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Old 06-12-2009, 04:03 PM
 
Location: southwest michigan
1,061 posts, read 3,586,172 times
Reputation: 503

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Quote:
Originally Posted by EscapeCalifornia View Post
Just wait two years for the house to appreciate 30%!
Yep, that's what they told everyone..."It doesn't adjust for 5 years, and by then, you can totally refinance, get a lower payment and get cash out. Trust us! It'll be great!"
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Old 06-12-2009, 04:05 PM
 
Location: San Jose, CA
7,688 posts, read 29,175,851 times
Reputation: 3631
Quote:
Originally Posted by dweej View Post
Yep, that's what they told everyone..."It doesn't adjust for 5 years, and by then, you can totally refinance, get a lower payment and get cash out. Trust us! It'll be great!"
Exactly what one huckster in the area told me. I wonder how far upside-down he is in his house in Milpitas now.
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Old 06-12-2009, 04:05 PM
 
11,715 posts, read 40,479,848 times
Reputation: 7586
Quote:
Originally Posted by dweej View Post
Yep, that's what they told everyone..."It doesn't adjust for 5 years, and by then, you can totally refinance, get a lower payment and get cash out. Trust us! It'll be great!"
Even better, use the equity to trade up to a bigger house.
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Old 06-12-2009, 04:10 PM
 
Location: Oakland, CA
1,554 posts, read 5,293,220 times
Reputation: 713
Quote:
Originally Posted by dweej View Post
Yep, that's what they told everyone..."It doesn't adjust for 5 years, and by then, you can totally refinance, get a lower payment and get cash out. Trust us! It'll be great!"
Predatory lending.
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Old 06-12-2009, 05:06 PM
 
28,115 posts, read 63,738,568 times
Reputation: 23268
At one time 80-10-10 loans were popular... conventional loan at 80%, seller carry 10% and 10% down.

The VA and FHA always had special programs... nobody with an older home wanted to sell FHA because older homes were often costly to sell that way for the seller.

Sold a home once VA and there was a problem with the detached garage...

Home was cute as a button with loads of Charm... was even on the cover of the local Real Estate Section

Anyway, home was perfect... detached one car garbage was in sad shape and built on lot line. At first, appraiser would approve with a termite clearance on garage which would have been very costly and time consuming... garage was listed as tear down in listing... needed 20k in work...

Spoke to the appraiser and learned anything within 5' of the house had to also have a termite clearance... I said Garage is 5'1" away and could he please check...

He did and everyone was pleased the sale could go through...

The VA had some special programs that was too good to pass up IF the property met underwriting standards...

The quarter rule of thumb could be easily overcome with a larger down payment... the folks I bought my home from couldn't qualify because he was in the Military at the time and his "Flight" pay was discounted even though he was getting it for 12 years... They ended up putting more down to meet the income ratio...
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Old 06-12-2009, 05:08 PM
 
28,115 posts, read 63,738,568 times
Reputation: 23268
Maybe we should use a Contract of Sale... common in other parts of the country... kind of like buying a car... It's not yours till paid for.

Don't have to worry about loan ratios or appraisals...

Also, Seller financing is another option... one I've used many times and it was always a win/win...
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