NorCalDad wrote:You mentioned that your wife is losing her job. This is a big factor that changes what I was going to advise. How certain are you that you can still afford your expenses on your income alone and still have money left over?
On paper, yes. I have run the numbers several times and it looks like we will have a monthly surplus of $300-$600, not counting what I am currently saving for retirement. It does make me nervous that I haven't yet actually tested the budget, but I have a really good feel for what we are spending on everything. So I would say I am 90% confident in the numbers I have given.
NorCalDad wrote:Having been in your underwater shoes for a brief period before our housing market took off in the last year, I was going to advise paying down your mortgage because of your high interest rate and to gain peace of mind. However, if you are going down to one income and if there is any possibility it does not make financial sense to stay...
At this point, I would say a short sale is unlikely. At a bare minimum, we should be able to break even and preserve our current savings over the time my wife is unemployed. I know that things change, but my job is pretty secure. And I work in a field where I should be able to find employment fairly quickly if the need arises. We bought this house with every intention of growing old in it, and that desire has not changed. So unless the housing market completely collapses again, it would be really hard for us to just walk away as long as we can make the payments on the house.
From all of the conversations and advice I have been given thus far, I am wondering if a good plan might not be to take whatever I can apply to the principle each month and put it into a separate savings account. Then every 6-mos or so making a lump sum payment toward the mortgage? Does that make sense? Or should I just go all in one way or the other?