I did not know all of what went into getting a home before I got it. How can I get myself on track?
Welcome @GettingMoneySmart!
Can you share more about your situation? Your income, the cost of the home, your mortgage payment, whether you’re paying PMI, what you could sell it for today, do you have any other debt, etc?
Whew. I make around $48,000 after taxes. I have a car that I owe about $10,000 on. I have student loans that total $55,000. I have $6,000 in credit card debt. The home sold for $145,000. My loan is for $140,500. Redfin says it’s worth around $160,000. I am paying PMI. My mortgage is $680 and about $260 goes to my mortgage. My escrow is around $194. I hope this answers your question.
Hey @GettingMoneySmart!
Yeah, wow. You really signed up for everything. The banks are shaking you down every month for every payment under the sun.
So you have very little equity in your house. If you sold it today, you’d likely walk away with $10K or less in cash after paying the realtor fees. It would stop all the housing payments though. I would need to know what you would have to spend on rent to decide if that’s a wise move.
But in general, you just need to get extremely serious about cleaning up this mess. Never borrow money again and start going after all of your debts. Right now you’re in a very tough situation because I imagine all your payments suck up all of your cash every month. So you’re in this trap. You don’t have money, and if you need something, you just have to go deeper into debt, making the trap even worse.
So you need to get out of that trap. And the way out is just plain old hard work. TEMPORARILY you have to GO HAM on this debt. Dial your living expenses down to zero. Pick up extra shifts or a second job. Sort all your debts from smallest to largest, then go NUTS on the smallest one. Once that one is gone, take that payment, plus all the extra and start attacking the next smallest one. Once you’re debt free, focus on getting rid of PMI (by paying principal on your house and possibly refinancing or asking for a PMI review).
Imagine that world: No car payment. No credit card payment. No student loan payment. No PMI. With ALL THAT EXTRA CASH every month, you can start investing in yourself instead of making the banks rich. You can become a millionaire! But it won’t be easy. We’re probably at 2-3 years of extremely hard work and focus. But imagine being there in 2-3 years and never in this mess for the rest of your life. If you stay on this track, keep borrowing to spend, you’ll work forever and never make any financial progress, making only the banks rich.
And yeah, I might look at selling your house or your car, depending on the details and the alternatives, but those will only take a few bites out of the problem. Either way you’re gonna have to go nuts and pay the debt. You can do it! Let us know how it’s going and when you’re debt free! 
2 Likes