Lindy, can your family actually afford this home? Here is my definition of “afford”, which by the way used to be the standard. Calculate the monthly payments when financing the home with 20% down, and an 80% fixed-rate 30 year mortgage. (If you do not have a 20% down payment, or at the very least a 10% down with a 10% second, you cannot afford the home.) If the monthly payments with this financing are less than 1/3 of your gross (before-tax) income, you can afford the home. Otherwise you can’t. If you can’t afford the home, you should sell it. It’s that simple. Painful, but simple. Some would probably argue with me, saying “I bought my home in 1999 and I put 0% or 5% down, I can afford my home!” That may be true in 2007, but those people are also very lucky and got to ride a huge wave of appreciation that has already stopped.
Best of luck to you and your family, I hope everything works out well for you…
