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Early 2003 was not "top of the bubble." That came in about 2006. But things were ramping up. That is for sure.
If you are going to stay in the house and the area is not filled with foreclosures you should do ok. If the neighborhood is filled with foreclosures it will take @ 5 or so years to get the value moving upward.
Housing was overbuilt due to the push for low income people to get housing.. no money down, and 2 million mortgages never saw the first payment . The so called buyers were freeloaders.
Count your blessings.. you bought in 2003, wasn't that bad .. it was 2005 and 2006 that was the peak of the bubble.
Timing markets ain't for me. I bought a house in 1982. In 1986 it was worth 30% less than I paid for it. When I sold it in 1998 it was worth 20% more than I paid for. Not much of an ROI, but it was a home; not an investment.
Let's say you bought a house, like it did, in early 2003.
I spent a year looking, and thought I did the best I could at the time, I've never missed a payment, even when my wife was out of work for years ast a stay at home mom. The value nearly doubled by 2006, and I was a genius in my wife's eyes. Now, we are underwater on the house, and I am the fool that is to blame for wasting our savings. Suppose, my wife wanted to get a divorce for my financial incompetence.
Would she have a case, or are macroeconomic factors to blame?
Discuss.
(Hint. This is not a real estate thread.)
How much your house is worth only matters when you want to sell it. For one do you like the house? Is it where you want to live? Like others said, you have to live somewhere, if you were renting, it would cost you and you can't make many changes and improvements.
Let's say you bought a house, like it did, in early 2003.
I spent a year looking, and thought I did the best I could at the time, I've never missed a payment, even when my wife was out of work for years ast a stay at home mom. The value nearly doubled by 2006, and I was a genius in my wife's eyes. Now, we are underwater on the house, and I am the fool that is to blame for wasting our savings. Suppose, my wife wanted to get a divorce for my financial incompetence.
Would she have a case, or are macroeconomic factors to blame?
Discuss.
(Hint. This is not a real estate thread.)
That would depend on your states divorce laws, here it wouldn't matter because it's no fault.
Since you won't know what your house is really 'worth' until you put it on the market and get offers this is all moot. Are you looking to move now? Then maybe you are a fool for selling low, unless it's an emergency and you have no choice then you are a victim of the economy/housing bubble. If not, you are a genius for giving your wife and kid a home since 2003 .
Besides -- the wife is going to end up with that house if she wins custody of the kids and that would like be the case. So then it will be up to her to have the financial smarts and decide how to pay down the mortgage.
In most cases, if you put 20% down and made 10 years of payments, you're not going to be underwater unless you saw your house as an ATM and borrowed money for vacations and whatever and now have nothing to show for it.
You would only have 20 more years with a fixed rate mortgage - and if the mortage was affordable back in 2003, it should still be affordable.
What I would do in such a case is speed up the payments - and maybe refinance in another 5 years to get the payment lowered and then still pay extra.
Zillow had the house we just sold estimated at almost $200,000 less than we ended up selling it for, so I wouldn't put too much in stock by them. We bought it in 2006 and ended up coming out about 10% ahead of what we put in it when everything was said and done. On the other hand, we just purchased a home for about $75,000 less than the people paid for it in 2005. I felt really bad for them. Not bad enough to pay more, but I did feel sorry for them. We saw a lot of cases where people were taking a bath. The number of short sales and foreclosures was mind boggling.
Unless your wife was either not your wife or in a coma at the time of your house purchase, any loss is just as much her fault as yours. She needs to get a grip. It was just a bad time in the market. A lot of people made the same mistake - they viewed their house purchase as an investment instead of a place to live.
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