Help empower me to move on

[jIM_Ohio]

I feel for you. I don't know you and your story makes me realize how much I value the friendship and trust I have with my wife. I could not imagine that falling apart, and if it did, I know I would be a wreck.

Sell the house- gets you cash on hand and it appears you would NOT get taxed on the gains (because the divorce is not final). Then use the cash to invest and secure YOUR future. If you do not secure your future, you will probably regret many of histories decisions, and that is no way to live in retirement. MOVE ON. Move on from the house, move on from the divorce and know that if your kids really do understand and care, it's not the house that makes it a home, it's the people in it which make it a home.

Interesting sidenote. My wife and I moved in Dec of 2005. We looked at each other one day over xmas and commented that it did not take long for us to make this a home- it was like we never lived anywhere else. My point is that you can restart yourself somewhere within 6-9 months and you will barely remember the old days in a larger house.

If you can rent the rooms out, that is an option, but being a land lady is not for everyone.

If you stretch to keep the house now and for around 1-3 years, you solved a short term problem and complicated longer term solutions. You have a sizable gain in the house- what if it's value drops further?

[snafu]

Have you seen Maria Schriver/ Schwarzenegger's new book on self discovery? Add your name to the waiting list at the local library.

Since your employment is going to change & he continues to make mortgage payments [call ea. month to make sure he is not in arrears] it would be helpful to have the house equity help you rather than be an albatross. I suggest you give up a level of privacy in exchange for a combination of $$ and company by renting rooms to college students/visitng profs if there is a community college/university in the area.

Alternately, 'house-share' with professionals in your area. This doesn't preclude your kids from being home in the summer, 'think outside the box' and switch room useage.

2nd sign up for a course in financial planning at your local community college. Getting unbiased information on options in uncertain times will be helpful. There are serious, long term, economic contractions to face down. Keep in mind as your house value decreases, those decreases are also in the area you re-locate.

[LuxLiving]

Remember if you do sell the house you can always rent a hotel suite for the couple of times a year your kids are home. Heck, make Marriott the holiday headquarters for the next couple of years. I agree with the guys here, you'd quickly make any new place home. Maybe look at buying a small 2 bedroom ground-level condo in your new locale. Poof!! and Viola!! - Home maintenance taken care of into your old age w/room for visitors.

Your kids are young and most likely more resilient than you realize. They can be comfy on a couch or even the floor in a sleeping bag if Momma's happy they will be too! Think of it as an adventure and make it one for them as well. I understand, where you live now is home and all, but they'll bounce back.

Most likely if you keep your chin up they'll think...
"Hey, Mom's moving on, so what if Dad was a jerk, she's one heck of a gal, look at her starting out fresh and loving it! That's the kind of grown-up I want to be."

A few weekends on a lumpy sofa aren't going to kill them while you transition to your new future!

FYI - Since you're a newbie here - If I were in your position, I'd listen carefully to what disneysteve & Jim_OH are telling you. They're pretty money savvy and I would take a long hard look at what they are advising and see if it wouldn't be long-term best for my interest and well-being.

What would happen if you put the house on the market at a decent price for today's conditions, while your soon to be ex continues to make payments w/a goal to refi after two months or three months? If it sells okay. If not, you can still be pursuing the refinancing angle.

[disneysteve]

What would happen if you put the house on the market at a decent price for today's conditions, while your soon to be ex continues to make payments w/a goal to refi after two months or three months? If it sells okay. If not, you can still be pursuing the refinancing angle.

I just thought of something. Are you legally free to sell the house currently? You did say it was in your name, so I'm assuming you are, unless there are terms of your agreement that say otherwise.

Just to give you some additional numbers, let's say you walk away with $350,000. You can currently get about 4% on that money, but let's be conservative and say 3.75%. In a year, that will earn you over $12,000 in interest. You can use that interest to pay your rent, so the first $1,000 each month would be taken care of. You'd only have to come up with the difference plus all of your maintenance would be taken care of and your utility bills would be a lot smaller.

Moving is emotional and a pain in the butt. I dread the day we have to leave our home. But as others have said, sometimes you need that short-term sacrifice for the long-term good.

BTW, thanks for the compliment, Lux.

ETA: My mom's situation is different than yours but worth mentioning. She is widowed. Their home was paid for. Still, between taxes, insurance, utilities and maintenance, she was spending a fair amount to live there. She sold the place a year ago and moved into an apartment in a very nice senior complex. She invested the proceeds from the sale and that now generates more in interest per month than she pays in rent, so she's basically living free. Trust me. It is not a bad situation to be in.

[aida2003]

All I can see is that OP is very emotionally attached to the house based on the fact that it was valued at $600k-$650k 3 years ago. But this is in the past(!!!) and the past never guarantees the future. Maybe you'll have to wait 3-5 years for the RE rebound, but it could take 10-20 years. Nobody knows how everything will play out because the credit/financial crisis this country is experiencing now is probably the first of its kind thanks to everyone's irresposibility (gov't spending, easy credit, consumer crazy spending, etc.). If you know that your employment will end in a year, if I were you, I'd start preparations for the change (look for a new job, consider moving to another state + job, change career if feasible) and not wait until the last minute. Maybe you've been told you're OK for 1 year, but can you trust that verbal promise??
On the other hand, if you keep the house, your day-to-day finances will be extremely tight and might start depleting your $60k savings.
What's your take home $$? I'm afraid you're not even adding anything to your retirement right now, right? So, right now you're spending $420 on prop.tax + house insurance. Then you hope your mortgage payment to be $700 (and that's optimistic, IMHO). So, $1,120/mo. on the house only. What about utilities, groceries? Do you drive a car? If so, gas and its insurance?

I think you should evaluate your situation based on your take home pay, not yearly salary and see where it leaves you, because to me it seems you'll be in red each month and it says you cannot afford to live in such a house you've got.

[anonymous_saver]

I am a 53 year old, about to be divorced woman, working full time with a yearly salary of $40,000, needing to refinance the $110,000 balance left on my 10 year old home (now valued at $550,000). After a 25 year marriage, I will receive no alimony or other income and my current employment situation will end in a year, so I will need to switch jobs or careers, but do not foresee any major change in my income level. I am currently seeking a part-time job to supplement my current salary, but the economy is making it difficult to find something that fits into my schedule.

I have $60,000 in savings and $50,000 in an employer ESOP plan. Because of the current housing market, I plan to stay put for the next few years until the value returns back to the $650,000 range it was at 3 years ago and then use the profit for my retirement. I plan to work another 12 years and do whatever I can to downsize and save so I can sustain my living expenses in the future.

My property taxes are $4,000/year and home insurance is $1,000/year. I have excellent credit and no other debt and have been overly frugal knowing the impact this divorce would place on my lifestyle. When I start paying this mortgage, I will not have much extra each month to place into savings, unless I continue to follow a tight budget that eliminates discretionary items like travel, entertainment, dining out, home improvements, etc.

What’s my best financial move? Go for a 30 yr. conventional mortgage at 5.5% (hopefully) with a monthly payment of $700 or deplete some savings to place towards the reduction of the mortgage balance? I am only beginning to educate myself about financial health and appreciate suggestions from any of you who might be in the same situation.

Thanks much!

I'm sorry about the divorce, hopefully it was the right move though.

I don't think the problem is you making $40,000/year as a single person. That is a decent income! I know it may be very difficult, but I would sell the home as soon as you could legally, and then buy another home outright. This would also help you move on from the relationship, as you wouldn't be thinking, "oh that's where we _______ " all the time. This would be your own new place, and you wouldn't have to worry about the mortgage. Plus, I'm pretty concerned with the amount of savings you have, are you saying you only have $60,000 towards retirement??? If this is the case, then I think you absolutely need to move from this home and start using your extra money to save towards retirement. When do you plan to retire?

I understand loving this home, but it probably has a lot of pain too. I think you could easily hand a $110,000 mortgage without getting another PT job. But that's just me. I still think you need to try to move on and get a new place.

Good luck, I'll look forward to seeing what you decide to do.