anEconomist wrote:
Live in your home, make your money at work.
Don't worry about your home's value.
I keep telling myself that every month I drop another $780 down the crapper
On the bright side, I think I increased my VDOT by a few points the last month. Training is going well.
So you need your house to gain back $110K in value from today plus $10K a year for every year you rent it to make up the negative cash rental.
(Call your mortage payment tax deductable rent while you were living there to take that out of the equation.)
Best case scenario you sell in 5 years for $300K to break even. Maybe $350K in 10 years or $400K in 15 years. Or maybe you are OK with losing the first $50K but it will still take years for the value to come up to $200K.
But I am sure you could use that $800/month for something more usefull during that time frame.
I don't think a lot of people have the monthly budget or the means to do the right thing and keep making payments.
Many many people have yet to default that will have to default. You are actually smarter than most. And many people just took whatever loan the bank would give them. And they gave crazy loans to anybody that asked.
I think that the entire housing market may have to be reset.
There are three ways to cover negative equity or negative cash flow (which are not the same thing):
The borrower pays the difference, the bank writes off the loss (after foreclosure), the govt steps in (the paying borrower pays twice in this case)
WDC Runner wrote:
What was the original bubble, by the way?
The earliest bubble I'm aware of is the Tulip Mania bubble that happened in the Netherlands in the 1600's. In 1635 there was a sale of 40 tulip bulbs for 100,000 florins (roughly $1,250,000 today). The bubble burst in 1637 and tulips became virtually worthless.
To the OP, where do you live that you're paying $300/month in property taxes on a $250,000 house? Taxes are about a third to half that in North Carolina. You should get your house reassessed and get your taxes lowered if $140,000 is its real worth. How did you decide that $140,000 is what it's really worth?
what makes you think house prices will come back that strong in 5, 10, 15 or even 25 yearsread irrational exuberance the 2nd edition... home prices over the long run grow at nearly the rate of inflation and that is all... house prices may come down more and are not likely to 'bounce' back
toro wrote:
Best case scenario you sell in 5 years for $300K to break even. Maybe $350K in 10 years or $400K in 15 years. Or maybe you are OK with losing the first $50K but it will still take years for the value to come up to $200K.
But I am sure you could use that $800/month for something more usefull during that time frame.
It is pretty obvious what your big mistake was. It wasn't buying a house when the market was at the highest. It wasn't putting no money down. It wasn't taking an interest only loan.
IT WAS GETTING MARRRIED YOU FOOL!!!!!!!!!!!!!!!!
That is what caused the problems you are having now.
Blowing Rock Master wrote:
To the OP, where do you live that you're paying $300/month in property taxes on a $250,000 house? Taxes are about a third to half that in North Carolina. You should get your house reassessed and get your taxes lowered if $140,000 is its real worth. How did you decide that $140,000 is what it's really worth?
Even at 1% his taxes are $250/mo if the house is assesed at market value.
My rate here is 3.6% and I live in a shithole!
Shit my math sucks.
get ahold of yourself. the loss is only on paper. you like the house; you need a place to live; you don't need to move; just ride out this low in the cycle; you will come out ahead in a few years. don't be an idiot and ruin your credit. man up and quit worrying about it. the move on. last cylce like this was in the 90s out here in so cal. I bought a house near the top of the cycle in '92 for 325k. during the next 5 years, its value went as low as 150k. during the run up in values from 2002 to 2006, its value was at almost 700k. is has now gone down (in the current slump) to around 550k. I am still ahead. In the long run, real estate always goes up. Unless you are some scumbag house flipper (who helped ruin the market), then don't worry about it. you will be ok. the house you live in should be a long term investment.
dont worry about it wrote:
get ahold of yourself. the loss is only on paper. you like the house; you need a place to live;
What about "I moved in with my new wife" do you people not understand?
You're not as stupid as the people who are buying houses now...
Really I agree what a lot of people have been saying, you have a nice place to live, a great school for you kid, and a mortgage you know you can afford. Refinancing is probably a good idea if you can. Also, look at it this way: if you need to sell, your house is at current market value and so is the next house you would want to buy! As long as your credit is pretty good you should be OK.
marijuologist wrote:
You're not as stupid as the people who are buying houses now...
I bought 9 houses last year. This is a GREAT time to buy houses.
You are only an idiot if you bought it to sell. If you bought it to live, you are fine.
Why Oh Why? wrote:
I'm lucky to have a renter but I am only getting $1100 per month in rent and my expenses are $1100 mortgage plus $300 taxes plus $380 maintenance plus $100 special assessment = $1880 per month! When I bought it, the maintenance was only $270 and there was no special assessment. ouch.
So, this place is costing me $780 per month and I'm not building equity because it's interest-only for 10 years. That's why I want to sell it. But for $140k, it's smarter to keep it a rental.
Whoops. Sorry didn't see this part. YEs, you were very, very foolish.
I just found a property that was built last year and the bank will take 45k. FOURTY FIVE THOUSAND DOLLARS. You could be a bum begging for change on the train and still pay that note. If housing drops another 50% who cares when you're in a great property so cheap. I'll have it paid off in 5 years easily. Don't listen to the pessimists. Take a look at history. NOW is the time to buy.
You must live in the 'heartland'.
prices arent low where i am wrote:
You must live in the 'heartland'.
seriously. here in coastal California, prices are still way too high. My house is not much below 2006.
Home prices still have not fallen to match incomes / reality out here.
There will be another drop.
The earliest bubble I\'m aware of is the Tulip Mania bubble that happened in the Netherlands in the 1600's. In 1635 there was a sale of 40 tulip bulbs for 100,000 florins (roughly $1,250,000 today). The bubble burst in 1637 and tulips became virtually worthless.Geeze, we're not talking about primitives, chimpanzees, and Barbarians in Europe who lived in their own filth in mudhuts and never bathed at all. Wasn't the 1929 Depression caused by overspeculation and then the bubble burst.
Karl Marx wrote:
Just fall behind on your payments and the new socialist leaders will bail out out.
You beat me to it. The first thing I thought of.
Yes please take a look at history... you will see that by historical standards housing could still fall another 20% and only then be in line with average growth.Still too many losers who are banging their fist saying real estate is a good buy right now... once these people finally get that real estate is like any other asset price, that is when the market will be primed to take off
Xfit wrote:
I just found a property that was built last year and the bank will take 45k. FOURTY FIVE THOUSAND DOLLARS. You could be a bum begging for change on the train and still pay that note. If housing drops another 50% who cares when you're in a great property so cheap. I'll have it paid off in 5 years easily. Don't listen to the pessimists. Take a look at history. NOW is the time to buy.