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ARM-adjustable rate mortgage-right?
Does that mean that interest rate starts low and gradually goes up and the rate is fixed?
Not a tracker mortgage that tracks (whatever you track over there).Or are there no tracker mortgages in the US?
Thanks!
ARM-adjustable rate mortgage-right?
Does that mean that interest rate starts low and gradually goes up and the rate is fixed?
Not a tracker mortgage that tracks (whatever you track over there).Or are there no tracker mortgages in the US?
Thanks!
The rate is FIXED for a certain period (in my case it was for 7 years...the shorter the duration, the lower the int rate because risk is higher), then the rate will adjust. When you hear of all the disasters in the subprime of rates "adjusting", that is basically what I'm talking about.
I never really understood the Palisades concept really. Middle of nowhere, high-priced, with nothing around it. We have family that have a lake house that we get to by cutting through the Palisades. They paid about the same as some of those houses were going for a couple years ago and they are on the water with their own private boat house.
I think the OP was just unfortunate enough to fall for the "pie in the sky" the developers were trying to sell.
Yes...there are break ins everywhere. But normally when you buy into a $400K-1.8M community one would think there is less of a chance. I get in-neighborhood emails literally at least once per week now stating there is a break in, vandalism, HOA problems, No fountain working, builders done and pulling out. C'mon now.
Also-now I'm getting aggrevated at the other posters on page 3 of this thing. I'm in my early 30's...this is the 2nd home in my life that I have purchased. We bought in 2005-how the heck would we know the mortgage crisis then? Am I in the business? Were there articles then about this? NO. It was a gravy train and lesson learned. However-they sold it REALLY well and yes, the financing sounded awesome. We have perfect credit-were not reckless and stupid people. We planned to re-finance like everyone else does so that yes COUPON JACK-we could remain in our home for an ADDITIONAL 5 years. The bank claims our value in home has DECREASED so much that it wouldn't cover what we owe.
Also-in response to LIST YOUR HOME PRICED TO SELL... fantastic idea. Why didn't I think of that? Oh yeah-I'm a licensed REALTOR in NC and SC I kinda gathered that. Kinda hard to do when pricing it to sell doesn't equate to what you owe from the original loan. We would be at the mercy of the bank who by the way said, "We think the house is worth more, the invester will wait and if it's ever to a point to be at risk for foreclosure, we'll foreclose and get more for it later after auction." WTF????
The media is lying that 'Banks will be more apt to short sell w/o the expense of foreclosing'. That's BS.
I appreciate the feedback and responses and even opinions on the first 2 pages-the other ones thereafter-it's really easy to judge when you don't know the community well or the situation. This community has been classified as a 'high end foreclosure community'...that by 2 appraisers. There is a $1M community with NOTHING around it. Do people think Ballantyne Country Club would have survived with crappy schools and hardly any restaurants and retail around it? No-it would not.
We know what and where we could have acted differently in our purchase...but we can hope to get through this situation and come out less bruised.
I think you might be missing the point here. If you choose an ARM because without the lower interest rate you can not afford or qualify for the loan then you are choosing to put yourself into a potentially bad situation. ARM's are fine for people who know they will be moving soon and a few other senarios but if you are counting on a refi to be able to continue to afford your home you have most certainly bought too much house. I am guessing you were not completely ignorant to that when you bought your house. You just chose to ignore it. Bottomline, you had not yet EARNED the house you bought and no one forced you to buy it. Sounds you are stuck and should just be grateful you do not wind up in foreclosure.
My suggestion to you is to get out there and find as many 2nd and 3rd jobs as you can, regardless of what kind of jobs they are, and EARN yourself out of this mess. If you can increase your income then you can pay down your mortgage and either sell it or wait all this craziness out. I do sincerely wish you the best and hope you can update us one day with some good news.
The rate is FIXED for a certain period (in my case it was for 7 years...the shorter the duration, the lower the int rate because risk is higher), then the rate will adjust. When you hear of all the disasters in the subprime of rates "adjusting", that is basically what I'm talking about.
OK-Thanks
We have a mortgage in the UK that we took out in 2006 when we bought our home over in NC. We didn't have a mortgage on our home here as we were lucky enough to be able to pay (my) mortgage off when DH sold his flat in London to come and live with me.In the US the lowest rate thay could offer us was 7.5% as we weren't resident. The mortgage here was a stepped variable rate and started at 3.64% (I think that was about 1% below the Bank of England base rate) for 1 year then jumped up to around the base rate the next year and so on for 4 years to max of 2% above in year 5 and 1% above the base rate for the remainder.
We have gained in this last year of our morgage due to the base rate being so low.Our payments went down from around $2000 per month to about $1000.
Hope this makes sense.I guess what I am trying to find out is whether some people over there may have benefited by the lower interest rates as we have here.
OK-Thanks
We have a mortgage in the UK that we took out in 2006 when we bought our home over in NC. We didn't have a mortgage on our home here as we were lucky enough to be able to pay (my) mortgage off when DH sold his flat in London to come and live with me.In the US the lowest rate thay could offer us was 7.5% as we weren't resident. The mortgage here was a stepped variable rate and started at 3.64% (I think that was about 1% below the Bank of England base rate) for 1 year then jumped up to around the base rate the next year and so on for 4 years to max of 2% above in year 5 and 1% above the base rate for the remainder.
We have gained in this last year of our morgage due to the base rate being so low.Our payments went down from around $2000 per month to about $1000.
Hope this makes sense.I guess what I am trying to find out is whether some people over there may have benefited by the lower interest rates as we have here.
Meant to say we took it because we hoped to be living in NC within a year as I had job offer, but then visa retrogression kicked in.
Last edited by susan42; 08-21-2009 at 10:04 AM..
Reason: sp
If you have such a good credit score then you wouldn't want to short sale if it all possible as well, would you? Doesn't that tremendously hurt your credit score?
I am a pretty sympathetic person but having a little trouble here. I do feel your frustration and do feel sorry for you but you did take the gamble and it sounds like you didn't do the research and as a result you are starting to lose. The palisades is a lovely community and if there are as many foreclosed homes as you say, then I would guess that is contributing to the breakins. Yes you shouldn't have as many as other communities but I would guess you don't. I live in Baxter Village, and while not a million dollar home neighborhood it is a reasonably middle to middle uppper class neighborhood, and it has had its fair share of breakins. It just happens.
My advice to is to find a way to sit on the house at this point in time as best you can. You don't want to do something that will hurt your credit for years. People are not going to buy your house for $450K when they can go down the street and get the equivilant house for less. It isn't about what you paid for the house or how they marketed the community to you it is about what people are willing to pay. It's all about timing. You bought high and are trying to sell low, tough for you but simple economics.
Agreed...with the above and your earlier comment about people not being able to price their homes to sell because they are unable to cover the short-fall that such a selling price would create. The simple truth is that, in large part, if people bought a house with an ARM, then they bought more house than they could realistically afford to begin with.
Your statement is quite wrong. You may not realize it, but when I bought, back in 02, differnces in payment b/w the arm and the ballon and the fixed were about 75.00. I had a 200k loan. My place as 250K, I put 50k down. My lowest payment would have been 1186(ARM) my highest was 1260. Not much of a difference. For the record, the way it was explained to me when I chose a loan was that rates would probably continueto fall. Go with the cheapest rate and refi in 5 years when I would have more than 20% equity. No, I didn't do the ARM.
Just adding some balance as people seem to think that ARM folks were saving hundreds of dollars on their monthly payments therefore they couldn't afford a traditional 30 year mortgage. That's just not true. Mortgages were SOLD(yes sold heavily) by mortgage professionals who apparently made more and got more business from these weird loans.
. For the record, the way it was explained to me when I chose a loan was that rates would probably continueto fall.
Here's the problem. 95% of people didn't ask their mortgage broker "what if rates go UP?" Many wanted to hop on the train that Govco, and anyone in the real estate business was promoting back then (ie NAR, NAHB, etc) (you better BUY now so you can cash in on annual double digit increases...)
I agree about how many in the mortgage industry are no better than snake oil salesmen. I have friends who work as loan officers and the fees they collect are rediculous...half a percent here and there add up BIG TIME. But if you can get them from an ignorant public, go at it......Higher commissions for higher fees and exotic loans (ie Liar loans, etc) Don't mean to single them out but they come to my head first....LOL
Your statement is quite wrong. You may not realize it, but when I bought, back in 02, differnces in payment b/w the arm and the ballon and the fixed were about 75.00. I had a 200k loan. My place as 250K, I put 50k down. My lowest payment would have been 1186(ARM) my highest was 1260. Not much of a difference. For the record, the way it was explained to me when I chose a loan was that rates would probably continueto fall. Go with the cheapest rate and refi in 5 years when I would have more than 20% equity. No, I didn't do the ARM.
Just adding some balance as people seem to think that ARM folks were saving hundreds of dollars on their monthly payments therefore they couldn't afford a traditional 30 year mortgage. That's just not true. Mortgages were SOLD(yes sold heavily) by mortgage professionals who apparently made more and got more business from these weird loans.
What I am specifically referring to is actually qualifying for a loan not saving money. Often people who are purchasing a home they cannot truly afford or are borderline able to qualify for will use an ARM to qualify. The reason is that when it comes to your debt to income ratio a $75/month payment equals $2,000 - $3,000 in necessary income in order to qualify. So if someone barely qualifies, they use the ARM to get their payments down as low as possible just to get in the house to begin with. I am thinking that someone in your position, who put down $50K on a $250K home really does not realise what some people were out there doing these last few years. Not sure if it comes across but that is a compliment.
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