Which way to go?

[Donna423]

I am 50 years old, divorced. My divorce ruined my credit (just under 600 now). I inherited a house which needed LOTS of repairs. Bones were good but everything else needed to be replaced basically gutting each room one at a time. House was built in 1952 and NOTHING had been done since then. Some of the floors were falling through. I am about 3/4 way through. Roof, heater, etc all new, new bathroom, kitchen almost finished. I have not taken out a mortgage on it. Have been doing a little at a time. It has been 4 years. I have a great construction guy who works with me a little at a time and does excellent work. Needless to say, I am tired. I am living in the house while all of this is being done. My take home income is $3200 per month. In the meantime, I have incurred some very high interest rate debt - personal loan $6,000 @ 25%, CC $2,000 at 29% and inheritance tax $20,000 at 25% and car $6,000 at 13%! It is killing me. I am paying out about $1,000 per month on high interest debt.

Should I just get a mortgagte for the debt? I really don't want to - I feel this house is my security and my retirement. Not sure what to do. I feel like a am walking blind here and could use some good financial advice. I am having a hard time keeping up with the debt on top of all of my normal bills and continuing work on the house.

Thank you for your advice and comments.

[97guns]

your interest rates are high but your balances are easily managable. you just need to tighten up the belt and throw more than $1000 to the debt every month. i would chop away harder at the $2K credit card right now then move on to the $6K loan.

[bjl584]

Originally Posted by Donna423

I am 50 years old, divorced. My divorce ruined my credit (just under 600 now). I inherited a house which needed LOTS of repairs. Bones were good but everything else needed to be replaced basically gutting each room one at a time. House was built in 1952 and NOTHING had been done since then. Some of the floors were falling through. I am about 3/4 way through. Roof, heater, etc all new, new bathroom, kitchen almost finished. I have not taken out a mortgage on it. Have been doing a little at a time. It has been 4 years. I have a great construction guy who works with me a little at a time and does excellent work. Needless to say, I am tired. I am living in the house while all of this is being done. My take home income is $3200 per month. In the meantime, I have incurred some very high interest rate debt - personal loan $6,000 @ 25%, CC $2,000 at 29% and inheritance tax $20,000 at 25% and car $6,000 at 13%! It is killing me. I am paying out about $1,000 per month on high interest debt.

Should I just get a mortgagte for the debt? I really don't want to - I feel this house is my security and my retirement. Not sure what to do. I feel like a am walking blind here and could use some good financial advice. I am having a hard time keeping up with the debt on top of all of my normal bills and continuing work on the house.

Thank you for your advice and comments.

Sounds like you inherted a money pit. As in your other thread, I think that you should cut your losses, sell the house, pay off your debts, and move on. A fresh start with no debt will give you much more security and piece of mond in retirement and in the present.

[naomibatac]

I agree with Brian, sell the house and pay whatever you owe. Make a brand new start. If you still have money left, buy a new home that you can afford on a tight budget. This time frugality is the best policy. Wish you well.

[KennySoward]

I kinda agree with these folks. You have so much time on this earth, and if you don't want to spend it fixing up an old house, then don't. Sounds like you've done a lot on it already, and there seem to be tons of people interested in turning around old houses...within reason.

I'd just get it to the point where it is sellable and then do it.

If you have an emotional attachment to the house, then it sounds like a lifelong project, provided you also understand it to be just that. I also agree with your income that the debt you have is manageable. Just hit one at a time.

[JoshuaHeckathorn]

Sell the house. You give the impression that you don't enjoy working on it and it sounds more like a burden then security. Don't think of this place as your retirement either. Get the best price you can for it, get rid of your high-interest debt, and move on. My guess is you'll be happier- I know I would be.