Posted on 03/26/2012 8:14:34 AM PDT by reaganaut1
So 30% think people should buy houses they can’t afford? Nonsense poll.
Got to live within our means.
We’re fixing up our place and prepping to sell. Should walk away with enough equity to downscale a bit, find a foreclosure, and maybe even go debt free.
It’s time.
If a person is struggling but not in trouble yet they should sell before they ruin their credit...
renting for a while until they get another job etc is not gonmig to hurt their ego
But will preserve their ability to but another house in the future...
also if they are that bad off they can get Section 8 housing...
thats help to pay rent based on the persons income..
weird poll...
Increased mortgage payments ? what increase ? can’t be ARMs anymore.
selling at what price ? who is buying ?
I just heard about a friend of my daughter that did this. She got her home sold, bought a bigger, nicer home for far less money so her monthly payment went down by quite a bit. The house she just bought is an older home and the one she sold is fairly new- I told her the older home was likely much better built. The issue is in many areas it is impossible to sell a house, or people owe so much they cannot sell their house for enough to pay it off...doesn’t work for everyone.
I just heard about a friend of my daughter that did this. She got her home sold, bought a bigger, nicer home for far less money so her monthly payment went down by quite a bit. The house she just bought is an older home and the one she sold is fairly new- I told her the older home was likely much better built. The issue is in many areas it is impossible to sell a house, or people owe so much they cannot sell their house for enough to pay it off...doesn’t work for everyone.
These polls are a little silly; individual circumstances widely vary, and make buy/sell decisions very unique to the owner.
If you’re $50k underwater, it may be better to “struggle” with your current mortgage. If you’re at a break-even point, selling may be a good option, but buying something else may not be.
But I agree wholeheartedly with you: no more government backed mortgages. I’m currently in a very bad position as an owner, and I just want this slow road to hell to end. It will not unless and until the we allow foreclosures, refi’s, etc. to proceed without government interference.
It takes years to get section 8 someone has to die or leave the rolls so there is room for you.
We tried to buy a house. Underwriter killed the deal.
We bought a mobile home. Own it outright. Lot rent is less than property taxes on the house we wanted.
Best move we ever made.
The problem with saying they should simply sell the more expensive house & buy a cheaper one is some people are so far underwater they don't have the cash to make up the difference between what it sells for today versus what was paid for it.
And, in that situation, if you don't have that liquid cash you're screwed.
The only problem with that scenario is most of these people would actually lose money because they would have to sell below market and probably for less than they owe.
So, even though they could sell the house, they would still be in debt. (the bank isn’t going to forgive the balance)
Of course, the answer would have been not to buy above your means to begin with.
It’s one thing to buy an ‘affordable’ house with a bank loan, and another thing to buy your ‘dream’ house because you ‘want it’.
The rule of thumb, at least for me, is that if you can’t pay your mortgage with one pay check, then you can’t afford it.
But,that’s just me.
You beat me by mere seconds.!
Great minds and all..
:0)
As someone who sold a house at a loss, I couldn't help but chime in. Luckily, it was a very affordable house & I only had to pay a few grand out of pocket for the loss.
Of course, I would have preferred not doing that(!) although I am happy, in today's environment, to be renting instead of owning.
If the government really wanted to help they would have a program that would allow refinance with a balloon at the end. That would lower their current payment and allow for the market to increase over the years so when they sold they would either break even or have a small profit. They could turn it or refinance it long before the balloon came due.
People who are ready and qualified to move up could exchange with those who are looking for a way out.
Fun negotiating game for kids of all ages.
Its that improving economy ~ again!
Its those green buds....errr shoots
Signs are everywhere - Fore Sale. (Forcelosure/ Forced Sale)
With their new jobs and higher than expected incomes they can now afford to come out of arrears, increase payments and buy a larger home!
Right On Obama Stimulus!!! We have to thank Obama!
AND selling in a very stale market is not what the author pretends to be so easy a solution.
Actually there is another problem, and it is the one that makes this situation so difficult.
Houses don't exist in a vacuum. They are part of a neighborhood. When the irresponsible buyers take their medicine and sell at a huge loss, they drag down the value of all surrounding houses. A friend of ours got caught up in this very scenario. They were fine, their immediate neighbors were fine, but a couple of streets over - oh brother.
Those were the last houses built in the development. The bank and the developer wanted to wind-up the deal, so they sold those houses with ‘aggressive’ financing. Most of the people that bought them had no financial business being in them. And they weren't for long.
Suddenly my friend and all of his neighbors, through no fault of their own, are completely underwater, . When his company offered him a pretty good promotion if he'd move to another location, the shellacking he'd take on his house made the move impossible. I don't believe this is an isolated example.
But, but, but what about all those janitors who bought $400,000 homes based on ... based on ... well, based on nothing? Should they have to get a home they can afford? Oh the insanity....
That's called a "sunk cost", it most likely will never be recovered. You should not factor in what you are losing in your decision, only in the impact of cash flow going forward.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.