your budget will be hard. You’ve got something bigger than what you need, but it’s going to be hard to beat *if* you can get secondary costs under control.

WesBarton89 - The Way to Santa Fe > OPPOsaurus WRX 07/07/2015 at 14:27

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We had renters, and they turned out to be bad news, so we evicted them, and it turned into a bit of a nightmare. And it is a two-family, there was a kitchen in the lower part, but it was all gutted due to a steam leak. Still in repairs.

WesBarton89 - The Way to Santa Fe > Mr. Ontop, No Strokes, No Smokes...Goes Fast. 07/07/2015 at 14:27

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Western MD.

Steve in Manhattan > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:28

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Where is this?

I would call a licensed home inspector (or a contractor if you know one), and get an estimate of what it would take to put the house right. It might be low enough to take a small home equity loan out to finish. Also, it’s a tool to sell the house, if you decide not to stay. On the other hand, if you find out something that renders the house uninhabitable, you might be legally required to disclose it. Proceed with caution.

At any rate, you need to negotiate an as-is sale in any event.

Alfalfa Romeo > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:28

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Convert half of ground floor into garage. Or even the entire ground floor! Then you only have to pay to heat/insulate what’s left.

WesBarton89 - The Way to Santa Fe > jester74 07/07/2015 at 14:29

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Western Maryland. Got lucky I guess.

Rico > SidewaysOnDirt still misses Bowie 07/07/2015 at 14:29

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True but from the sounds of it, seems like the entire house will have to be gutted at some point for insulation and electrical purposes.

WesBarton89 - The Way to Santa Fe > Twingo Tamer - About to descend into project car hell. 07/07/2015 at 14:29

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That’s what we’ve been trying to do. We’ve gotten by with it so far.

And yeah we probably would have serious trouble. Just a lot of headache where we’re at now.

Steve in Manhattan > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:29

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Near Sharpsburg? Grew up in MD/DC and took many an Antietam tour.

Slant6 > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:30

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I’m 18. I have virtually no experience with homes, money, or giving advice for that matter. Here goes nothing.

If I were you I would find a way to keep the parts of the house you need fully functional and find a way to preserve the rest of it until you can afford to take care of it. I’m saying bypass the heating system to the unoccupied parts of the house and insulate the parts you do use. Get insulated doors between the rooms you do use and the ones you don’t. Keep the part you live in alive and do the minimum you have to to keep the rest of it intact. When you feel stable enough to complete the house do it in steps and build it how you like it.

Once you complete some parts of it maybe consider renting some rooms out. It would provide you with extra income for upkeep of the house. People really like living in old houses like that.

At 35k any money you put into this is money well spent. I’m sure it’s worth WAY more than that and once you want to move you can count on having a valuable asset to sell.

OPPOsaurus WRX > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:30

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i would say your best way to go would be careful in picking the next one renter. I’m in the same place as you, kids house, cars, health care is a super bitch. I work nights to keep above water. I did all the work on my house on my own. if you can increase your income you can pay all the bills. the renters sounds like the best route, even if you had to take a small loan to get the kitchen back in shape. bust it out and get someone in there.

WesBarton89 - The Way to Santa Fe > BigBlock440 07/07/2015 at 14:30

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We tried renting out the lower half. That ended up in disaster.

themanwithsauce - has as many vehicles as job titles > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:31

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Because of the land attached as well as the house’s value in and of itself, have you considered a home equity loan or applying for a low to no interest home improvement loan? Or mortgage extension or something?

Have an appraiser take a look at the place. If you could get a written estimate for some of those repairs and get an official appraisal for much more than 60k, you can probably get some of those taken care of enough to make it liveable. Yes, you now have to pay off the loan when you sell......but your house probably increased as much or more in value if those just go into upgrades.

Party-vi > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:32

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Do you have a budget? Do you know all your actual expenditures each month? Remember selling a house costs money, too.

Is there anything you can do to cut back even more? Any monthly services or subscriptions you don’t need? Do you guys need two cars? Is there a schedule you can work out with her where you only need one car?

The work you listed is in the unoccupied parts of the house - fuck those parts of the house for now - they aren’t important unless they’re costing you money. Are you heating parts of the house that don’t need to be heated? $1,400 over two months is ridiculous for a gas furnace unless you’ve got a very inefficient furnace or no insulation. The back yard can be fixed with sweat and hard work. You should ask for assistance and home building materials for birthdays instead of stuff for yourselves. Can your parents help any?

Rico > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:33

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I don’t have a ton of advice to offer here but I will say you can claim home repairs on your taxes up to a certain amount so make sure you document and keep every receipt for everything, even if it is a box of nails.

Birddog > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:33

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$1400 for heat?!

Yikes!

I’d try to find a way to stick it out. Part time jobs, selling organs, anything.

Have you talked to the Energy companies about rebates for upgrades?

I know Trane runs a lot of assistance programs to help improve home efficiency. They pay for Windows, doors, siding, roofs, boilers, etc and the income levels are pretty liberal.

WesBarton89 - The Way to Santa Fe > JQJ213- Now With An Extra Cylinder! 07/07/2015 at 14:34

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Thank you. Yeah, I know I would struggle to find something, and I might regret it, but I want a place where my daughter can go outside and play and not worry about falling down steps or getting hurt, or getting snakebit. She’s never outside our sight, but if you’ve ever been around a curious three year old, you know how crafty and sneaky they can be. I had to stop her from grabbing at a 5 foot black snake, that we didn’t see at first, and she did, a couple weeks ago.

valis86 > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:34

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Where on earth is this, where you can get that much house for that little cash? I live in Houston, home of El Cheapo Homes, and couldn’t get a quarter of that house for what I paid.

Party-vi > x87172 07/07/2015 at 14:35

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Judging.

WesBarton89 - The Way to Santa Fe > Steve in Manhattan 07/07/2015 at 14:35

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Kind of. Cumberland, MD. You know my address! You sent me a keychain, remember? Lol. Which I’m still rocking on my lanyard.

Steve in Manhattan > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:38

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Oh that’s right! - the Angry Bird! Glad you’re still enjoying it.

And if you haven’t taken a bike tour of Antietam, see if they still do them. A buddy and I rode with a historian back in the 90s - fascinating. Remains America’s bloodiest day.

ACESandEIGHTS > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:39

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Man, that’s a nice house. Nice town too. Did I mention the view?

Some points:

1) I wish I had problems that stemmed from a $35K house and not a $435K house.

2) Is the Blair Witch a potential danger in western Maryland?

3) Is the Blair Witch real?

4) Don’t move. You’ll come out on top eventually. Educate, rise up, make more money eventually, before you know it you’ll be paying double your mortgage payment and you’ll own the place and be paying a couple hundred dollars a month for living expenses. That cannot be understated. You will probably rise above this and be in an enviable position, the likes of which many people don’t get a crack at. In the meantime, it’s a struggle, but you’ll have some things going for you, like a) something to give to your children b) something to retire/die in c) a home in your hometown as opposed to some random apartment on the edge of some too-expensive city.

I mean, shoot. There’s Washingtonians who would drive out to your town just to afford real estate. You’re one up on them already—you’re not a Washingtonian. Lucky you.

Pixel > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:40

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Check with your utility company, there may be rebate programs for insulation, better furnace, etc. I had a free energy audit through the one here in RI on my pre-1895 house and was told my walls had zero insulation. Through the rebate program I got $3500 worth of blown-in insulation for $1000.

EL_ULY > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:45

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deal of he century!!!!!!!!!!!!!!

Mr. Ontop, No Strokes, No Smokes...Goes Fast. > jkm7680 07/07/2015 at 14:46

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$35000 isn’t even a decent down payment out here.

dogisbadob > OPPOsaurus WRX 07/07/2015 at 14:50

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Yeah, there is a huge difference. The 1905 house is more awesome

WesBarton89 - The Way to Santa Fe > Party-vi 07/07/2015 at 14:51

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I do have a budget, and I know my expenditures.

Furnace is inefficient, and the insulation is bad all the way around. There’s no flat grass for a yard, but there is a decent patio area.

My mom and stepdad have helped a lot, as have other family members.

We don’t have internet. We don’t have cable. We both have phones, but that’s the only subscription service, and it’s on my mom’s plan, because she has a family plan and it saves us all money. We do need two cars even though only one is road ready right now. We keep the Durango on the insurance because it lowers our rates, even though it’s not driveable at the moment. My fiancee and I work in different places, at different times, and sometimes her job requires her to have a vehicle there in case she has to use it for work. I usually grab the bus to work.

That is sound advice though. Thank you.

Textured Soy Protein > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:51

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A.k.a. “East West Virginia”

WesBarton89 - The Way to Santa Fe > Textured Soy Protein 07/07/2015 at 14:52

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Pretty much! I can get to WV through five different ways, ranging anywhere from a 5-20 minute drive.

Textured Soy Protein > WesBarton89 - The Way to Santa Fe 07/07/2015 at 14:54

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Don’t just assume that you don’t qualify for any government assistance programs. Have you actually looked into what you would or would not qualify for? You could very well qualify for things. Whether it’s help with utilities, food, whatever else, that’ll help pay some part of your monthly bills which then gives you more flexibility to pay the house costs.

Your first step should be to call the United Way and tell them about your situation. They can connect you with both government and charitable organizations that can help you. Call 211 and you’ll get connected with your local/regional United Way call center.

Party-vi > WesBarton89 - The Way to Santa Fe 07/07/2015 at 15:00

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It’s cheaper to keep the Durango even with registration and emissions every couple years? Would it work out better if you could sell it and use the money to fix the stairs or at least get your heating under control?

OPPOsaurus WRX > dogisbadob 07/07/2015 at 15:00

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unless your the one maintaining it. I toured a 1754 house I was interested in buying. As awesome as it was, I decided I didn;t really want to own a museum. the floors wern;t just wavy, there were 151 drunk. I really want a concrete foundation. It is just far superior to brick, block, or field stone.

JawzX2, Boost Addict. 1.6t, 2.7tt, 4.2t > WesBarton89 - The Way to Santa Fe 07/07/2015 at 15:04

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I don’t know about Maryland, but Vermont has many grants available for energy efficiency improvements to existing property. You don’t necessarily even have to qualify as low income for some of them... Is there any such thing where you are? Could help a bunch... But I’m generally on board with the others: If that place is structurally sound you’ll never get into anything even remotely comparable for that money. Stick with it, and if you can stomach the effort try to find some good tenants to rent out that lower half...

BigBlock440 > WesBarton89 - The Way to Santa Fe 07/07/2015 at 15:04

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I can see how you wouldn’t want to go down that road again, but if you could get someone decent in there it would solve a few problems. That’s the catch though, getting somebody decent.

WesBarton89 - The Way to Santa Fe > Party-vi 07/07/2015 at 15:04

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Once it’s MD inspected, it’s inspected as long as we own the vehicle. So we only have to worry about tags/registration every two years, which comes out to $135. We probably won’t be able to drive the Infiniti as much during the winter time, which is why we hold on to the Durango. Plus, we do go camping every once in awhile, and it’s a whole lot easier to haul a kayak, tents, and supplies in an SUV than a sedan. Plus, taking it off the insurance raises our premiums by about $50 per month. So, yeah, it’s honestly better to keep it on there I think. We did consider selling it though.

64Mali > WesBarton89 - The Way to Santa Fe 07/07/2015 at 15:04

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Kind of jealous on what your house cost, my 1400 sqft house was 360k. That said I just insulated one of my basement rooms, cost a bit but beat paying someone to do.

Putting up insulation is easy if you use the foam stuff and even covering 1 or 2 walls with it will make a huge difference. Just make sure you put up stud walls and sheet rock as the foam is a fire hazard.

I rented a house that had no insulation and used portable electric heaters in just the rooms I was living in, just have to watch for pipe freezing. But I would say just start doing small insulation jobs. A wall/room at time and it will make a huge difference in the heat. Do one small project at time.

Its what I’m doing currently. I need over 30k in repairs to my house in material alone.

Good luck and if you have building questions feel free to reach out.

Highlander-Datsuns are Forever > WesBarton89 - The Way to Santa Fe 07/07/2015 at 15:10

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I asked myself a similar question about he last house we were buying, a bit of a fixer but it is in a location I love and it has an amazing view. The house has good bones if the pluming and electrical is a bit funky. I have already replaced all the doors and windows ($12k), spent about $1000 on pluming maybe $100 on electrical and have replaced all the flooring down stairs ($2k). If you think you will stay there for another 5-10 years stay there, otherwise consider dumping it and get something that is move-in ready. Owning a home is just fucking expensive, that’s the truth. Here’s a typical winter day on my deck.

Party-vi > WesBarton89 - The Way to Santa Fe 07/07/2015 at 15:12

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Oh I know about MD inspections - as long as it passes inspection once you could take the doors off it and cut a hole in the roof and still re-register it. Winters in Cumberland can be pretty brutal. Good point.

Look at your HVAC system. If you’ve got exposed ducts that you can see, they should be insulated. If you’ve got ductwork blowing air into spaces where you don’t live, you should block or cap them to decrease wasting heat in those areas. Get thinner furnace filters so the motor doesn’t have to draw as much power to push air through them.

Rico > WesBarton89 - The Way to Santa Fe 07/07/2015 at 15:33

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Wait what’s the math on this? Removing the vehicle raises premiums? How does that work? Would the monthly cost of the Durango’s insurance cost more or less than paying an extra $50 a month? Have you shopped around on insurance quotes just for the Infiniti?

As for kayaking/camping renting a car will be cheaper overall for those once in a while excursions, at least on paper.

deekster_caddy > WesBarton89 - The Way to Santa Fe 07/07/2015 at 15:36

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Homes are not cheap. You have a few choices, but it sounds like you can’t afford any of them.

1) Get a construction loan. Hire a contractor to gut and overhaul the house. Insulation, good windows, very basic interior, new efficient heating system. That leaves you to do whatever to the interior over time, but begins your energy savings right away.

2) learn about home construction. DIY, replace windows. Insulate. One room at a time, gut and refinish with modern materials. It’s not that hard, but can be time consuming. Have lots of friends who know about electrical and construction who you can turn to for advice.

3) learn about heating systems. Most heating systems have ways to shut off individual rooms. Don’t heat like 2/3 of the house for the winter until you figure out items 1) and 2).

After 1) and 2) you can either sell the place for mad profit, or if you can still afford to live there, stay.

4) hit the lotto. Buy a place in Antigua for the winters.

Some financing options if 4) is not a viable option:

4a) An “Interest only” loan. This indicates that you have no intention of paying back the principle and are planning on selling the place for profit.

4b) a 30 yr mortgage. This tends to give the lowest monthly payment options. See online calculator for more details.

4c) a 15 yr mortgage. This usually offers the best interest rates, but has a higher monthly payment. See online mortgage calculators for more examples.

There are other options as well, I’m sure many have been alluded to here.

Our house was built in 1890 and we have good insulation and new windows. The steam heat system though, that’s a killer.

Rico > WesBarton89 - The Way to Santa Fe 07/07/2015 at 15:37

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If you ever do rent out, this might not be the best factor to determine someone’s worthiness but definitely make it so that they have to be over a certain credit score to qualify. I know it sounds shitty and I know you said your credit is not that great but if you are renting to someone you wouldn’t know from a hole in the wall it is a great way to determine someone who is going to be consistent with paying rent in full and on time.

SummerFun > jkm7680 07/07/2015 at 15:38

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$35k can’t buy a parking space where I live. A townhouse starts over $500k.

WesBarton89 - The Way to Santa Fe > Rico 07/07/2015 at 15:46

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It’s a multi-car discount that we get. The monthly cost of either vehicle by itself is around $120 a month, but combined we’re paying around $155 a month.

RPM esq. > WesBarton89 - The Way to Santa Fe 07/07/2015 at 15:46

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First off, I should note that where I live your house would be worth close to $500k even in the condition you describe, so it’s a little hard for me to get my head around the numbers here. But first and foremost, don’t sell it for less than it’s worth.

The thing that sticks out to me is your mortgage or quasi-mortgage terms. Appealing though it is to be only 5 years from paying it off, you have a lot of equity in the house if you bought it for 35k and it’s worth 80-100, and if you are having trouble making ends meet, the most direct solution would be to refinance, so that your payments are lower but spread out over, say, 10 years. You say that you took over mortgage payments and are listed as the homeowner, but don’t have to worry about foreclosure. How can that be? If someone paid off the loan (your uncle?) and you’re paying them back over time, would it be possible to work out new terms with them/him? Or is someone else still making mortgage payments, and you’re reimbursing them? Because if so, there is still a mortgage out there (secured by the house and thus the right to foreclose), but you might be able to refinance it.

Alternatively—and this is a less attractive solution—given how much equity you have in the house, unless your credit is really disastrous you should be able to get a home equity loan to finance repairs, which you would be able to pay off when you sell the house. This would allow you to stay afloat while gradually fixing it up, and hopefully sell at an even greater profit. If you want to sell, list it but keep gradually working on it until the right offer comes in.

The best way to improve your credit is to demonstrate that you are a good credit risk—that is, borrow money and pay it back—which suggests to me that, knowing that you can make the payments, it would probably be ideal to actually be the borrower of record, if possible.

WesBarton89 - The Way to Santa Fe > RPM esq. 07/07/2015 at 15:52

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The house was originally owned by the bank in the 90s. My uncle bought it outright from them so that he was the owner of the house, at the time it was something like $47,000. My mom and grandma paid him small amounts over time as agreement, since it was in his name, if something happened, they wouldn’t deal with foreclosure, since it was essentially, according to the bank and real estate companies, ‘paid off’. As of 2014, when we moved in, it was down to about $30,000, plus my uncle paid up front for the new deck to be put on, and he added the cost of that to the end cost of the house, putting it up to $35k. So, technically, we’re just paying back the rest of what my family owed him on the house.

I’ve thought about looking into a home equity loan. It might not be a bad idea.

someassemblyrequired > WesBarton89 - The Way to Santa Fe 07/07/2015 at 18:41

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We have a National Register of Historic Places (translation: major pain in the ass) 1842 house in Connecticut. So I hear you on big, old house problems.

Here’s a few ideas:

Better insulation/heating issues: check out if your local utility offers energy efficiency rebates - they seem to be pretty common in the Northeast, not sure about MD. Some cheap fixes - heavy curtains on the windows, open your south facing curtains in the am. If I am looking at your view right, you have a south exposure, so free heat if you play your cards right. I’m guessing you have a single zone heating system, but get a programmable thermostat anyways, and let the place get cold during the day and at night when you don’t really care. It’s a lot cheaper to keep a house at 55 than 72 since heat loss is proportional to temperature difference. You can get a decent programmable thermostat for $30-40 at Home Depot. Let the rooms that don’t have plumbing and are unused get cold - they don’t need heat and you can shut off the rads in those rooms. Also it sounds like upgrading the furnace might save you in the long run - might be a good idea to finance a more efficient unit.

Renters: I don’t remember there being any military close to Cumberland, but if there is, post the lower half for rent at the base. Any trouble from a military renter or non-payment, you just go to their CO.

Cheap reno supplies: See if there is a Habitat for Humanity ReStore or something similar close by. There is so much good stuff at those places for doing a budget reno and it is cheap cheap cheap. Also, make sure to run new wiring and plumbing in the bad section while the walls are open.

On general old house maintenance: With an old house you often need to shore up and sister some of the structure and you can do this by yourself cheap.. Get some adjustable jack posts and I’ve always just sistered the existing beams and/or added extra supports as necessary. Use the jack posts to level out the floors slowly (a little at a time helps the floors above adjust). With the joists, it’s often easier to just add a second joist (sister) right next to the existing joist. They sell double joist hangers at Home Depot, so just use those at the ends, and lag bolt the old and new joists together.

It sounds like you would be better off if you can make it, to get the house paid off in 4-5 years. Then you only have expenses. It sucks but it will be worth it if you can make it work.

Free advice probably worth what you paid for it, but if I can help with any more advice let me know.

shop-teacher > WesBarton89 - The Way to Santa Fe 07/07/2015 at 19:13

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I see two options for you.

1. Get an HVAC contractor in there and disconnect heat to the unused parts of the house, then insulate the rest. Insulation is cheap and easy to install.

2. Sell it and rent. There is no shame in renting, and then you don’t have to pay for upkeep and repairs.

CaptDale - is secretly British > WesBarton89 - The Way to Santa Fe 07/07/2015 at 19:20

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That place is beautiful! I wish I could help out if I lived near by

wiffleballtony > WesBarton89 - The Way to Santa Fe 07/07/2015 at 19:26

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I read that as $200/meth.

smobgirl > WesBarton89 - The Way to Santa Fe 07/07/2015 at 22:57

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If you were to refinance through a bank, I think there are FHA programs that can roll a certain amount of repair funding into the actual home loan, which have lower rates than a home equity loan (but might require mortgage insurance). It might be worth looking into. Especially if you could then get the second kitchen working and rent out part of the house to cover some of the mortgage. Considering the relatively small amount of the loan and the actual value of the property, you shouldn’t have too much trouble qualifying and paying the mortgage back to the bank would do more to improve your credit than paying family members.