Underwater Mortgage - Need Advice

[Slava]

Originally Posted by chemgear

I am unfamiliar with www.moneymentors.ca but professional advice from a credit/financial advisor is a very good idea - hopefully they can provide additional options and ideas that haven't been mentioned here. Sorry to hear about your difficulties but hopefully you can find a reasonable financial path out of it.

Good luck!

Well I'm a financial advisor and I would say that you would want to go to a credit counsellor for the best overall advice in this particular scenario. I know some of the alternatives and things like that a little bit, but its not part of my daily practice (or any financial advisor that I'm aware of).

[Red]

Originally Posted by photon

Ouch, that's nasty. Out here in Chestermere there's a lot of people in similar situations; at the peak 2400sqft 3 bedroom homes were selling for well over $600k.. $700k even, or more if it was a great lot or was in a premium area, but even the run of the mill ones were $650k new.

Now the resale for those homes are $500k and it doesn't seem to be changing much.

I know a number of people that are in the same situation.. some will just live in their places (or rent them out) until resale gets back, or some have sold and ate the $150k loss.

Similar situation too, new build (as opposed to a resale) and in an outlying community.

Airdrie is in the same boat.

[AMG_G]

It's only going to get worse as interest rates creep back up and expenses like property tax, gas, food, etc get more expensive. True Alberta has some of the highest wages and that might be the only thing keeping this from exploding to smithereens. I know realatives who took 75-100k loss for their place just to be in a bigger house with a bigger mortgage...like seriously really? Who here can honestly say they can take 100k loss without consequences some point in the future. These relatives have 3 kids under 10 and not a dime in RESP. Giving my kids the opportunity to get a good education without the 100k debt after is worth a lot more to them then a bigger house. I don't know how they can sleep with 550k mortgage, leased car payments and living pay check to pay check.

This market is on the brink of collapsing like dominos because almost everyone I know has a home and one or more rental property bought with downpayment from their heloc.

[DuffMan]

average down. lowball offer 100k on 3 or 4 other units, rent them out, and then if the market goes up some you could sell for profit on those.

[Travis Munroe]

Originally Posted by squiggs96

Travis, this is exactly why people should consider a mortgage debt. I'm not sure why you're getting upset at me for it. It was your statement, poll and position. My comment, while in jest, was on topic, and brought back the thread where this was debated.

For the OP, I'd take a look at what you can do going forward. The purchase price is irrelevant and is a sunk cost. It's the same about owning a stock that you bought at $40 per share and is now at $20 per share. It doesn't matter that you lost half of it, but what's the best step to gaining the most money out of what you currently hold. You are going to have to bring money to the table to get out of the mortgage at some point. If you can afford the $135,000 hit now, it may be beneficial to sell. You'd be mortgage free and would still have good credit.

If you can stand living there and can afford your mortgage, the purchase price and mortgage amount don't matter that much. You only lose or make money on a sale when the sale closes. If my house went up by $200,000, that doesn't mean anything to me, as I still need a place to live. If it went down $200,000, same thing. It's only a problem if you can't afford your payments or you are nearing retirement age and are trying to cash out. It doesn't sound like you are in either case.

I just felt that the umpteenth pages of discussion brought out a agreement by most as stated by blankall right below your last post.
My wording came across wrong in the first post and by the time I had a chance to stand by my point but word it properly, it was too late and we had all of us CP'ers for the most part debating the exact same thing.

[stacey]

Originally Posted by AMG_G

It's only going to get worse as interest rates creep back up and expenses like property tax, gas, food, etc get more expensive. True Alberta has some of the highest wages and that might be the only thing keeping this from exploding to smithereens. I know realatives who took 75-100k loss for their place just to be in a bigger house with a bigger mortgage...like seriously really? Who here can honestly say they can take 100k loss without consequences some point in the future. These relatives have 3 kids under 10 and not a dime in RESP. Giving my kids the opportunity to get a good education without the 100k debt after is worth a lot more to them then a bigger house. I don't know how they can sleep with 550k mortgage, leased car payments and living pay check to pay check.

This market is on the brink of collapsing like dominos because almost everyone I know has a home and one or more rental property bought with downpayment from their heloc.

Your not the only one who thinks this way, this site has been talking about it for a while.

Alberta Bubble Blog:

http://albertabubbleblog.blogspot.ca...&max-results=5

[Bill Bumface]

Originally Posted by AMG_G

These relatives have 3 kids under 10 and not a dime in RESP. Giving my kids the opportunity to get a good education without the 100k debt after is worth a lot more to them then a bigger house.

I agree with most of your post, but RESP? Screw that. School is cheap in Canada. Kids can get a job and learn what it is like to pay for something instead of having it handed to them, maybe avoiding future money mismanagement.

If you let your kids live at home while they go to school it isn't very hard to graduate debt free. I'm proud of paying my own way through school, and I'm the one that reaped the rewards of going, so why shouldn't I pay? I don't care how much money I have, I'm making the little pukes pay. No free cars, no free school, they will learn like dad that you don't just ask for money and get it, and your problems go away. You have to earn it before you spend it.

[albertGQ]

^^^
I also paid my own way through university but as a parent, if you're able to help out your kids via an RESP (which the gov't matches 20%), why wouldn't you.

Yes, kids should learn the value of money and paying their own way through school is a great way. But if I can take some of the financial pressures off my sons while they get a university degree, you bet I will

[Boblobla]

Originally Posted by hulkrogan

I agree with most of your post, but RESP? Screw that. School is cheap in Canada. Kids can get a job and learn what it is like to pay for something instead of having it handed to them, maybe avoiding future money mismanagement.

If you let your kids live at home while they go to school it isn't very hard to graduate debt free. I'm proud of paying my own way through school, and I'm the one that reaped the rewards of going, so why shouldn't I pay? I don't care how much money I have, I'm making the little pukes pay. No free cars, no free school, they will learn like dad that you don't just ask for money and get it, and your problems go away. You have to earn it before you spend it.

I am hoping my kids GTFO of the house by the time they are 18 tbqh. I would also like them to go to a better school than the U of C...

[Lt.Spears]

Is there any reason you cant stay there longer?

Are you being forced to leave?

Chances are your best financial move is to stay put and hope prices return to the levels they were when you bought, then sell then and move on. Might suck for 2-3 years but getting out of the mortgage/condo now would be very very very difficult.

[Sliver]

Originally Posted by hulkrogan

I agree with most of your post, but RESP? Screw that. School is cheap in Canada. Kids can get a job and learn what it is like to pay for something instead of having it handed to them, maybe avoiding future money mismanagement.

If you let your kids live at home while they go to school it isn't very hard to graduate debt free. I'm proud of paying my own way through school, and I'm the one that reaped the rewards of going, so why shouldn't I pay? I don't care how much money I have, I'm making the little pukes pay. No free cars, no free school, they will learn like dad that you don't just ask for money and get it, and your problems go away. You have to earn it before you spend it.

Probably the best lesson you could teach them, then, would be to put the minimum amount of money in an RRSP to get the maximum government contribution. Never say no to free money.

[Bill Bumface]

I didn't realize the government matched on RESPs (my parents were poor).

My friend who's parents had saved up money for his school had a neat system. I believe he paid his own way, and once it was said and done his parents paid him back for his school, said good job, you learned some lessons but this will help you buy your first place. That guy is also coincidentally super smart with his money now and was mortgage free before many of our friends had their first place.

[Sliver]

Originally Posted by hulkrogan

I didn't realize the government matched on RESPs (my parents were poor).

My friend who's parents had saved up money for his school had a neat system. I believe he paid his own way, and once it was said and done his parents paid him back for his school, said good job, you learned some lessons but this will help you buy your first place. That guy is also coincidentally super smart with his money now and was mortgage free before many of our friends had their first place.

That's a cool system.

[Lego Man]

Originally Posted by hulkrogan

I didn't realize the government matched on RESPs (my parents were poor).

My friend who's parents had saved up money for his school had a neat system. I believe he paid his own way, and once it was said and done his parents paid him back for his school, said good job, you learned some lessons but this will help you buy your first place. That guy is also coincidentally super smart with his money now and was mortgage free before many of our friends had their first place.

This is literally exactly what I will do with my children. And no, University isn't "cheap" in Canada. At least not compared to other first world nations where post-secondary education is paid for by the state.

[Rathji]

Originally Posted by fotze

I don't know anything about bankrupcy. Why can't you walk away from a mortgage here?

Also with bankrupcy, can you just declare it or do you have to get rid of your other asssets first like savings or RRSP's?

Savings and RESP/RRSP do get put into the bankruptcy, so do you lose them or a portion at least.

On the flip side, if you declared bankruptcy but didn't want to lose your house/car/etc that you had outstanding debt on, I am pretty sure you don't need to include that particular debt.

[Rathji]

Originally Posted by Table 5

What the hell happened in High River to jack prices up so high? And then what the hell happened to make them dive so much so fast? I wouldn't have thought there was any place in Canada that would fall so drastically. That's Phoenix level diving.

My guess is that is partially related to Cargill Foods not bringing in as many immigrant workers from the Philippines as they were during the boom. Combine that with high River not looking so attractive for people who would need to commute to the city since housing costs in the city have dropped as well.

[VladtheImpaler]

Originally Posted by hulkrogan

I didn't realize the government matched on RESPs (my parents were poor).

My friend who's parents had saved up money for his school had a neat system. I believe he paid his own way, and once it was said and done his parents paid him back for his school, said good job, you learned some lessons but this will help you buy your first place. That guy is also coincidentally super smart with his money now and was mortgage free before many of our friends had their first place.

Unfortunately, I don't think there is a way to withhold RESP money until after. Slava or Money Guy can correct me...

[Bill Bumface]

Originally Posted by VladtheImpaler

Unfortunately, I don't think there is a way to withhold RESP money until after. Slava or Money Guy can correct me...

I guess now you pay for your kids school, but make them pay you the same amount and hold it in trust for them. Not quite the same, but could still work.

[Bill Bumface]

Originally Posted by mpaca

And no, University isn't "cheap" in Canada.

I can't stand tuition whiners. My forced SU contributions paying for a bus to go up to Edmonton to party and complain about tuition really ground my gears.

Tuition IS cheap. 6 months of work after school to make as much as school cost you is great ROI. You get 40 years to work, of which 0.5 years pays back what got your foot in the door to that 40 years of work.

You can get a summer job each year and pay off your tuition and graduate debt free.

Cheap cheap cheap.

[undercoverbrother]

Originally Posted by hulkrogan

I can't stand tuition whiners. My forced SU contributions paying for a bus to go up to Edmonton to party and complain about tuition really ground my gears.

Tuition IS cheap. 6 months of work after school to make as much as school cost you is great ROI. You get 40 years to work, of which 0.5 years pays back what got your foot in the door to that 40 years of work.

You can get a summer job each year and pay off your tuition and graduate debt free.

Cheap cheap cheap.

agree completely, I worked hard every summer to make money for school, did I also get loans yep, have I paid them off yep.