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A mortgage is not equivalent to this type of deal. If I want to sell my house tomorrow, I can. There's nothing stopping me. There must be some negative aspect to the contract these people sign which makes it highly undesirable to sell before 25 years have passed. They have this and a mortgage.
Back in my day people didn't sell houses every 10 years
My parents lived in their house for almost 40
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"The man who sleeps on the floor, can never fall out of bed." -Martin Lawrence
Back in my day people didn't sell houses every 10 years
My parents lived in their house for almost 40
Sometimes that isn't the best choice for various reasons, sometimes it is.
Regardless, that's a personal choice. This is a different situation. They made an agreement to get the house either cheaper or with mortgage approval terms they'd have been denied on the open market.
Sometimes that isn't the best choice for various reasons, sometimes it is.
Regardless, that's a personal choice. This is a different situation. They made an agreement to get the house either cheaper or with mortgage approval terms they'd have been denied on the open market.
I'm not denying that
I'm just saying times have changed, people didnt sell their houses every 10 years
So to stay for 25 back in the day was a a non-issue, seems like its a big deal now (I wonder why )
Hell, ARMs are still a new thing as far as I'm concerned.
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"The man who sleeps on the floor, can never fall out of bed." -Martin Lawrence
That's what got me. Who in their right mind would agree to something like that. 5 years, maybe but... 25?!
No.
They don't have to live there 25 years. I believe they can move out whenever they want, and sell whenever they want, but the terms of the contract are that the loan is forgiven if they stay the whole 25 years. If they move out after 5 or 10, that's cool. Just will have to re-pay some of the forgivable loan.
There is a difference between the program and a 30 year mortgage.
( program that requires the owners to live there for 25 years.)
That's an occupancy agreement that I would never ever sign.......comes with penalties.
I don't see it as a penalty. It's just something that doesn't allow them to keep all the free money they would be given by the city if they did stay the full 25 years.
Instead of seeing it as a penalty if you leave early, you see it as a gift you get if you stay 25 years.
Stay 1 year - no gift. Stay 10 years - partial gift, stay 25 years, full gift.
A very very bad deal indeed. So much can happen in 25 years. What if the neighborhood you make that 25 year deal in turns ghetto in 5 years. Or a change in jobs, divorce, etc. A deal for suckers.
In similar programs that I'm familiar with the 25 years is the point at which the grant for the down payment is forgiven. If you sell prior to that time you have to repay outstanding balance on the grant
I don't see it as a penalty. It's just something that doesn't allow them to keep all the free money they would be given by the city if they did stay the full 25 years.
Instead of seeing it as a penalty if you leave early, you see it as a gift you get if you stay 25 years.
Stay 1 year - no gift. Stay 10 years - partial gift, stay 25 years, full gift.
Exactly.
I think that initially, it’s a last ditch mechanism to allow for someone to acquire property. As circumstances change, if the owner sells, they can forfeit the deal, and still make good on the value of the sale in good time. People get promoted, come into money different ways, and circumstances dictate whether it’s worth staying or leaving, and forfeiting on the deal. I’m more concerned with their reason for worrying about their home situation.
Heck, people buy expensive cars and lose out on selling them over time, and vast sums of money go down the drain that way.
If the couple repaired at a cost of 100k after Sandy, the house has probably increased significantly since then. The value is OK; the neighbors not.
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