When is enough enough? (mortgage thread)

[HeXen]

I just love it when people say "in my area" and don't say where they live. If you live in rural West Virginia, I don't care how much house you can get for $262k.

no point in saying cause it does not matter unless you happen to live in the area i am, in which case you would already know such things. and its not a rural area, though costs are the same in both urban and rural around here, i also could care less how much houses are in rural west virgina as i'm no where near there.

 

[Azurik]

Maybe we can abolish usery as well.

Interest is helpful in that it allows someone who doesn't have enough money to purchase something they can pay over time, and lenders get an incentive because they profit from it. It forms a business.

Interest is not what is wrong with this country. It's the people abusing our system (on both sides). Lenders who let borrowers borrow more than they should allow and borrowers are irresponsible.

It's not meant as a risk buffer just because a borrower's equity declined. I buy a stock on margin with interest and now the stock is worthless. Do I still owe the borrowed money? Of course I do. Interest charged is not equivalent to buying a put option on a stock, where one actually does have a right to sell a losing bet and salvage their principle.

 

[tfinch2]

Maybe we can abolish usery as well.

Usury?

Edit: Not trying to come off as a jackass here.

 

[Azurik]

Usury?

Edit: Not trying to come off as a jackass here.

It's another name for interest.

 

[Bignate603]

So you chose to buy a house that wasn't really the kind of house you wanted, the market fell, and now you want to jump into a bigger house (which is probably significantly cheaper than when you bought) but you don't want to pay for your bad choice?

Sorry, but if you made a killing on the house above and beyond what the bank made off you they wouldn't be crying and asking you to share your profit. You made a poor choice, it didn't pan out. Live with it.

 

[tfinch2]

It's another name for interest.

I get that. Was confused with "usery".

 

[alkemyst]

So why do you have a high APR if you have a fixed loan?

in 2006 6.6% wasn't so bad.

 

[DaWhim]

The only thing you did wrong was putting down 20% on the house to avoid the PMI. think about if you went with 100% and PMI.....

well, consider that 20% down as a sunk cost. now you may want to walk away from it.

oh....do not keep money with the bank where you keep your mortgage. why do you want your bank to know all your assets?

move again your money (maybe purchase treasury bonds), then skip a few payment. next time you call up chase, tell them you have lost your job and would like to see if you can get a principle reduction. you need to let the bank knows they have a problem, not you.

for anyone that said the whole thing cause by greedy bankers and borrowers, I would like to recommend this book by Thomas Sowell http://www.amazon.com/Housing-Boom-B...9748248&sr=8-6

It was caused by the government. if they didn't force lenders to loose the lending standard and fuel it by interest expenses deduction, things wouldn't be the same.

 

[Aimster]

My friend was in the same situation as you..

What he did was buy another house for dirt cheap. Bought a car.
Stopped making payments on his old townhouse. It's in the process of a short-sale.

he doesn't care about his credit. He knows it'll take a hit but you can work your way back up eventually. Plus he already has a house and a car. Doesnt need credit really.

I would consider buying another house and short selling

 

[alkemyst]

if a bank did come after you, you could declare some sort of bankruptcy.

Unfortunately the great American ability to declare bankruptcy has had it's nuts cut off unless you are wealthy.

Most middle class people or below will have a Chapter 7 as an impossibility due to the means test now instituted and end up in Chapter 13 which really fucks anyone that can pay off most of their debts in 5 years struggling to do so...whether or not that 'debt' is financially worthy.

Upper class folks usually have a few businesses to tack on so they end up in 7/11 easy.

Bankruptcy used to be a very powerful solution in this country...in the 80's lawyers abused the fuck out of it and the people voted to change it. They fucked themselves ultimately.

 

[KillerCharlie]

Wouldn't that be great if in the stock market you could only gain money and never lose it?

 

[alkemyst]

Housing in america is not the stock market. Most of these people are lucky to even have retirement money.

Others are thinking everyone was a speculator and looking to flip their homes.

 

[AlienCraft]

That's the function of modern real estate lending: take money from one group and give it to another based on arbitrary criteria.

Fixed it for you. Closing costs and assorted bullshit fees above and beyond the price, make my point.

 

[AlienCraft]

Unfortunately the great American ability to declare bankruptcy has had it's nuts cut off unless you are wealthy.

Most middle class people or below will have a Chapter 7 as an impossibility due to the means test now instituted and end up in Chapter 13 which really fucks anyone that can pay off most of their debts in 5 years struggling to do so...whether or not that 'debt' is financially worthy.

Upper class folks usually have a few businesses to tack on so they end up in 7/11 easy.

Bankruptcy used to be a very powerful solution in this country...in the 80's lawyers abused the fuck out of it and theFinancial Lobby people voted to change it. They fucked the average citizen's ability to file appropriately ultimately.

Fixed it for you, too. We never voted on that, that was a done deal in a back room.
It appears that the Business side of the citizenry has more,better justice than the Human side.

 

[mrCide]

An update for anyone who cares:

I've basically decided to pursue attempting to buy a second home to move into as a primary residence and rent my current one out at a loss. Spoke to a broker who said I'd qualify for an FHA with 3% down (on a place that's approx $200k as a filler number) if I was to pay off my car loan (which is possible) and rent out my place / lease written / proof of payment, which is more difficult. It means I have to uproot myself twice, but is it worth all the hassle?

For that price and the current rates I could probably get into a decent single family home and away from the townhouse, maintain my current costs if not add a couple hundred a month, and have 2 properties. Going to continue researching this option. Biggest hurdle is uprooting myself twice and finding a renter -- really have no clue how that process works at the moment.