The value of my house
I guess I started thinking about this all because my neighbor is moving out this weekend due to foreclosure. They had an adjustable rate mortgage which doubled so they haven't paid their mortgage in a year. I feel bad that they didn't make better choices. It must be horrible to have to leave your home. |
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| Sounds similar to one of my BIL/SIL's (one of Todd's brothers and his wife). They were career air force and Scott retired about 5+ years ago. They had owned a home in AK, and lived in off-base private homes most of their 20 years. When they got out, they bought their dream home here in MN, not too far from Tammy's parents. They bought a large 4 bedroom, 3 bath newer rural home on a scenic river not far from town. But - they bought when property values were sky high. Scott gets military retirement, plus worked FT at a related civilian job - then he got laid off. Had to take a job in Ohio, now is in Rapid City SD. They are trying to sell their house, so they both can live together (their 4 daughters are now grown, oldest 3 married, youngest in college.) It isn't selling at the price they want, or even with taking a $$ loss on it. Of course it doesn't help it shows like crap now. Tammy is into country- stuffed bears, geese, collector tins, painted country blue and mauve....ughh! They can't afford 2 households, so things are getting bad.  |
| Go to several mortgage BROKERS not just banks. I don't know your particulars, but there are still government mortgages available with very small equity percentage requirements. Besides, their rates are almost always better than banks. On Thursday I was quoted 4.25% with $500 in closing costs, 4.00% with $3,000 in closing costs (that's less than 1 point in my case). That was based on >25% equity though. |
| I am in the same boat. I bought my house when prices were sky high. Because of the economy, so many homes in the neighborhood have been foreclosed. I asked about refinancing and was told the same thing. My value of my house is about $80,000 less than the mortgage. When you find a solution, please post! |
| As of right now, my house is worth about $17K more than the mortgage. The value is based on recently sold comps. The bank said I could get a refi IF I took out privae mortgage insurance (PMI) but then my monthly payment wouldn't be whole lot different. I'm very lucky that things are going well for me now. |
| We bought our house 22 years ago, and paid the fancy out of towner dumbbell price, but still so much less than what this would have sold for in MI that we felt we got a bargain. And mostly we did: very nicely sized house in an extremely convenient location that allows my husband to walk to work and the kids, when they were home could walk to school, parks, library, friends, movie theater, etc. When I worked in town, I could walk to work, too, if the weather wasn't too bad but ended up driving more often as I usually did errands to/from work or on lunch..... It's an old victorian and we live in a victorian town which does not value the victorian beauties it has so I know our house will never sell for what anyone outside of our area would think it is worth. That said: last summer, we did a massive kitchen renovation, gutting EVERYTHING, including floor and ugly dropped ceiling, and giving the house the kitchen it deserves instead of the muddled ugly ill designed mess it was for probably 40-50 years. A year ago, also replaced furnace/air conditioning, and updated electric panel. Over the last 12 months, I've dumped a LOT of money into my house. I know I will never see it when I sell in... 10-15 years or so. Or longer, depending on how things go. I am mostly ok with that. We enjoy the improvements we made and hope to make more in a year or so. However: Unless they re-route the bridge closer to my house in which case our house will become unlivable and then, it will be hard times indeed. I never was a big believer in buying/selling houses just to make a quick profit but at this point, I really can't stand to walk away with no money when I sell down the road. So: crossing my fingers that they don't do the stupid thing (there are a lot of people in this boat in our town). We are lucky: both of us have good, steady jobs with good (hubby) to decent (my) paychecks and benefits. That should stay the same for the next 10+ years, if we want it to. Probably will need to since that lottery thing does not seem to be working out so well. |
| Paula, on your refiance, how long until your PMI is no longer required? We are looking at getting a lakehouse, with 10% down and a 10 year mortgage. So we would have to get PMI for just over a year, then could drop it. So if the PMI is just short-term, it may be worth it to refi. |
| My condo is estimated at $135(ish)K. I owe $115K. I would have to owe less $106K to drop PMI so I would have to carry the PMI for about another 5 years. So it really wouldn't save me any money. |
| REFINANCE AND PAY THE PMI, then get a home equity loan for 5 years (fixed rate, if possible) for 10 grand and pay down the first note, getting rid of the PMI. The the extra payments to the equity line go into your own pocket instead of the pmi company. |
Paula O. wrote: I guess I started thinking about this all because my neighbor is moving out this weekend due to foreclosure. They had an adjustable rate mortgage which doubled so they haven't paid their mortgage in a year. I feel bad that they didn't make better choices. It must be horrible to have to leave your home. I live in a nice area, everyone keep their homes and landscaping in good shape. The man behind me inherited his house, got it free and clear of any mortgage and owed nothing. He had a low paying job and somehow secured equity loans and eventually lost the home to foreclosure - someone bought it before it hit the courthouse steps and has brought it back to par making vast improvements. it is beyond my imagination how anyone who rec'd something free could let it go; if he didn't want the house he should have sold it immediately and made some good money. If he stayed much longer his house would have fallen down as he did not take care of it at all. I am at a complete loss why anyone would let the most valuable asset we have in our lifetime fall into the ground. |
Ron wrote: REFINANCE AND PAY THE PMI, then get a home equity loan for 5 years (fixed rate, if possible) for 10 grand and pay down the first note, getting rid of the PMI. The the extra payments to the equity line go into your own pocket instead of the pmi company. A good mortgage broker might even be able to help you set this up at closing obviating the need for PMI at all. |
Hey Everyone! Unfortunately, in this day and age, everyone's circumstances are different and what's right for one isn't right for another unlike a few years back when everyone could get a mortgage under almost any circumstance!!!  My DH and I wanted to sell our townhome 2 years into our marriage, which will be this May, BUT, due to this "Crisis" it looks like we'll be in our home for another 5+ years unless things start getting a bit better.With that being said, there are soooo many programs out there for people that don't want PMI or are trying to get rid of PMI or owe more than their home is worth. Puh-lease make sure you're looking into all options. What one bank/investor/etc can't do another may be able to! On another note: Both my DH and I are in the mortgage industry. We're not commission based so this is NOT AN ADVERTISEMENT!  If you need ANY help at all please feel free to PM me with any questions. -Kate |
| Kate, what are the frontend and backend ratios in use these days by conforming mortgages of various types? If I recall correctly, it used to be 28%/33% but when I look on the web I find 28/33, 28/33-36, 38/46 and a few others. Can you help me understand what is going on nowadays? Thanks!!! |
Not my area of expertise (go figure  ) but I did ask my husband and here was his response...Fannie will not approve over 45% back end. Freddie will not approve over 50% back end That sounds about right... |
New OES Mama wrote: Not my area of expertise (go figure ) but I did ask my husband and here was his response...Fannie will not approve over 45% back end. Freddie will not approve over 50% back end That sounds about right... Aren't Fannie and Freddie the companies that got so many people into trouble? Those companies still exist? I don't really understand the system you have in the U.S., but it breaks my heart to think of so many people losing their homes. |
Mady wrote: Aren't Fannie and Freddie the companies that got so many people into trouble? Those companies still exist? I don't really understand the system you have in the U.S., but it breaks my heart to think of so many people losing their homes. As I understand it...Fannie and Freddie are the secondary mortgage market. They buy the loans from those that gave them to homebuyers. It is banks and mortgage companies that initially were handing out money left and right. Then F/F bought them. Then when the market tanked they were left with all of these loans. I'm sure any mortgage experts here know more and could explain better. |
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