Hi. My name is Angie, and I'm a debtor.
(Hi Angie!)
So, we're in debt, like the other 85% of Americans our age. There's the "easy" temporarily-kill-your-credit solution of debt consolidation, or the not-so-easy snowball solution. For those who have equity in their homes, there's the HELOC (Home Equity Line of Credit). We don't own a house, so that's out. We would like to own one soon, though, so debt consolidation is kind of out (unless we settle on buying land/a house in 4-6 years). Snowballing is not quick or easy.
I've thought a lot about debt consolidation. It potentially lowers the monthly payment by locking interest rates and cutting other magical deals with the lenders. The unfortunate part is that for us, it's probably a 4-5 year fix. In that time we are allowed to have 1 open credit card for emergencies and we are not allowed to take out loans. I know this means small loans, and I wager it means big ones too like houses and/or land.
The rental house we are in is an utter piece of shit and moving into another rental feels like throwing money in a hole. I mean, sure, I don't have to worry about holes in the roof or water in the basement (4" of it, it sucked), but at the same time I could be building equity. The market is soft and it's a good time to buy, right? The problem is we're not technically able to commit to more than we're paying now in rent and that wouldn't cover a proper house with taxes and insurance.
So, in review: we're in debt, which makes it more difficult to get a loan. If we had a house, eventually we could get a HELOC to pay off high-interest debts, but it's difficult to get a house. Because of how much we're paying to credit cards, we can't afford a mortgage payment. And, to lower that quickly we could do debt consolidation...but then we couldn't get a house...
*sigh*
Do we commit to something that makes me supremely uncomfortable for as much as 5 years (no safety net of going to the bank and getting a small loan)? Do we put it off and try for a house anyway? Do we move into a different rental that can be more long term, but where we still can't do any mods and have to worry about what our pets might ruin? Do we try to get some land so we can build our dream house in cob?
I really don't know what to do. I wish I knew the answer.
If I sit too long, I risk lengthening the time we're in debt with "bad" debt (credit cards, not student loans). If I move too hastily, I could put us out of building equity for several years, and might miss the opportunity to buy in a soft market.
Then, if we did go for a house, there's the question of where. I want to move to Mount Vernon because that's where we want to move to build the cob. If we own a home, we can always rent it or sell it when we're done with the cob. It keeps us in a home, where we build equity and potentially stand to make money. If we're in Mount Vernon, it's easier to commit to building on the weekends to the exclusion of anything else (during optimal building season).
However, my friend tells me this evening that there are houses that her in-laws are renting out, brand new, that will be rent-to-buy. That would be nice - something that we could move into fairly quick, and that would essentially be ours. Plus, the rent is close to what we pay now, I'm just not sure how the insurance thing would work since we wouldn't actually own it. They're in Springfield, which is nice, but divorces us from the cob. We'd be committing to building 30 miles away and driving an awful lot.
Ideally I think I would like to buy something in Mount Vernon (or nearby) with an acre or two of land. That would give us space to experiment and ultimately it would be near our build site.
My husband is worried that buying a home would delay or cancel the cob, though, since we would have comfortable quarters. He may be right, but if we were building equity it would make the cob easier to manifest in the future. Once we had $40k in the house we could take it out, no questions asked, and buy our land and fund the project.
I like the last idea best, but I don't really know how to make it work out. I guess I could meditate. I have a hard time with it though, so perhaps I need to just get off my butt and read Chop Wood, Carry Water. It might help!
I suppose that's about it for now. More to come soon, I'm sure.
