My short term future is looking bad financially.
Our family income has been reduced by $25-35k/yr.
$16,000 credit cards
$227,000 on main house (original price 275k) - House value 175k. Foreclosures in the neighborhood $130-150k for similar house. This property is on a 4.5% ARM that will expire at the end of the year. Also we have a second mortgage
$127, 000 on second house - House value 105k. Foreclosures in the neighborhood $60-75k
This property is on a 30 year mortgage and we have a lease-option deal in place(which we lose $200 a month). But the option will not be picked up because of the lowering of the house value.
30k in 401k
10k in a bond
We are going through our second adoption, so we were expecting to have to go in debt on credit cards. We are looking at another 10-12k in debt for adoption.
My job security is iffy, but should know more in the next 3 months. My income could easily increase 10-20k, if the economy improves in Michigan/Automotive.
In 6 months when we have the new baby, I will not be able to make all the payments.
Increase income - second job, doing lease option deals, sell stuff, etc...
Decrease expenses - My car payment will be paid off in two months. Bring lunch, don't go out to eat, reduce food cost, no vacation or entertainment expenses, etc...
Transfer debt to lower percentage credit cards. We both have over 720 FICO scores still.
Look into refinancing the house in a couple months. The senate is looking at 4% loans for people in my situation.
Options if the plan is not enough:
Look into purchasing another house while the credit is still good. Online people are calling this buy and bail. I am not willing to lie to get the new loan, so I may not be able to get a loan. We could borrow some to get a bigger down payment, but the most we could get is 10% without making it look like we got a loan. We would then have to go into foreclosure/bankruptcy.
Go into foreclosure, save as much money as possible. Then buy a house under owner financing/lease option. Would still have to claim bankruptcy.
Consider some kind of short sale.
It is not an option not to do the adoption (the child will be from the same mother as the first adoption). Any advise would be greatly appreciated.