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Today I talked with someone who has one of "those" mortgages, the ones where you only pay the interest payments for a certain number of years and now in about 5 months her payment is going to triple because now the principal is coming due also. I thought those loans were part of the recession problem and no longer given out. Don't know how they even qualified for this mortgage because their income is very limited. There is no money to fix or maintain. I fear a foreclosure is in their future.
Today I talked with someone who has one of "those" mortgages, the ones where you only pay the interest payments for a certain number of years and now in about 5 months her payment is going to triple because now the principal is coming due also. I thought those loans were part of the recession problem and no longer given out. Don't know how they even qualified for this mortgage because their income is very limited. There is no money to fix or maintain. I fear a foreclosure is in their future.
How many of those loans are still out there?
Nothing wrong with that, I did a 4% interest only loan because I didn’t want to screw around with the banks so I borrowed from my dad. I have no desire to waste thousands on BS like an appraisal or a bunch of other hoops that accomplish nothing. I paid down the bulk of the loan last month and will finish it off later this year. It was just a short term bridge loan between investments paying out, so it made the most sense.
Maybe not right for everyone but when it’s some tiny amount like $115K it makes sense.
The issue with in some markets the luxury market, like Vegas right now, isn’t the inventory or time on market, it’s the outdated styles. There are tons of $1M homes for sale so inventory is very high compared to your average and meh houses, but there are very few modern style homes whatsoever. The inventory is tiny and buyers in that realm don’t want an old, 12-20 years dated home that isn’t modern, they want something that reflects current trends. So those old houses sit. Ten years ago, there was one builder already building modern homes and those are of great appeal, but the ones building crappy looking Mediterranean or southwestern style homes... their buyers can’t sell them quickly.
Houses are selling fast at record prices here in S-E Michigan. Our son found the same dynamic when he rocated to Pittsburgh early this summer. I agree that Real Estate is cyclical but I have not yet seen evidence of any slowdown indicating the market is approaching its peak.
Houses are selling fast at record prices here in S-E Michigan. Our son found the same dynamic when he rocated to Pittsburgh early this summer. I agree that Real Estate is cyclical but I have not yet seen evidence of any slowdown indicating the market is approaching its peak.
While I agree that lending standards are more strict, our economy is very uncertain. And with more people than ever living paycheck-to paycheck, and with more people taking out more debt than ever before, there's going to be a surplus of people who cannot afford to pay for their mortgage if/when a recession hits. (depending on the recession) Even though lending companies are more strict with their standards, they cannot help people's stupidity with debt and with people living beyond their means.
And as soon as you think you are stable, something comes in and causes your situation to be shaky.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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Quote:
Originally Posted by Pat Answers
Today I talked with someone who has one of "those" mortgages, the ones where you only pay the interest payments for a certain number of years and now in about 5 months her payment is going to triple because now the principal is coming due also. I thought those loans were part of the recession problem and no longer given out. Don't know how they even qualified for this mortgage because their income is very limited. There is no money to fix or maintain. I fear a foreclosure is in their future.
How many of those loans are still out there?
Who knows.
Sounds like a balloon loan thru a private sale. Does not sound like a conforming loan since 2008.
Higher end of the market seems to be struggling. Since it's September, the peak spring/summer selling season is winding down as well.
Locally, it was a busy selling season. Prices in NW NJ plummeted during the recession and still haven't recovered but it's picked up over the past couple years. Lack of public transportation and high property taxes also contribute to keeping prices down.
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