My wife just lost her job. We have 2 kids and we bought a home 1 years back, I’m freaking out seeing all the layoffs news. Being impacted through my wife created more chaos. We are on green card, and the market is not encouraging to find a new job. Should I sell the home? We have only 3 months of emergency funds. TC: 182K YOE: 4 Bay Area Given the situation, should I:
This is why Total Compensation means nothing. I need cash compensation; money talks.
Stocks can be sold as soon as you get them and bonus is all cash generally. TC is not meaningless. Paper money is meaningless.
Don’t freak out. You are on GC so you don’t have to leave the country. Control your expenses and save for rainy day if it ever happens. I am on the same boat (H1b), but I have emergency funds to keep paying mortgage for a year in case I have to leave US for a bit
Funny u can’t stay more than 60 days without job
He meant if he has to leave US, he can still keep paying mortgage for a year before he can come back to US.
I’d brace for impact while remembering this will be overturned soon too. Question is how soon. If you can afford, slide into wait mode for buying/selling house. Your wife hopefully has not stopped planning for next opportunity. Even if bear market, there will be jobs. Part time, contractor ones if not full time. This is a rough patch and this will pass. I did job hunting during Lehman shock and let me tell you it was not fun at all. I was in fin then! I had so many heart breaks and dead walls and of course longer unemployment streak than a normal market. However, I feel so strong about going through another rough patch now because of that experience. My personal POV is once the governments stop the damn war and solve the supply side, this imposed inflation will start easing. And that will happen tomorrow or day after tomorrow. So the light at the end of the tunnel will be visible, hopefully not much longer after. Hopefully you can ride the waves.
War can go on for years and even escalate to a bigger conflict. The recession has no even begun, it's going to take 2-4 years to short the insane overspending out. The extent of the problem is magnitudes larger than the last crisis and the last crisis was pretty bad. If inflation drops that doesn't mean the cost of living will decrease or that they will be able to drop rates aggressively without inflation coming back. Finally it has always required really high rates to bring inflation down. There is way more downside in the short term here
+1 to Meta. Was in fin and same situation in 2008 crises. It was brutal, and yet here I am 12 years later. Hope you are not house poor and you can pay EMI with one salary. This is not an output problem. It is an interest rate problem. You have a locked low rate for 5+ years. Keep the house if this is where you want to live for 10 years. If you bought it to flip well flip now because prices are not going to increase in the next 12-24 months maybe longer
Foreclosure is not the end of the world. You and the bank entered an entrepreneurial business arrangement. it’s no different then funding a startup. The bank took a risk that there wouldn’t be a slowdown and you’d keep your job. The bank made a poor bet. It doesn’t reflect any more poorly on you than it does the bank.
It does not impact the banks credit score but impacts yours ..
What about short sale instead of foreclosure?
Hang in there. You still have a job. You may need to live paycheck to paycheck for a while, but it's gonna be okay in long run.
How much equity do you have in the house? You can always get a home equity loan. Depending on the mortgage rate you’ve got locked in, it will prob be a last resort though as it will mess up your mortgage rate. You can also rent out your house and move to a smaller place, if rent can cover mortgage. A lot of things you can do before having to rush sell the house. Keep calm and be supportive, hopefully your wife will find a job soon. When you are both employed again, save more for a rainy day.
It’s bad advice to tell op to take a heloc when he is only has enough savings to pay his mortgage for 3 months. Taking on kore debt when you are unable to service your current obligations is a sure fire way to financial ruin. Your other suggestion about renting a portion of the house out for extra cash flow is spot on.
PagerDaddy is right. If you need another loan, it is better to sell
Selling your house in this market will not make sense. You still have a job so you have revenue coming in. Just focus on finding a job for your wife.
Maybe is a good idea for your wife to get any type of work. Even if it just pays $2k/month to cover some of your expenses. That is money that you are saving until the situation improves
This is not sound financial advice, but a good career advice for Bay Area. His wife making 2k/month while they pay 3k+/month is not only a bad financial decision, but also adds additional stress of keeping a low paying job with no upside. She is better of taking things easy and reduce day care hours. The only reason to keep a job is if she is scared of getting sidelined and out of touch with workforce.
Why and how did she loose her job?
Sell what? Stock? House? Sorry to hear but do you have emergency fund?