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Old 11-29-2008, 04:43 AM
 
9 posts, read 26,916 times
Reputation: 11

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Need some advice and opinions from others on our housing situation. We've made the decision to leave our current house as it's a sinking ship for a variety of reasons. Our options are to go back to our rental property when the lease is up in a few months. We'll end up saving a lot more money this way, but it's a lot smaller and older of a house than what we're used to. It's also going to need some $$ put into to upgrade it. The other option is that we are preapproved to buy another house. We can pretty much go anywhere we want in the valley. We're looking at Ahwatukee and Chandler for the most part. I'm really in a quandry as to what to do. If we buy another place, we run the risk of having the market further collapse and have another home that we owe more than what's valued at. But we'd be there long term and hopefully be able to ride out the mortgage crisis. We'd also be able to take advantage of the great interest rates and home prices right now too. I need some opinions and advice on this. Has anyone else been in this situation? Please let me know. Thanks!
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Old 11-29-2008, 04:56 AM
 
Location: Chandler
191 posts, read 612,017 times
Reputation: 63
When you say leave your current house, does that mean you own it and cannot afford the mortgage? would you be walking away from a possible foreclosure? Or are you renting now? It makes a difference in your situation and the best answer.
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Old 11-29-2008, 05:03 AM
 
9 posts, read 26,916 times
Reputation: 11
We own the current house, but can't afford the payments. We'd try a short sale first, but it's doubtful that would go through since there's so many vacant homes for sale in the area already. Foreclosure looks like the only other alternative after that.
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Old 11-29-2008, 06:51 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,783,384 times
Reputation: 3876
Quote:
Originally Posted by MightyHet View Post
We own the current house, but can't afford the payments. We'd try a short sale first, but it's doubtful that would go through since there's so many vacant homes for sale in the area already. Foreclosure looks like the only other alternative after that.
I must be missing a piece of information. You stated that you cannot afford the payments on the current home, but you are preapproved to purchase another home.

It's difficult to project the market movement, but the current trend is still down in price. Interest rates have come down, and the stock market seems to be rebounding a little. Much will depend on how much confidence the country has in Obama as he takes office.

There are mortgages available out there for those with good credit and a down payment, and the interest rates are low. I believe the only real drawback to more people buying homes is the lack of confidence in the economic future of the country.

Many sellers, who don't have to sell, have taken their homes off the market, deciding to wait until the market turns around. They've just decided that enough is enough. They aren't going to compete with the foreclosures and give their house away.

There are many bargains out there today if one knows how to find them, and is prepared to buy them quickly.

In your case, if you're preapproved, then you would need to buy another house before you sell your current home because if you go the short sale route you will lower your fico score, and if you go to foreclosure it will get lowered even more, and in either case you'll have a difficult time purchasing for a few years.

One option, if you can swing it, is to rent the home you're currently in, and purchase the new one. You probably won't get positive cash flow, but if the payment on your new home and your negative cash flow on your current home is such that you can carry it, then you should be in good shape. In 10 years I expect that you'll see appreciation on the three homes that you own.

I've changed my business plan from being a full time realtor to being a full time investor. I still work with buyers and buyer investors, but I don't market for listings. When I do short sales for clients, I utilize and pay a short sale negotiating company to get the job done more efficiently. I buy houses and resell them to rehabbers, or I'll rehab them myself and sell it retail at a discount to the market. I am holding one property to rent that I bought this year, and plan to hold one or two properties each year, using a 10 year holding plan.

If you examine your situation very closely, and see if you can hang onto the house you have, and buy another one at a deep discount, then you may be better off.

It's very difficult to give advise to someone without knowing all the details of their situation, so what I'm mentioned may or may not work for you. You need to examine many alternatives.
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Old 11-29-2008, 09:15 AM
 
930 posts, read 2,424,035 times
Reputation: 1007
Quote:
Originally Posted by MightyHet View Post
Need some advice and opinions from others on our housing situation. We've made the decision to leave our current house as it's a sinking ship for a variety of reasons. Our options are to go back to our rental property when the lease is up in a few months. We'll end up saving a lot more money this way, but it's a lot smaller and older of a house than what we're used to. It's also going to need some $$ put into to upgrade it. The other option is that we are preapproved to buy another house. We can pretty much go anywhere we want in the valley. We're looking at Ahwatukee and Chandler for the most part. I'm really in a quandry as to what to do. If we buy another place, we run the risk of having the market further collapse and have another home that we owe more than what's valued at. But we'd be there long term and hopefully be able to ride out the mortgage crisis. We'd also be able to take advantage of the great interest rates and home prices right now too. I need some opinions and advice on this. Has anyone else been in this situation? Please let me know. Thanks!
Hey, I think I just figured out why our housing market is going to hell.
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Old 11-29-2008, 09:24 AM
 
Location: Southern Arizona
9,601 posts, read 31,710,724 times
Reputation: 11741
Quote:
Originally Posted by Beena View Post
Hey, I think I just figured out why our housing market is going to hell.
Great point, Beena . . . explains why so many feel justified in seeking help from the taxpayers?

Damn shame, isn't it?
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Old 11-29-2008, 09:58 AM
 
3,632 posts, read 16,171,289 times
Reputation: 1326
Can you do a loan modification? I am looking into that with both mortgage companies as they do them themselves. That might help you to stay in your house. I don't see how "walking away" from the house will benefit your credit to buy another one. I'd take another look at what Capt Bill said.
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Old 11-29-2008, 09:58 AM
 
203 posts, read 491,514 times
Reputation: 205
Ridiculous. People can't afford their current home so they want to buy another one. Say hello to years more of further house price reductions.
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Old 11-29-2008, 10:01 AM
 
3,632 posts, read 16,171,289 times
Reputation: 1326
Quote:
Originally Posted by Skywayy2001 View Post
Ridiculous. People can't afford their current home so they want to buy another one. Say hello to years more of further house price reductions.
Very true. I'd like to see some home appreciation some decade with my home. People really need to do what they can to stay in their home and stop bringing us all down. It's just not fair. But then again I can understand the ones that have lost their jobs and such.
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Old 11-29-2008, 12:45 PM
 
Location: Gilbert, AZ
1,384 posts, read 4,295,875 times
Reputation: 1037
I don't know the entire story of what happened, but my neighbor did the same thing. They couldn't afford their home, so they bought another one they could afford in Queen Creek before their credit went bad and the house they lived into went forclosed. Now that seems really sneeky and wrong to me, but I really don't know much and have absolutely no advice to give, sorry.
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