Best time to put a house on the market in SA? (San Antonio: loan, buying)

[HillCountryHotRodMan]

Originally Posted by RGJ

3% down did not get the housing market where it is. 3% down has been around for decades. What difference does 3% down make if someone is adequately qualified to make the mortgage payments?

3% down affects initial homeowner equity. If you put 3% down on a $200,000.00 home, the amount of equity is $6,000. If you put 10% down, then it is $20,000. The less you put down, the more you are financing and the less of the property that you "own". Also, the less you put down, the longer it will take you to build your equity. Should you care about your equity in the property? If you view your home as an investment and you want to sell it, you probably will care.

[RGJ]

Originally Posted by HillCountryHotRodMan

3% down affects initial homeowner equity. If you put 3% down on a $200,000.00 home, the amount of equity is $6,000. If you put 10% down, then it is $20,000. The less you put down, the more you are financing and the less of the property that you "own". Also, the less you put down, the longer it will take you to build your equity. Should you care about your equity in the property? If you view your home as an investment and you want to sell it, you probably will care.

I agree with all that, but the 3% down put a lot of people in houses. And a lot of those people still own those houses, continue to maintain them, and make their mortgage payments. Years ago people kept their houses longer. For whatever reason, job transfer, moving up thesocial ladder, people no longer keep theirs houses any length of time to build up equity.

[TexasRedneck]

Originally Posted by Proffer

Stabart47, seriously, if I were you, I would stop paying your mortgage immediately, live in the home free until it's forclosed upon, and use the cash you save to get into something else some other time. Do you think that the bansters who have stuck you with the loan haven't done the same thing as they've run to the Fed (i.e., taxpayer) for a bailout for their casino behavior? You owe NOTHING to the bank. None of us does.

Stabart, follow this advice only if you don't care what you'll do to your credit for many, many years to come - and if you never intend to call yourself a person with scruples. Some folks give advice without care as to the consequences, sometimes simply because they've been reading some book - other times because they simply don't know what they're talking about.

[kevcrawford]

Originally Posted by Proffer

Stabart47, seriously, if I were you, I would stop paying your mortgage immediately, live in the home free until it's forclosed upon, and use the cash you save to get into something else some other time. Do you think that the bansters who have stuck you with the loan haven't done the same thing as they've run to the Fed (i.e., taxpayer) for a bailout for their casino behavior? You owe NOTHING to the bank. None of us does.

This garbage and irresponsibility is EXACTLY how the country got into the mess it's in.

Just let someone else take care of your problem. Idiotic suggestion, at best.

[kevcrawford]

Originally Posted by RGJ

3% down did not get the housing market where it is. 3% down has been around for decades. What difference does 3% down make if someone is adequately qualified to make the mortgage payments?
It was fraud on some in the lending industry and fraud on the part of the buyers. It's also the ARM and short term mortgages where people gambled on the future.

EXACTLY. I got a 100% loan when they were still being done. Got a killer rate and am getting better returns on my money elsewhere. Many folks did and there was NO reason not to.

I had a plan and have continued on that plan (ie. not moving for years). Most folks that have done low down payment loans are still OK. It's those that didn't plan to stay in the property for a long time, or were forced to sell sooner than they thought that are having the issues.

It's not the amount of down payment. It's that COMBINED with how long you're in the house.

[Proffer]

Of course there are many responsible people who got in with 3% down. My point is that it allowed more unstable and irresponsible people to "buy" as well.

If I were upside down on a mortgage, I would walk away. Better 7 years of bad credit than throwing tens of thousands of good money after bad. As far as scruples go, the banks knowingly and willfully made loans that they knew would not be repaid because they knew they would be bailed out. It was all premeditated that their profits would be private, and their casino losses would be socialized. I'd turn in the keys and tell them to take back their house. As they say, what's good for the goose... You're just going to hear other owners and realtors here cry bloody murder because as more and more people take this approach, the artificial gains of the past several years will evaporate and you'll be able to come back into the market later at a much cheaper price (unless the Fed succeeds at monetizing the national debt to the point that all of our money is completely worthless, but that's a whole other argument).

[Proffer]

Oh, and if one still feels guilty about walking away from a mortgage. Figured into the concept of mortgage interest is the notion that it compensates the bank for the possibility of default--an insurance, if you will, to protect the bank should you default. That's a lot of what mortgage interest is. By signing the contract with you, the bank has been charging you (and all other debtors) this interest/insurance to the tune of thousands of dollars a month to cover them in the event that you default--so you've in effect already compensated them for your risk of defaulting!! Breathe easy

[TexasRedneck]

Proffer, what you're saying is the same as promoting insurance fraud - to tell folks to file claims falsely. And it also shows just how little you actually know - because it scares me to death that some will listen to your babble and somehow have the impression you know what you're saying, and therefore act on your advice.
"PMI" is the "insurance" you refer to - and it applies only to loans that exceed 80% of the property value. PMI insurance can be canceled once the value is greater than 80% of the note. And it's intended to help cover those that honestly can not pay, NOT those who no longer WANT to pay.
Folks, PLEASE - consult competent legal advice before taking on ANY legal advice from the net - especially from those promoting the "easy" way out - because usually, it's not!

[Proffer]

I know what PMI is, and I'm not talking about that. The interest for ANY kind of loan is, in part, representative of protection for default. Additionally, defaulting on a mortgage is not fraud. Yes, if I were doing a strategic default, I'd definitely have a lawyer look over my loan to make sure I was covered from any deleterious effects.

[sshurgot]

Of course there are plenty of people who bought houses with very little down and are doing just fine. The problem was with folks who were never going to be able to repay to begin with. I met a couple back in August who was trying to buy a house (and get a mortgage); they had just had their $25,000 truck repossessed in July. They hadn't told anyone; it showed up on the credit report. How did they ever think they would get approval for a loan? It's one thing to buy a house with 0 down if you have the money but choose not to make a down payment. It's a whole different story if a buyer wants to put very little or nothing down because they don't HAVE the money to put down.

There's a great deal of innumeracy out there. (I taught math for 11 years and am concerned about younger generations of borrowers.) Many people are clueless when it comes to numbers. I'm not talking about calculus here; I'm talking about basic arithmetic. It's very sad.

Buyers got into exotic loans because they didn't really understand them. But even the most basic loan involves paying interest. With a thirty-year note at a fixed 4.5%, it takes 176 months (almost 15 years) before the principal portion of the payment equals the interest portion. This means that for almost 15 years over half of the payment goes to interest. Many people don't know that. And if the interest rate is higher, it takes longer. (I know people with 8% notes, for them it's 256 months or over 21 years out of 30 before the payment is 50/50 principal / interest). Banks used higher interest rates to mitigate the higher risk of loaning money to borrowers who were less likely to be able to repay; from the borrower's perspective it made no sense. You have somebody who already has trouble paying bills and you stick them with a higher interest rate (and, therefore, a higher monthly payment) and PMI. It wasn't sustainable.