NH real estate, how much lower will it go? (mortgage, loan)

[Brave Stranger]

Originally Posted by FiveHorses

Well, they weren't alone.

We moved here from Ireland - which along-side Spain has had the biggest property bust in Europe. Those are the two countries held up as shining examples of how it can go so spectacularly wrong.

What truly fascinated me was the rampant belief that it could go on forever. As far back as 05, I used to look around me and say, "Lads, it'll end in tears." I was considered a party-pooper. I'm no economist and still have to reread paragraphs about hedge funds twice to get them to make any sense, but common sense dictates that when the cost of housing is so totally and completely out of whack with income (not to mention has no basis in reality), something HAS to give.

Common sense or talented bankers... which is the biggest oxymoron in the English language?!

Good old fashioned greed.......it's human nature. We had a sort of toxic brew between government, business, and a willing public.

[GregW]

There is a very fine line between finance and gambling. The world has been on the gambling side. Now the losses are being tallied and it is not pretty.

[BF66389]

One thing I think may actually have a stimulative effect is if the provision for allowing current responsible homeowners to refinance at current rates up to 105% LTV with no PMI with low refinancing fees actually comes out that way (which I am doubtful of). From what I've read THAT specific provision is targeted mainly at allowing well-qualified folks who purchased recently to refinance at the lower rate without PMI, even if they have less than 20% equity (which they may have even if they were smart and saved up 20% initially).

I did the math on this and in the case of a $400k home purchased within the past year (at close to 6% interest with over 80% LTV) it will free up something in the neighborhood of $400-$500/month.

What's interesting is this is no cost to the government for responsible buyers (which given what I saw for screening criteria- is who it targets to help)...but what it DOES do is free up a good deal of cash that can be re-injected into the economy.

[BF66389]

Almost forgot the point of my story above... If executed correctly- I could see such a thing actually helping the country recover from this recession.

[BigRock]

As a long time renter, I plan to buy sometime this year. With the new $8000 tax refund if you buy this year as long as you haven't owned a home for 3 years makes it even sweeter.

[BF66389]

I think that $8k credit is going to be a fairly decent motivator. It would have been better at $15k as originally planned though.

As much as I dislike the idea of a handout like that, from an economics perspective for everyone home purchased WAY more than $15k will get pumped back into the economy.

Again though, the devil is in the details- this assumes the buyer is responsible...and while you can do as many background/income/credit checks as you want- there is no real way to guarantee that (although no more reduced-paperwork loans is a start).

[nhkev]

oh no , we have a couple more turning optimistic on the outlook of housing can a trend be started right here?

[BF66389]

I wouldn't go that far. There are simply too many factors in play in the entire economic situation for me to be optimistic yet. Right now we're still in a downward spiral or at best bouncing along the bottom. I think that these two efforts IF (huge IF) implemented will have a positive impact/are worthwhile...but even saving someone $500/month isn't valuable if their unemployed.

[MtDreamer]

Can someone tell me what the deal is with closing costs? As real estate costs went up and up closing costs seemed to soar too. Now you don't have to just save for the down payment on the house but also the HIGH closing costs. Why so darn high??

[BF66389]

I think a large portion of closing costs are a "percentage" of the selling price...so that could explain part of it?