How is everyone doing it? (foreclosure, mortgage broker, loans)

[nsa162]

I am often amazed at all these big houses that people in NJ are building and buying. If you are one of these people, can i ask what exactly you do for a living to be able to afford a 500k house.Maybe i will get into that field

[BobKovacs]

Bear in mind that alot of the people who bought those $500k houses can't afford them- they've got interest-only ARM loans that have come due now, or are coming due shortly, and many of these folks are now facing foreclosure. That's why the mortgage companies have tightened the lending requirements again, and you're starting to see "normal" loans and interest rates again.

For the people who "sorta" can afford them, they spend an excessive percentage of their net incomes on their mortgage payments and property taxes, and have very little money left over for savings, 401k's, or anything else. It's truly a sad state of affairs that many people in this area have put themselves in.

Bob

[nsa162]

So these people buy a house with the adjustable rate mortgage hoping the house builds value and then sell it? I like NJ and its sad that i cant buy a house here unless its located in camden or trenton.
It seems that north and central jersey are for people who commute to NYC but want the suburban lifestyle. That being said, why dont people live in southwest nj where its much cheaper and commute to Philly. Philadelphia has many jobs, i'm sure.

[BobKovacs]

Originally Posted by nsa162

So these people buy a house with the adjustable rate mortgage hoping the house builds value and then sell it?

I think it's more that they buy the house thinking that they can afford the low payment that the mortgage broker sells them on, not realizing that they're going to have problems down the road when the rates ratchet up and the principal also kicks in. Of course, they were also counting on the massive appreciation of recent years to continue as well, which it obviously hasn't.

Bob

[DaSkorpion]

Originally Posted by nsa162

I am often amazed at all these big houses that people in NJ are building and buying. If you are one of these people, can i ask what exactly you do for a living to be able to afford a 500k house.Maybe i will get into that field

=============

Hmmmmm I do not have a $500K home yet maybe in my next life but when I do I will definitely give you a holla...just in case you do before me, give me a shout out so I can follow in your steps as well..!!!

[njkate]

Originally Posted by BobKovacs

Bear in mind that alot of the people who bought those $500k houses can't afford them- they've got interest-only ARM loans that have come due now, or are coming due shortly, and many of these folks are now facing foreclosure. That's why the mortgage companies have tightened the lending requirements again, and you're starting to see "normal" loans and interest rates again.

For the people who "sorta" can afford them, they spend an excessive percentage of their net incomes on their mortgage payments and property taxes, and have very little money left over for savings, 401k's, or anything else. It's truly a sad state of affairs that many people in this area have put themselves in.

Bob

True True.....the new Starter Castles where I live that USED to be acres of woods.....I have yet to see 1 moving truck with furniture show up....2 years later and the windows are still bare

[JayCT]

A family would need to make about $150k per year to afford a $500k home. That is not that difficult for two working professionals in a state with incomes like NJ. Jay

[eb23air]

It's a combination of high incomes, combined incomes, and living in a house with a very large mortgage.

[NewHomeHappy]

Originally Posted by BobKovacs

Bear in mind that alot of the people who bought those $500k houses can't afford them- they've got interest-only ARM loans that have come due now, or are coming due shortly, and many of these folks are now facing foreclosure. That's why the mortgage companies have tightened the lending requirements again, and you're starting to see "normal" loans and interest rates again.

For the people who "sorta" can afford them, they spend an excessive percentage of their net incomes on their mortgage payments and property taxes, and have very little money left over for savings, 401k's, or anything else. It's truly a sad state of affairs that many people in this area have put themselves in.

Bob

Not everyone, not me, not my neighbors, not my friends. I have heard these horror stories though.

[juliann1977]

Wall Street and Big Four accounting firms.

Sure, there are people that overspend, but there are plenty of people in NY/NJ who can legitimately afford McMansions.