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They can sell the asset, pay off the balance, downsize to a smaller house for a smaller debt or a low rent accommodation. Save money and earn the interest on it

by dudus 6y ago

They can sell the asset, pay off the balance, downsize to a smaller house for a smaller debt or a low rent accommodation. Save money and earn the interest on it, probably invest in the stock market now that it's in a downturn and start saving money. Once they have a better egg they can put back into a property if they wish, hopefully with the help of a smaller loan they can actually pay.

mrscottson 6y ago
Good ideas except they should not invest in the stock market, there is no guarantee that we hit the bottom even though many would like to believe so. Better to put that money in gold or other similarly scarce assets.
jacurtis 6y ago
Minus the stock market idea, this is good advice. If your parents took the second mortgage out in 2013 (7 years ago) and then rode one of the largest housing booms we have ever seen, and are STILL underwater, then there's something really wrong. Either the house is not sellable, or something. If instead, OC means that they can't keep up with the payments on the home, then that would mean the solution is simply to downsize to something that they can afford. Sell the house, pay off the mortgages, and move into a rental that is within their means. The only reason that I say that the stock market is a bad idea is that if their parents can't manage the personal finances of a simple mortgage, then making intelligent decisions in the stock market is probably not a good option for them. I am not calling them stupid, but I am just saying that investing in the stock market intelligently is multiple magnitudes more complicated than managing your mortgage. Countless studies have shown that when laymen invest in the stock market, they usually underperform the index funds. Yes, the stock market is down right now, which is the time to buy. But just throwing money at it, simply because it is down is far from a good decision either. Some stocks right now will likely not recover for a decade or longer and many will file bankruptcy. Some will profit wildly. The stock market is going to be very volatile, which means POTENTIAL for huge gains. But unless you are making these decision with absolute care and awareness to hide possible losses, you are essentially treating it like a lottery.

by dudus 6y ago

mrscottson 6y ago

Good ideas except they should not invest in the stock market, there is no guarantee that we hit the bottom even though many would like to believe so. Better to put that money in gold or other similarly scarce assets.

jacurtis 6y ago

Minus the stock market idea, this is good advice. If your parents took the second mortgage out in 2013 (7 years ago) and then rode one of the largest housing booms we have ever seen, and are STILL underwater, then there's something really wrong. Either the house is not sellable, or something. If instead, OC means that they can't keep up with the payments on the home, then that would mean the solution is simply to downsize to something that they can afford. Sell the house, pay off the mortgages, and move into a rental that is within their means. The only reason that I say that the stock market is a bad idea is that if their parents can't manage the personal finances of a simple mortgage, then making intelligent decisions in the stock market is probably not a good option for them. I am not calling them stupid, but I am just saying that investing in the stock market intelligently is multiple magnitudes more complicated than managing your mortgage. Countless studies have shown that when laymen invest in the stock market, they usually underperform the index funds. Yes, the stock market is down right now, which is the time to buy. But just throwing money at it, simply because it is down is far from a good decision either. Some stocks right now will likely not recover for a decade or longer and many will file bankruptcy. Some will profit wildly. The stock market is going to be very volatile, which means POTENTIAL for huge gains. But unless you are making these decision with absolute care and awareness to hide possible losses, you are essentially treating it like a lottery.