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  1. #1

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    Real Estate - What to do?

    With Disneyland Daddy's thread of him losing his job because of what's going on with the industry, what is the best thing to do right now?

    My wife and I currently own a home that we re-fi'd on last year. I'm sure we screwed ourselves a little in doing that but it was something we had to do at the time.
    What's the best thing to do now though? Just ride it out? Take advantage of lower interest rates (if it happens)?
    We have another child on the way and I'd love to buy a bigger house but that's just out of the question!

  2. #2

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    Re: Real Estate - What to do?

    Definitely check your rates and if you can get into a lower interest loan it may be worth it. I know some mortgage companies will pay closing costs right now - can't remember the name, but its worth looking into depending on what your rate is.

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    Re: Real Estate - What to do?

    Beware of predatory lenders that offer low rates, then scam you over so bad you end up in foreclosure.

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    Re: Real Estate - What to do?

    Thanks!

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    Re: Real Estate - What to do?

    Quote Originally Posted by aimster View Post
    Beware of predatory lenders that offer low rates, then scam you over so bad you end up in foreclosure.
    Absolutely! I work for a large bank, and I hear of this stuff.

  6. #6

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    Re: Real Estate - What to do?

    I read just this morning that rates are the lowest since last May...but only by a few points. But at least they are headed in the right direction. If they keep moving down, maybe the market will pick up again. But be careful out there.

  7. #7

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    Re: Real Estate - What to do?

    So if rates are going down and I plan on staying where I live now, wouldn't it be ok for me to take advantage of them being low? I would go through my company now so I wouldn't have to worry about getting ripped off.
    I wouldn't take any money or anything out, just lower my rate and monthly payment.

  8. #8

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    Re: Real Estate - What to do?

    Just make sure you don't have to pay $4000-$5000 in fees. Many people hear they have a new rate and a new payment and it's not til they're signing the papers that they find they're also adding $5000 to their mortgage every few years when they refinance.

    We know a family who has refinanced 4-5 times in the last few years to take out money to pay off bills. They've added $20K to their original loan, just in fees, plus everything they've taken out equity-wise. And they live far enough out in the burbs, that their house hasn't risen in value in the last two years.

    And they just refinanced again.

    Just be careful with your money, people. No one else is looking out for it except you.

  9. #9

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    Wink Re: Real Estate - What to do?

    Well, it all depends on how much equity you have in your home. If you bought recently or refinanced most of your equity away, then you are better off sitting tight for the next couple years. And then calling me (shameless plug, I know, but I couldn't resist)

    If, on the other hand, you have been in your home a while, bought at lower prices, and have some room to compromise on pricing, then you could try selling your home so you can take advantage of the lower pricing and increased selection of homes to move to. That has the advantage of allowing you to ride the next market boom on the shoulders of a higher-priced property (if everyone goes up 5 percent, the total increase is higher in a higher-priced home, likewise you save more if everyone's down 5 percent and you buy a bigger home) -- Understand that in order to sell your home in this market, it must be in TOP showing condition and very aggressive on pricing, otherwise you're just spinning your wheels. Also do not buy your new home until you have sold the current one (or at least get into escrow) - you do not want to be on the hook for two mortgages. And call me

    Third option... depending on your current house payment this may or may not work for you. Check rental pricing in your area for homes like yours. With fewer people buying, the rental market has been climbing a bit. IF you can make it pencil out for you, rent out the current home, and buy the new one. And call me.

    Last edited by Morrigoon; 08-23-2007 at 07:32 PM.

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    Re: Real Estate - What to do?

    if you refi stay away from ARM's, Jumbo Arms, Pay option arms's (those are scary) and there is another loan out. I haven't seen very many of them, but the payment is amortized over 40 years, but the loan has to be paid in full in 30 years.

    Also, don't believe what they are telling you. They want to earn commission and will tell you what sounds good. Read the loan docs, because after everything is said and done all that matters is what you signed for not what you were verbally told.

  11. #11

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    Re: Real Estate - What to do?

    Quote Originally Posted by stinkerbell View Post
    Just make sure you don't have to pay $4000-$5000 in fees. Many people hear they have a new rate and a new payment and it's not til they're signing the papers that they find they're also adding $5000 to their mortgage every few years when they refinance.

    We know a family who has refinanced 4-5 times in the last few years to take out money to pay off bills. They've added $20K to their original loan, just in fees, plus everything they've taken out equity-wise. And they live far enough out in the burbs, that their house hasn't risen in value in the last two years.

    And they just refinanced again.

    Just be careful with your money, people. No one else is looking out for it except you.
    Ouch!! That sucks.
    I know that we haven't done anything like that so far. When it comes down to actually doing something, I'm very thorough. I get paranoid that I'm getting ripped off so I read everything I can to catch them. I didn't want to re-fi but we had no choice. Something came up and that was the only way we could get the dinero!

    Quote Originally Posted by Morrigoon View Post
    Well, it all depends on how much equity you have in your home. If you bought recently or refinanced most of your equity away, then you are better off sitting tight for the next couple years. And then calling me (shameless plug, I know, but I couldn't resist)

    If, on the other hand, you have been in your home a while, bought at lower prices, and have some room to compromise on pricing, then you could try selling your home so you can take advantage of the lower pricing and increased selection of homes to move to. That has the advantage of allowing you to ride the next market boom on the shoulders of a higher-priced property (if everyone goes up 5 percent, the total increase is higher in a higher-priced home, likewise you save more if everyone's down 5 percent and you buy a bigger home) -- Understand that in order to sell your home in this market, it must be in TOP showing condition and very aggressive on pricing, otherwise you're just spinning your wheels. Also do not buy your new home until you have sold the current one (or at least get into escrow) - you do not want to be on the hook for two mortgages. And call me

    Third option... depending on your current house payment this may or may not work for you. Check rental pricing in your area for homes like yours. With fewer people buying, the rental market has been climbing a bit. IF you can make it pencil out for you, rent out the current home, and buy the new one. And call me.
    I think with our last re-fi, I'd rather wait a couple of years. We didn't eat up all of our equity but we tapped into it a little bit. Plus, we bought 3 years ago when the market started to go up so I feel like we paid more than the house was worth. It recently had appraised for more so we made some but not as much as I thought we would have. Definitely not as much as other homes around our area.

    Once I'm ready, I'm calling you though!!
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  12. #12

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    Re: Real Estate - What to do?

    Heheh, glad to help, LOL

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  13. #13

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    Re: Real Estate - What to do?

    Personally I suggest waiting another year or so.

    Right now banks have a lot of bank owned properties on their books thanks to the reposessions. For now they are riding out the slump but in time the Feds will push them to sell.

    They have already devalued these properties on their books, so I suspect we will have some bargains come next fall.

    But of course I could be wrong, it's all a guessing game.
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  14. #14

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    Re: Real Estate - What to do?

    My crystal ball is in the repair shop right now, but as long as you are in an equity position, have a fixed rate mortgage, and are not being forced to sell right now, I'd wait it out. Unless of course, your current mortgage is much higher than the available ones, or you are in an ARM. In that case, I would look into a re-fi. Only you can decide though, since only you know the numbers.

    Sure, we all would love to have a bigger house, but unless you can get out of yours clean, and get into a new one with a fixed rate mortgage that fits nicely into your budget, you might as well wait.

    Prices aren't going up anytime soon. Too much inventory out there.

    You should also look at buying a NEW home. Builders in our area have new homes just sitting there waiting for buyers. I'm starting to see incentives appear in the ads as well. And not just discount prices. Closing costs waived (reimbursed), spending spree's at the local furniture store, etc...

    The problem with buying an existing home right now is the fact that quite a few of the homes up for sale are "upside down". Folks re-fi'd all of the equity and then some, and now owe way more than the home is worth. They (literally) can't afford to take a lower price on their home, because they don't have the cash to pay down the note to a reasonable selling price.

    But a builder can lower his price. He (essentially) doesn't have a traditional mortgage tied to the homes, so his prices adjust as the market conditions dictate.

    I wouldn't bother looking into the foreclosure buying game either. The reason that most of the homes are being foreclosed upon right is because the loan balances exceed the asking price. We had 11 foreclosed homes go up for auction on the courthouse steps a few weeks ago. Out of 11 properties, only ONE received a bid. And it was a condo. The rest weren't worth making an offer on.

    When the time comes to buy (or re-fi), a 30 year fixed rate mortgage. 'Nuff said...

    If folks would have used just a little bit of their brain the past few years, and stuck with a fixed rate, you wouldn't see quite as many foreclosures today.

    But unfortunately, folks fell for those ARM's like a fish takes to water.

    With RECORD LOW interest rates, which direction did folks actually think the rate would go??? (adjust to)

    Wasn't it a little obvious???

    And don't even talk about those 80/20, 100 or 125% scams.

    Way too many folks that had no business buying a home in the first place stuck their necks out signing on the bottom line for those things.

    And now you are seeing the results.

    Sure, it's sad to see, but those folks have no one to blame but themselves...

    Best of luck!

  15. #15

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    Re: Real Estate - What to do?

    ^^
    yes, I agree. The pay option arms are the loans which are being foreclosed on. Negative amortization due to only minimum payments are made which does not cover the interest on the loan. It's very sad when those loans are recalculated at the now higher principal balance.

    People wanted houses they could not afford and loan officers were more than happy to help them into those homes.

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