debt BUT live in a money pit!!! What to do? (VENT))

[canuckgal]

I am in debt, like many others on this forum. I have a LOC which has vehicles on it (so no separate payment of a car loan), school stuff, and some credit cards (and the re-do this past summer of an attic insulation job gone bad which we have discovered this winter is STILL not quite right...grr ) This LOC is the only "debt" we have outside of our mortgage. Yes, it is 30,000.00 now that we have combined everything. I have put 3000.00 on it on top of the money we commit to pay every month, since last November and it's now slightly less than 27000.00, through working extra, and managing our cash flow better...the usual budgeting stuff that all of us do here. I plan to stay on that kind of roll! I do have an emerg fund in the bank, we have some retirement money saved up (60,000 but, locked in), but....

I live in a money pit though. It's an approx 60-70 yr old 1 1/2 story, 4 bedrooms. We bought 3 yrs ago, but had no down payment so we have just paid off the CMHC fees and basically still have next to no equity. My mortgage is cheaper than renting by FAR. However, we bought in a huge hurry, had a bad inspector who neglected to point out ALOT of things to us, and didn't realize how huge a cost a lot of these repairs are. We have done the roof, the attic insulation and some walls blown in from the inside, and have replaced the furnace, hot water tank, and install central air with a utilites/energy loan. We are painting. What needs to be done...finish off the siding (it's only 2/3 sided), and more insulation from the outside. New softener, and well and sewer pump needed. Get a sump pump. Probably septic/weeping tile in next 7-10 yrs, based on roots they roto-rooted out of the basement floor drain. Gut our basement and rebuild due to hidden but newly discovered mold (basic, no fancy den/rec room here!), replace carpet and also original 60+yr old lino, and redo kitchen someday, also 30 yr old windows need replacing. Fix the rotten job they did with mudding and the tub in the main bathroom. Needs some sort of ventilation for kitchen and bathrooms.

I discovered moisture and mold on my rotted windowsill upstairs the other day (the windows have plastic on them for the winter) and I am sure some of the windows are leaking into the wall...! That was the last straw for me and I am almost wishing I would leave a pot too long on the stove and this place would burn or something!

When you have issues like this, what do you all do? I can live with the old tacky lino in my bedroom, and my old wood cupboards with the tip-out door for a flour bin. The mold in the basement...no. The windows...no. BUT, how to afford this??? AAaaaagh! I am ready to tear my hair out over this house . If I paint and at the very LEAST do the basement, I could still never sell it and for the price I would get not get the same sq ft and bedrooms and would be back where I started...a starter home. We can't afford to fix it, but can't afford to get out either.

How gazelle do you go on debt when you have issues like this?

My head is spinning with what to do next. DO you put EVERYTHING onto your debt? I have a cushion of one months expenses in the bank and am paid biweekly, so this year I have 2 more "extra" pays in the bank...I know I should put them on the debt, but I am thinking of getting our friend to measure our upstairs/worst windows, run down to the States to pick them up ourselves (he saved 500.00 on one window alone doing this), and pay someone to install them. Or...put it towards the basement. And when the mortgage term runs out in 2012 and needs renegotiation to at least beg for more money for the rest of the windows, the siding, and the floors at the very least.

But...then what if interest rates go up or something? And every year I have this LOC debt is less time I have to contribute to retirement (we are in our very early 40's). Right now we budget so tight, with everything I can on the debt that we have stopped contributing ala Dave Ramsey. I know some of the cosmetic things like floors can wait awhile, but putting off some of the other things scares me, like the mold or some of the worst windows.

I am discouraged and had to just vent this all to SOMEONE! Anyone else here buy a clunker of a house and regret it greatly??? How do you balance all your $$ obligations? Anyone have any advice for me? Thanks for listening!

[umarider]

Hugs. I'm sorry to hear that you're having such a tough time with your house. Our homes are supposed to be our sanctuaries, and when they let us down it can be incredibly frustrating.

Personally, I'd start budgeting some money for home repairs. Even if you can't do everything this year, if you give yourself the means to do SOME things, then I think everything will look brighter. What good is having the LOC paid off if the house is falling down around you and you have health issues from the mold?

With the basement, I'd gut it, doing as much of the work myself (or w/ friends' help) and then find/fix the source of the water that causing the mold. Then I'd stop. I wouldn't redo the basement until later when the $ was available.

Choose the room upstairs with the worst window problems. Find out what is causing the problems. Is the trouble with the windows themselves, or how they are installed? Where is the moisture coming from? Is the plastic part of the problem? Maybe the plastic is trapping moisture/condensation? Anyway, use the first room/windows as your "home repair classroom" get as much info as you can on the cause & solution for the problems, then apply that info to the other rooms. If you get one room squared away, it can really help your mood when the other areas of the house get you down.

Make a list of the projects. Health related issues or things that you need to function(water, sewer/septic, etc.) go at the top of the list. Next would be things that impact the structural integrity of the house. Third would be efficiency issues (insulation etc) and last on the list would go decor-related things (although I'd always keep my eye out for free stuff like on Craigslist that can help me make the house more comfy!).

If you know that in 7-10 years you'll have to have work done on sewer lines, then start setting aside a little bit each month towards that goal. Even $25/month would add up to $1500 in 5 years.

I know it's especially hard to have these kinds of problems in the winter when you're stuck inside the very house that's driving you crazy, but spring will eventually come. Hang in there!

[Ellien C]

I agree with prioritizing things. Take it one step at a time. Things like the water softener, insulation and probably new windows can wait.

It sounds like you are in Canada. Will you get any money back for taxes? In the states, you CAN get a lot back on taxes in the first few years because of what you pay toward interest. That went a LONG way to helping us with many of our initial home repairs - tuckpointing and underlayment on roof, specifically. I still "need" new windows, but we've been living with the originals (1920...) for 10 years since we bought the house.

[HeatherAtHome]

Hugs! We're a similar boat when it comes to the house although it sounds like ours isn't quite so bad.

First of all, have you checked out this <-----Click it!

There are a bunch of Federal/Provincial grants available for fixing up your home. We had our evaluation last October and from the results, we should be able to get back $2000-4000 depending on the amount of work we do... and that was mostly on insulating as we have new windows already. (Windows are covered!) You get back a portion of what it costs, not the complete amount but every little bit helps!

How's your heating bill? DH and I are of the mind that it's better to fork over a chunk of change now for insulation than paying incredibly high heating costs over the long run. We have electric heat thank GOD because I'm sure with oil we'd be paying THOUSANDS this winter.

I agree with pp who said to gut the basement, fix moisture problem then stop. Wait a couple years before finishing the space, then you can *really* make sure the leak is gone for good instead of hidden behind a wall. Plus, I imagine it's bonus space and not necessary?

We've been fixing up our house on the cheap. I admit though, I love the charm of my old wood cabinets (I'm so jealous of your tilt out floor bin!) Since moving in October 1st, we've completely moved the bathroom, redid ALL the plumbing (was falling apart), some electrical, insulated the new bathroom walls, the attic, around doors and windows (pull off trim and insulate gaps behind them), spruced up the kitchen and I'm sure we haven't spent more than $5000. (Time to add up those receipts so we'll know for sure soon enough!)

Prioritize. Write a list of the big things that should be worked on and in order of importance. Call around for quotes. Get an idea of what things will cost. I also think that some cosmetic work *is* necessary if it helps you love your home. Obviously, don't go overboard, but a can or two of paint can make a world of difference. There are a lot of blogs out there with frugal DIY ideas. Just painting a pattern on a floor can perk it up!

Even if you don't have the time/energy/money to fix up everything the way you want, fix up one little corner where you can sit and relax.

[starling&diesel]

What could you sell it for? Would it make sense to get out of it and into a lower maintenance newer condo? Compared to the work that needs doing now and in the future?
What's your amortization? How much interest will you end up paying on your home?

It might make more sense to get out of it now ... when you seriously crunch the long-term numbers.

That's what we did.
We bought a hundred year old home that needed a lot of work, and once we moved in, we realized that it was simply beyond our finances to manage upkeeping the home. So we sold and moved into a no-hassle one year old condo.
Now we might sell this one and move into a co-op to save even more money.

[HeatherAtHome]

Ok, coming back to say that I might have come on a little too strong in my above post. Do you *want* to keep your house? You say that your monthly mortgage payment is less than rent (great!) but again, how long till the house is paid off?

I wouldn't worry extremely too much about not paying down the line of credit right now IF you're putting that money towards big things on the house instead. Sometimes getting things done sooner than later will save you money (like the mold!) not to mention your health.

That does seem like a tricky situation. Which way do you want to go with it? Keep or sell?

[canuckgal]

We have a 35yr mortgage. We have a 4% interest rate locked in for another almost 2 years.

Yes, Heather we have done some work (insulation of the attic and blown into some walls, as well as the furnace and hot water tank replaced and the AC instatlled) on our provincial utilities Energy smart loan plus some federal money. Already my gas is half of what it was last year. I am working on the paint (they even had SHINY paint on the ceiling, not noticeable until we put brighter lights in....eeeew) Yes we are in the process of prioritizing what needs to be done. I think it's gotta be basement and windows.

Starling...the market here in southeast MB is weird. We crunched some numbers with our Investors Group guy, and if we got out now, paying the real estate agent, the lawyer, the Energy smart loan, etc we would have to get A LOT more than what a few agents have told us we can put it on the market for and that's even with putting in a minimal basement and painting and leaving EVERYTHING else. With what we think we could get for it, we would at most be in a maybe 2-3 bedroom house, just as old, with not near the square footage (ours is about 1350 sq ft and 4 bedrooms). It's like prices have gone up with what we would be picking from with buying another, but we couldn't sell for much. With our budget we just cannot afford more than a starter home and most of them are pretty old from what I have seen. So, I feel stuck here. They are also tightening up on mortgage rules here and we don't have a down payment. Our current mortgage is manageable, but it's frustrating to have some of this stuff like the mold and the bad windows just sit and deteriorate.

So, all in all I feel discouraged, over my head with the "what if's" of repairs of the major things we can't do ourselves, and just stuck in limbo.

If anyone has any more ideas I'd appreciate it!

[Jackies Ladybug]

i would get a professional to come in and check your mold problem. they should be able to identify what is causing it and what type it is.
there are some types that are very damaging to your health and you need to find out about that NOW.
after you identify where the water is getting in, you need to repair that. which, depending, could be really affordable and as simple as injecting foam sealant into some holes.

after stopping the leaks, i would rip out any damaged drywall and clean up any mold i could find so you can make sure its all gone and not coming back.

then, repair anything that could be hazardous from the removal (replace sheet rock, etc..)

and then i would leave it until i could save up some money to buy windows. windows are more important than a basement because they will save you SOOOO much on energy costs.

after that, i would do the siding and insulation, then the basement, and then i would paint.

hopefully then it will be safe, and comfortable.

i wouldnt worry about trying to pay anything down right now, just at least make sure your payments on your loans cover intrest, and focus on your house for a year or two.

try to do as much yourself or with help from friends to save money, but really, it doesnt sound like this is going to do you in. i think youll be ok.