270,000 homebuyers who bought in 2022 are underwater on their mortgage

[scarabchuck]

Originally Posted by Listener2307

Congratulations. Maybe.

People who refinance their homes rarely come out ahead. That's because the money they save each month is minuscule and it simply goes into the spending pile. And - usually - the homeowner has just extended the payoff date, sometimes by years.


Measuring equity in 4-figure/few month increments doesn't make sense in a market where selling expenses are what they are. Add in actually negotiated selling price and typical 7% fees of various sorts and your equity can rapidly disappear.


I am a fan of paid-for real estate, so I worked to pay my mortgages off rather than refinance. We've been mortgage free since 2008 and will never have a mortgage again.
FWIW, I don''t think we are seeing some sort of real estate bubble like we saw in '08. Prices may recede a bit, but I don't see a collapse coming. Activity will decrease because of rising interest rates, but homes will remain very expensive to build, holding the price up.

I think it's better to pay more on the principle every month, and or make a few extra payments a year.

[beachmouse]

Originally Posted by Listener2307

Congratulations. Maybe.

People who refinance their homes rarely come out ahead. That's because the money they save each month is minuscule and it simply goes into the spending pile. And - usually - the homeowner has just extended the payoff date, sometimes by years.

It depends on how you’re doing it- going from a 30 year note to a 15 year note in 2003 when interest rate fell meant we ended up paying $100 more a month and shaved 13 years of the length of time we’d spend paying for the house. IMO, one of the better financial decisions we’ve made.

The 15 year note also puts you into a position of paying down principle a lot quicker- the amortization table for a 30 year mortgage really front loads the interest part of the payment into the first ten years of the note.

But then so many homebuyers don’t know what an amortization table is, much less look at it in the giant pack of mortgage documents. It’s all about ‘unlock your home equity!’

[mirage98de]

Government will put programs in place to allow people to stop paying their mortgages for years to avoid foreclosure.

Especially if they are non-white, lgbtqxyz…etc.

Just you wait and see. This time it really is different.

[Mikala43]

5.95 million homes were sold in 2022.

270K is a very small percentage.