DH and I bought our home in 2006 in the Midwest. According to multiple publications, our geographic area was one of the few areas in the country that was not experiencing a real estate bubble - prices and sales were directly related to true population growth.
We put 30% down and took a 15 year note. We got a great deal because our home is in an excellent school district and needed work. We put an additional $30,000 (cash - not financed!) of materials (and our own sweat equity) into it. We have also tried to pre-pay our mortgage when we had extra money (we don't have a pre-payment penalty in our mortgage)
Our home has lost more than 50% of its 2006 value. It is now worth exactly what we owe on it. If we had to sell today, we would not only lose the money we spent on improvements, but we would also have to pay the realtor fees out of our pocket. Our home cannot sell for enough to pay both the remaining mortgage balance and realtor fees.
Our neighbors and best friends lost their jobs and are being foreclosed on next week. Their story is like ours - same value and same mortgage debt. They couldn't sell because they owe the same amount as the value of their house. They will be lucky to negotiate a short sale. They lost over $150,000 in equity in the last four years. And, of course, they were turned down for a loan modification last year because they were current on their mortgage. (It is BoA)
I am distraught. We are ok for the time being because we don't have to sell, but we are losing our neighbors. We just keep paying our mortgage and hoping that we will pay down enough debt so that, if we have to sell, we can do so without having to pay out of our pocket.
We thought we were doing everything right - we did our research, bought a home that was affordable, negotiated a great deal, bought in an excellent school district, put more than 20% down, never took the equity out of our home, funneled cash into improvements, and have done the improvements ourselves to minimize cost and maximize equity.
What happened here???? Arrrrrrrgh! Are people really saying that the recession is over . . .. because I am not seeing it.
Asked by Anonymous at 2:23 PM on Feb. 11, 2011 in Politics & Current Events
Answer by grlygrlz2 at 2:28 PM on Feb. 11, 2011
Answer by Anonymous at 2:29 PM on Feb. 11, 2011
Answer by Anonymous at 2:30 PM on Feb. 11, 2011
Answer by mrsmom110 at 2:31 PM on Feb. 11, 2011
Answer by gdiamante at 2:37 PM on Feb. 11, 2011
Answer by gemgem at 2:38 PM on Feb. 11, 2011
Answer by MommaClark3 at 2:50 PM on Feb. 11, 2011
Last month was another wave of filing foreclosures...
If you are an investor, this may be a good time to buy.... We are in real estate for the longhaul... The properties we own are rentals we have included in our long term investment portfolio. It's not something to rush into, but it IS something that could be worth buying "low", holding on for 15-20 years, etc.....
Answer by grlygrlz2 at 2:53 PM on Feb. 11, 2011
Answer by grismelda at 3:27 PM on Feb. 11, 2011