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Old 05-15-2018, 05:36 AM
 
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Friend of mine bought his first house in 2007. Even after the housing crash, he would have just intended to stay in the house, but he lost his job and had to move. He kept the house and rented it out. For years, he said the rent didn't pay the mortgage, he had to shell out the difference. I think he's at the point where he is still upside down, but rents have gone up in the area and now the rent pays the mortgage and now he's got some profit in his pocket.

However, I'd imagine as the market creeps up, he'll eventually be in the black on the house.
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Old 05-15-2018, 06:02 AM
 
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Quote:
Originally Posted by maf763 View Post
How do you know he has zero equity? Even if he had no down payment, 11 years should cover enough principle to make up this difference.
That's true I didn't think of that at first, but then I did an online mortgage amortization calculation and he should have about $20 to $25K paid into it plus any down payment and be just about out of the hole and with prices increasing he should be in the clear soon although if he had to pay to sell he would lose with RE fees.
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Old 05-15-2018, 06:17 AM
 
Location: Kansas City North
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Glad to know Iím not the only person who noses around on public records looking at friends/neighbors........
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Old 05-15-2018, 06:29 AM
 
Location: Research Triangle Area, NC
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Quote:
Originally Posted by HokieFan View Post
Exactly, we don’t know how much of a down payment he had or if he made extra payments. OP is basing this assumption without having any idea as to what is the current balance of the mortgage.

And sometimes, those online records are incorrect. My house shows it sold for $275k and $351k on the exact same day. So nosey folks don’t know how much we paid for our house.
I'm glad someone else brought this up.

Unless someone took out a second mortgage or they started out with an interest-only loan; it's highly unlikely that they wouldn't have paid down enough principal after 11 years to at the very least break-even.

"Underwater" means that you owe more on the house than you could currently sell it for. It doesn't just mean that it is worth less now than your original purchase price.

There are probably many homes that folks bought right at the height of the market in 06/07 that they could not sell now for more than they originally paid; but if they have been making their payments, even if they put 0% down, it would be exceptionally rare for someone to be "underwater".
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Old 05-15-2018, 06:31 AM
 
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Originally Posted by Okey Dokie View Post
Glad to know Iím not the only person who noses around on public records looking at friends/neighbors........
I normally don't but decided to because I thought they may qualify for a housing program since they are a nurse.

I do check homes in the area, but mostly to see the lot size or the year it was built or how much they pay in taxes. There is a great and easy to use system in my county that makes it easy to view the next or previous parcel and to search by address. Where my father lives up north they make it almost impossible to find the site and then it's only searchable by name, so I can't see what his neighbors are paying for taxes.
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Old 05-15-2018, 06:36 AM
 
10,271 posts, read 6,506,221 times
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Originally Posted by TarHeelNick View Post
I'm glad someone else brought this up.

Unless someone took out a second mortgage or they started out with an interest-only loan; it's highly unlikely that they wouldn't have paid down enough principal after 11 years to at the very least break-even.

"Underwater" means that you owe more on the house than you could currently sell it for. It doesn't just mean that it is worth less now than your original purchase price.

There are probably many homes that folks bought right at the height of the market in 06/07 that they could not sell now for more than they originally paid; but if they have been making their payments, even if they put 0% down, it would be exceptionally rare for someone to be "underwater".
According to an online calculation after 11 years since the vast majority of those payments are interest and he would still be paying more in interest than principal at this point he would be close to not being underwater with his loan depending on what he could sell his condo for but that's if he put zero or 3.5% down which I do not know. He could have also made extra payments so there really is no way to know but to guess or ask the person. He did buy when it was high so I'm guessing since it's a condo that he put down 20%, in which case he may not be underwater.
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Old 05-15-2018, 06:47 AM
 
Location: Tennessee
20,989 posts, read 15,296,258 times
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I know a few.

There is a local lake that has had its water level greatly reduced over the past few years while repairs are being made on its dam. The lake isn't expected to be at full pool until at least the early 2020s. That will put the project somewhere around the ten year mark. Many, many people on that lake who bought from probably the peak of the real estate boom are definitely underwater. I know a couple of people with lake property on that lake who admit they are underwater.

An uncle of mine bought a home next to a state park's golf course. Twenty years ago, this was a hot area. Today, not so much. It's zoned for county schools. County schools suck, but they were better years ago. The wealthier people are moving to the next county over. There's not much of a market for a $500k house in this county. I have no idea what he put down, but there's a good chance he's somewhat underwater.

Locally, about 10%-20% of mortgaged properties are seriously underwater. That's worse, mostly, in rural counties where there is a shrinking population and almost no jobs.

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Old 05-15-2018, 06:58 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
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Most all of the people we know are here in Washington or in California, and despite the recession, have more than recovered, with homes now worth close to or more than double what they were in 2009.
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Old 05-15-2018, 07:47 AM
 
10,271 posts, read 6,506,221 times
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Originally Posted by Serious Conversation View Post
I know a few.

There is a local lake that has had its water level greatly reduced over the past few years while repairs are being made on its dam.
They are underwater with the potential to literally be under water if the dam breaks one day.

How Ironic would it be if in a few years on the day they are no longer underwater financially the damn breaks.
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Old 05-15-2018, 07:56 AM
 
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We have neighbors who bought in 2006 or 2007 who were underwater for quite a while, but all the values are sky high again. This is in Southern California. Even the house that sold a little over a year ago in 2017, for what seemed to me a ridiculous price, has already appreciated considerably.
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