I got the last of the paperwork needed for the HUD loan finished up today. The loan repayment would be in the $85.00-$100.00 per month if I could not defer the loan until the house sold. I’m a bit leery about deferring government loans as the compound interest keeps building, that can eat up any profits very quickly. Since I have used my VA loan for this house, I need to sell at a little profit so I can make a 20% down payment via a conventional loan to eliminate any mortgage insurance cost. Worse case scenario on the loan is my payments for the house will be around $500.00 per month. I can afford that loan cost for housing and I’m about 33% monthly debt to income ratio. At best it will take 2-3 months for the paperwork to go through the bowels of government. Perhaps in March-July I might have loan approval for fixing/replacing the roof.
I got good news on my credit score getting bumped up to 760 and above for any loans. It has taken a few years since I got smacked to rock bottom financially speaking when I got disabled. But I have repaired my credit rating without getting credit cards or going into a lot of debt. I got a small revolving credit account at Les Schwab and got a small personal loan via the Credit Union for the fireplace that I paid on time/paid off a little early. I’m living proof you can rebuild your credit rating without resorting to credit cards or expensive (high interest) loans. Speaking for myself, I suck at using credit cards as it is just to easy for me to rationalize using credit because I need something or it is on sale. Well if you you can’t pay off the credit bill every month all of your “savings” will get eaten up in compounding interest payments.
Some folks are great at using credit cards. They pay the bill in full monthly before the interest kicks in, they gain all those “bonus points” and savings. I’m just not that good, as the same idea of getting some thing on sale this month tends to put off paying off the card the next month. If you pay off your card monthly, I say more power to you because I know the credit card companies “hate” you and would much rather have a credit card user like me that buy on sale and then pay the min. payment so the interest builds. If you suck at using credit cards like me (rationalizing) buying on sale or making min. payments. I suggest you stay away from those cards. A Visa or Master Card debit card will do most everything a credit card does, but without going into debt. For me going to cash and not using a debit card while shopping made me save money. I am pretty tight with my shopping money but there seems to be a big difference to me sliding a debit card or breaking a $20.00, $50.00 or $100.00 bill. Debit card spending does not feel quite real to me, but busting a $100.00 is very real and I get immediate feed back of what I have just spent.
I don’t think I am a “Juggernaut” but I can be very relentless in attaining a goal I have set for myself. It may not happen quickly, heck I spent over 18 months waiting for the Kia mini-van to replace the PT cruiser. Over 3 years of planing for installing the wood fireplace. I’m not afraid to spend another year or two here at Casa de Chaos and getting thing fixed up to sell. If the bottom drops out of the real estate market again, at worse I will have a solid home/shelter and a pretty good setup for growing some food to augment my supplies and plenty of water after adding the greenhouses and water cisterns. Plan for the worse and hope for the best is my goal.
Sometimes the best plan is to just sit and not do anything and see how things shake out.