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Question for the Money Doctors

Question submitted on Dec 10, 2011.

Question

Bought a townhouse in 2007 currently owe $10,000 more than what it''s worth. Builder went bankrupt, flaws were found, HOA tried to sue builder but couldn''t. HOA was $150, is now $350 or $14,000. I am 56, want to retire at 65 and don''t plan on retiring here. What should I do?

Answer

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Obviously I don't know the extent of the flaws you mentioned. Let's assume they are not material structural defects. In that case, I would recommend biding your time, continuing to make your mortgage payment and waiting for the market to come back which we all hope will happen by the time you reach your retirement age of 65. Then you should be able to use the equity from the pay down of the mortgage, combined with equity from market appreciation to find the home you're looking for in your retirement destination.


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