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[Cut back in other areas of your life and sacrifice to make the payments you committed to.[/quote]
Geese people....Let me explain. We are not in a fixed loan. We have an arm loan and it is going to go up in August. Our mortgage broker told us that is was a good loan for now and we could refinance in august for a better loan. That was 2 years ago. So BEENA we have always paid our payments but now we are afraid we won't be able to afford them. We can't refinance because we have NO equity in the house. Our house payment might go up a $1000.00 a month. I know we should have researched the loan more but we trusted our mortgage broker to lead us in the right direction. But no one could have predicted the market drop. So NO we're not just going to walk away from our responsibilities, but we might be forced to. We both have very high perfect credit, but we may be stuck. Thanks
My apologies. And I sympathize more than you know. I also had no idea the market could turn so quickly and so dramatically. It seems obvious now that we shouldn't have been purchasing with ARMS back in 2005 (myself included) but it sure didn't seem obvious then.
{quote] Learn from this! Buy what you can afford, live within your means and do not buy an investment (stock, bond, home or otherwise) unless you intend to keep it through ups and downs for several years.[/quote]
To RCARRILLO, We did not buy this as an investment property. We bought it to live and raise our kids. Please read my above post. It explains more. Or are you one of those mortgage brokers that was selling Arm loans too??
Geese people....Let me explain. We are not in a fixed loan. We have an arm loan and it is going to go up in August. Our mortgage broker told us that is was a good loan for now and we could refinance in august for a better loan. That was 2 years ago. So BEENA we have always paid our payments but now we are afraid we won't be able to afford them. We can't refinance because we have NO equity in the house. Our house payment might go up a $1000.00 a month. I know we should have researched the loan more but we trusted our mortgage broker to lead us in the right direction. But no one could have predicted the market drop. So NO we're not just going to walk away from our responsibilities, but we might be forced to. We both have very high perfect credit, but we may be stuck. Thanks
So then your eyes were too big for your budget.
Quote:
To RCARRILLO, We did not buy this as an investment property. We bought it to live and raise our kids. Please read my above post. It explains more. Or are you one of those mortgage brokers that was selling Arm loans too??
Who sat over you with a gun to your head and made you sign those papers? Banks are not your "friends" to be "trusted". Too bad you're in a mess; you made it yourself. Shouldn't have bought more than you could afford.
I have to admit, I lean on the side of buyer responsibility on this debate. So many people got into houses at the top of their budgets with teaser rates on ARMs or I/O loans and just took for granted they can refinance. I know when I got an ARM on my last house, I made sure I knew what the rate would adjust to and that I could afford the new payment if for any reason I couldn't refinance (no equity, credit score decrease, etc). ARMs aren't bad loans if you know what you're getting into. However, if you can't afford the payment on the 30yr fixed rate, you shouldn't be buying the house.
To RCARRILLO, We did not buy this as an investment property. We bought it to live and raise our kids. Please read my above post. It explains more. Or are you one of those mortgage brokers that was selling Arm loans too??
I did not say you bought it AS an investment... but a home IS an investment. Its likely one of the largest purchases someone will ever make and has a huge impact on the well being of a family.
I did about a half-dozen ARM loans in 2005-2006. Most were to investors doing quick rehabs, so they held them for under 6 months... a great reason to choose an ARM.
The rest were 5 or 7 year ARMs where the clients could qualify for a fixed rate payment and understood the risks. They wanted the lower payment and it was a starter home, so they intended to move up within 3-5 years.
Is it a risk? YES! But shoud the government or lenders control consumers choices? NO! The government should (and does) require that consumers get full disclosure on what they sign. A "good" mortgage consultant should explain it and advise the client of pros/cons. The decision should be left to the home owner who will actually make the payments.
Were people sold on the dream that prices only go up and refis would be easy? Yes, many were.
Since you are in an ARM and will not be able to make the increased payment that changes things. There are programs to help, but when you are upside down in the mortgage the options are limited. Doing a short sale and moving to someplace that fits your budget may be the best option.
I do regret the situation you are in and understand your frustration. I get many calls from home owners in simliar situation who have no equity, 150% debt-to-income ratios and little to no savings.
It makes me sick that they were qualified and advised to buy a home under the illusion that they could refi or sell in a few years and make large profits. That is not (historically) how real estate works and those that advised it are the typically learned the business from watching the infomercial gurus at 3 AM.
[Cut back in other areas of your life and sacrifice to make the payments you committed to.
Geese people....Let me explain. We are not in a fixed loan. We have an arm loan and it is going to go up in August. Our mortgage broker told us that is was a good loan for now and we could refinance in august for a better loan. That was 2 years ago. So BEENA we have always paid our payments but now we are afraid we won't be able to afford them. We can't refinance because we have NO equity in the house. Our house payment might go up a $1000.00 a month. I know we should have researched the loan more but we trusted our mortgage broker to lead us in the right direction. But no one could have predicted the market drop. So NO we're not just going to walk away from our responsibilities, but we might be forced to. We both have very high perfect credit, but we may be stuck. Thanks[/quote]
I am going to refrain from sharing my philosophical prejudice about personal responsibility vs broker responsibility vs "caveat emptor" vs market risks.
Instead, I hope the one of the following options used 20 to 30 years ago may be helpful to you. Obviously none of these are pleasant. In the past people about to lose their home tried: taking in a boarder, getting a second job, borrowing from a private party (usually a relative). Good luck. Whatever you do it's going to be painful.
Who sat over you with a gun to your head and made you sign those papers? Banks are not your "friends" to be "trusted". Too bad you're in a mess; you made it yourself. Shouldn't have bought more than you could afford.
Easy there, RoaminRed. I'm a banker and I am to be trusted. I look out for customers first and foremost. MOST bankers are okay. Some mortgage brokers are sleazy (so it appears), but they work on commission
Easy there, RoaminRed. I'm a banker and I am to be trusted. I look out for customers first and foremost. MOST bankers are okay. Some mortgage brokers are sleazy (so it appears), but they work on commission
My apologies. My sentiments are probably better expressed by "know what's on your loan docs and don't depend on the other party to tell you". If they signed without understanding the bottom line, and not doing their own research (or not contracting an attorney to do it for them) then they are to blame.
As far as trust goes, no, I wouldn't trust the lender to tell me what was in the fine print in the documents...I'd find out for myself.
It makes me sick that they were qualified and advised to buy a home under the illusion that they could refi or sell in a few years and make large profits. That is not (historically) how real estate works and those that advised it are the typically learned the business from watching the infomercial gurus at 3 AM.
Well said. Rep points to you.
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