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Phoenix wrote:
It’s not just the ARM.
People who would not have been able to afford a mortgage bought into Intrest Only Loans. Problem was that they would have to negotiate the interest rate in 3-5 years. So while three years ago the interest rates were 5%, they went up to 6-7%. So here in the Bay Area especially, payments were going up 500-1000 or more. Plus, houses that were bought three years ago held the same value. So not only did the mortgage go up, there is no equity.
While I do feel bad, I personally don’t think the government should be involved with a bailout. Here, the market price is inflated. All the forclosures are going to even things up a bit.
The old rule of thumb about you can afford 3X your annual income is being put back into play. This means the loan companies won’t be giving the fantastic and unrealistic loans and the housing will become more affordable.AMEN! I agree! The housing market needs to come back into check. Things are way out of control. I do think that the government needs to force lenders to make sure buyers understand the terms of the loan. I totally agree about interest only loans. They are as bad as ARM loans and to me they don’t make sense.
I consider my house as part of my retirement. I dealt with my loan as carefully as I would deal with my 401k. I want this baby paid off before I retire. Then I know I won’t have to pay rent or a note once I decide to retire 🙂
keschete wrote:Phoenix wrote:It’s not just the ARM.
People who would not have been able to afford a mortgage bought into Intrest Only Loans. Problem was that they would have to negotiate the interest rate in 3-5 years. So while three years ago the interest rates were 5%, they went up to 6-7%. So here in the Bay Area especially, payments were going up 500-1000 or more. Plus, houses that were bought three years ago held the same value. So not only did the mortgage go up, there is no equity.
While I do feel bad, I personally don’t think the government should be involved with a bailout. Here, the market price is inflated. All the forclosures are going to even things up a bit.
The old rule of thumb about you can afford 3X your annual income is being put back into play. This means the loan companies won’t be giving the fantastic and unrealistic loans and the housing will become more affordable.AMEN! I agree! The housing market needs to come back into check. Things are way out of control. I do think that the government needs to force lenders to make sure buyers understand the terms of the loan. I totally agree about interest only loans. They are as bad as ARM loans and to me they don’t make sense.
I consider my house as part of my retirement. I dealt with my loan as carefully as I would deal with my 401k. I want this baby paid off before I retire. Then I know I won’t have to pay rent or a note once I decide to retire 🙂
Can’t say that I agree on government intervention at this point. People should exercise some common sense, read the fine print and ask a buttload of questions if they aren’t sure. If they’re confused and they feel their lender isn’t helping them, they need to find someone who knows and they can trust to ask.
People don’t have to be rocket scientists, but they should accept responsibility for their own lack of research and forethought if there are no other extenuating circumstances.
That being said, I’m not paying much attention to the housing market right now since everybody I know either rents or owns their house (we’re from a small, rural area). You can bet your yearly salary I’ll be paying close attention to how things work when the time comes for me to buy, though.
Rusti wrote:keschete wrote:Phoenix wrote:It’s not just the ARM.
People who would not have been able to afford a mortgage bought into Intrest Only Loans. Problem was that they would have to negotiate the interest rate in 3-5 years. So while three years ago the interest rates were 5%, they went up to 6-7%. So here in the Bay Area especially, payments were going up 500-1000 or more. Plus, houses that were bought three years ago held the same value. So not only did the mortgage go up, there is no equity.
While I do feel bad, I personally don’t think the government should be involved with a bailout. Here, the market price is inflated. All the forclosures are going to even things up a bit.
The old rule of thumb about you can afford 3X your annual income is being put back into play. This means the loan companies won’t be giving the fantastic and unrealistic loans and the housing will become more affordable.AMEN! I agree! The housing market needs to come back into check. Things are way out of control. I do think that the government needs to force lenders to make sure buyers understand the terms of the loan. I totally agree about interest only loans. They are as bad as ARM loans and to me they don’t make sense.
I consider my house as part of my retirement. I dealt with my loan as carefully as I would deal with my 401k. I want this baby paid off before I retire. Then I know I won’t have to pay rent or a note once I decide to retire 🙂
Can’t say that I agree on government intervention at this point. People should exercise some common sense, read the fine print and ask a buttload of questions if they aren’t sure. If they’re confused and they feel their lender isn’t helping them, they need to find someone who knows and they can trust to ask.
People don’t have to be rocket scientists, but they should accept responsibility for their own lack of research and forethought if there are no other extenuating circumstances.
That being said, I’m not paying much attention to the housing market right now since everybody I know either rents or owns their house (we’re from a small, rural area). You can bet your yearly salary I’ll be paying close attention to how things work when the time comes for me to buy, though.
I think they both said that they dont think the government should intervene. I dont think they should either. A house is one of the biggest commitments you can make, and if people go into it lightly, just like a marriage, its gonna fail. I would like the lenders to explain about ARM a little better, but when I bought my house, I understood what could happen and didnt want to risk it. Alot of whats wrong with our country is people not accepting individual responsibility and then expecting someone else to fix it when things go south.
skigod377 wrote:Rusti wrote:keschete wrote:Phoenix wrote:It’s not just the ARM.
People who would not have been able to afford a mortgage bought into Intrest Only Loans. Problem was that they would have to negotiate the interest rate in 3-5 years. So while three years ago the interest rates were 5%, they went up to 6-7%. So here in the Bay Area especially, payments were going up 500-1000 or more. Plus, houses that were bought three years ago held the same value. So not only did the mortgage go up, there is no equity.
While I do feel bad, I personally don’t think the government should be involved with a bailout. Here, the market price is inflated. All the forclosures are going to even things up a bit.
The old rule of thumb about you can afford 3X your annual income is being put back into play. This means the loan companies won’t be giving the fantastic and unrealistic loans and the housing will become more affordable.AMEN! I agree! The housing market needs to come back into check. Things are way out of control. I do think that the government needs to force lenders to make sure buyers understand the terms of the loan. I totally agree about interest only loans. They are as bad as ARM loans and to me they don’t make sense.
I consider my house as part of my retirement. I dealt with my loan as carefully as I would deal with my 401k. I want this baby paid off before I retire. Then I know I won’t have to pay rent or a note once I decide to retire 🙂
Can’t say that I agree on government intervention at this point. People should exercise some common sense, read the fine print and ask a buttload of questions if they aren’t sure. If they’re confused and they feel their lender isn’t helping them, they need to find someone who knows and they can trust to ask.
People don’t have to be rocket scientists, but they should accept responsibility for their own lack of research and forethought if there are no other extenuating circumstances.
That being said, I’m not paying much attention to the housing market right now since everybody I know either rents or owns their house (we’re from a small, rural area). You can bet your yearly salary I’ll be paying close attention to how things work when the time comes for me to buy, though.
I think they both said that they dont think the government should intervene. I dont think they should either. A house is one of the biggest commitments you can make, and if people go into it lightly, just like a marriage, its gonna fail. I would like the lenders to explain about ARM a little better, but when I bought my house, I understood what could happen and didnt want to risk it. Alot of whats wrong with our country is people not accepting individual responsibility and then expecting someone else to fix it when things go south.
I completely agree. When we bought our house, we asked lots of questions and decided to go with a fixed-rate. I’d rather pay a little more up front than deal with the uncertainty in the future. 🙂
I agree as well. It’s a hard thing, but being responsible for your own actions is something I hold as a high priority…We couldnt get a fixed rate the first time we tried but refinanced within a year and a half instead of letting it get to the two year mark when it became adjustable rate. Now we’re on a fixed rate, but it’s because we found out how to get on one, took care of some things, and then refinanced. If we were having a hard time due to an adjustable rate, it would be our own fault for getting in that position in the first place. We signed the papers, no one else. It’s really sad that people are getting hurt by this. I feel like there needs to be a class in high school where they explain basic stuff like principle balances, mortgage loans, refinances, and other basic stuff that people really need to know. We had to find out by experience, and I think people should be more prepared.
Experience is honestly one of the best teachers. You can learn everything you think you need to know in school but when you get out there and actually do it, you adapt and roll with the punches and things are never quite how you learned them.
Ahhh, life.
It sure gets interesting, doesn’t it?
Rusti wrote:Experience is honestly one of the best teachers. You can learn everything you think you need to know in school but when you get out there and actually do it, you adapt and roll with the punches and things are never quite how you learned them.
Ahhh, life.
It sure gets interesting, doesn’t it?Yah, but wouldnt you wanna learn your mistakes with something cheaper than a house?! 😆
dragonmedley wrote:It’s the total opposite here in the Toronto area in Canada, and I think same thing in Alberta.
The economy is doing great, and they’re building houses everywhere. The town where I live doubled, if not tripled in size over the last 20 years. Houses keep on going up and up in value. It’s nuts, really.
Yep it is the opposite here, Alberta, as well, we are doing very well. The place we bought last August has appriciated from the 188,000 we paid to about 350,000 in a year, and it is a 1979 trailer on a lot, imagine what houses go for here. One day the bubble will burst, but not so long as there is oil to be mined. The big companies have several billion dollars invested in future expansion, besides what they have already built.
Rusti wrote:Experience is honestly one of the best teachers. You can learn everything you think you need to know in school but when you get out there and actually do it, you adapt and roll with the punches and things are never quite how you learned them.
Ahhh, life.
It sure gets interesting, doesn’t it?
Yeah, experience can never be substituted as the best teacher….but I’m thinking of some of these families with kids being put out of their homes because they assumed the people helping them finance their homes had their best interests in mind…when they may not have had anything explained to them at all or they may not have agreed. When we very first bought the house we’re in, not much was explained to us and we were sooooo fortunate we were able to refinance when the two year mark hit. We were struck by surprise so unfortunately we had to get yet ANOTHER ARM loan. But this time we knew we had two years to fix our credit, so we got our ducks in a row so now we have a fixed rate. Each time you refinance you’re adding more to your principal balance because of all the fees…so now our principal amount is a good ten thousand more now than it was when we started this mess. That’s alot of money I would have preferred to learn in high school rather than experience…that’s alot of cash down the drain spent to learn this lesson. It’s also hard not to end up in a bad situation when you don’t know WHAT questions to ask in the first place.
No kiddin’ Ski. I sure as hell wouldn’t want a house to by my big mistake!
And Purplecat, perhaps I’m a cynic, but I’m one of those people who doesn’t trust anyone who isn’t a relative or a very close friend. My faith in humanity is pretty much nil at this point. That and you know what assuming does…
We learned some check writing and checkbook balancing in our little economics class. I suppose it could be a quickie in home ec or something, but as before, even with a class, it won’t help the majority of people, IMHO.
Nope I have to agree with PC on that one, I dont trust a finacial institution, they are a business, out to make money like any other. There was a huge number of people who lost their homes due to not useing fixed rates, the interest rate jumped to 20+% overnight it seemed and the samething happened to many here. We have a fixed rate as well, I am not going to gamble my house for anything, expecially a few hundred bucks. One of the ladies I work with doesnt have hers locked in so they can make balloon payments, if it is locked in you can only pay an extra certin % a year, but it just isnt worth it to me.
WOW! Wish I had real estate in Canada right now! I bought my house about 7 years ago and if I sold it now, I would barely make a profit after closing costs. I am hoping all the base closures will make Ft. Hood bigger and make the houses over in that area skyrocket!!
We bought our place for $235,000 5 years ago. The same size units are now selling for $395,000. We’re selling in the next year or so, it’ll be a nice profit but that is all going back into another mortgage…
Since we plan on staying here for at least a few more years we are not going to sell, no point, everything else has gone up at the same rate.
Actually, we’re not selling because of the prices…more because we’ve run out of room. I’ve got boxes and boxes sitting in the middle of our living room because I don’t have anywhere to put them. Even our small storage room is full to the rafters. And now my Windstone collection has taken over the upstairs bookshelves. 😆
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