Debt and Savings Goals

I have been struggling with debt since divorcing about 7 years ago. Short version is I got shafted, which I think is fairly common. I lost the house we owned and got a pittance as my share -about enough to clear marital debt. I have three kids and am now renting a (different) house that I owned briefly before marrying.  Anyway: that’s in the past,  though it is essential background.

I’m in a tight spot because, at 60, I have maybe 6, 8 years til retirement, when I will have to live on about 65% of my current gross. And if I do not own a house by then I really cannot see how I can get by. Honestly. I’ll get a lump sum that I could use to pay a big chunk on a house, but need a deposit soon or the opportunity will pass.

The problem is I cannot seem to save enough for a deposit, and instead struggle to stay in the black every month. I live a very modest life -about $220/mo. in USD for spending money.  I drive a car that is now 15 years old. My only real debt is $7k or so left over from expenses related to my daughters wedding last fall. But how do I pay that down and try to put a house deposit together at the same time? I have been trying, and take inspiration from all these stories of folks who have paid down huge debt w YNAB, but I cannot seem to make it work, and it’s frustrating.

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  • Have you considered adjusting your expectations - do you need a whole house? why not a condo?

    Does it make sense to take on a 30-year debt in your mid to late 60s? And in your retirement years do you want to take on the burdens of ownership? As a renter, especially of say an apartment in a managed building, it's the landlord's job to deal with toilets that won't stop running or outside maintenance, etc.

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      • Farset
      • beal
      • 11 mths ago
      • Reported - view

      jenmas Thanks, and both good questions. If it were just me, I’d live in a studio or a decent one bedroom flat. But my children are 14, 12 and 9, so I need accommodation for them for now at least. I live in a modest 3 br terraced house, and could not live in anything smaller until my kids are independent, which will probably be after my retirement. Also, I’d be happy renting something modest, but if I’m still paying rent at the level I’m paying now (and it’s not exorbitant)  my pension will not leave me very much at all. That is why I am trying to scramble to get into a place of my own, and to pay it off ASAP. I would aim for a 12-15 year mortgage.

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  • Are there any programs in your community that help people become homeowners? In my state, there is

    -county agencies that will offer advice on home ownership options & help figuring out what you need to re repaying debt, saving for deposit, qualifying for assistance programs or different types of mortgages

    -a program that offers down payment assistance up to a certain income level depending on the part of the state & whether it was a no payments or interest until the 1st mortgage was paid off or not, 

    -similar programs at the county & city level in some communities

    -assistance from Habitat for Humanity in getting a loan for an existing property (lower max income than the state program, but higher than when they build)

    -some communities are looking into setting up community land grants where the community invests in a portion of the mortgage to bring the cost to the owner down, with restrictions on reselling (I believe the HfH program is similar)

    And that's just what I found when I was looking to buy my house. Other places probably have at least some forms of help available as well.

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      • Farset
      • beal
      • 11 mths ago
      • Reported - view

      adriana01 Thanks for the suggestions Adriana. There is something here called co-ownership, where you are only paying say, 40% of the mortgage and the bank pays the rest. I am eligible and am trying to go that route, with the aim of getting myself in the door and then paying the other 60% with a lump sum from the pension at retirement. But I’ve found that sellers are reluctant to go that route, partly bc it involves a more meticulous survey of the property and also because it can take longer than straightforward sale.

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