House Prices

[ROCKETW19]

to elaborate even more:

prime= usually a 650+ credit score, w/ no bankruptcies or major adverse credit problems (charge offs, late payments, collections), and good mortgage history

subprime= 620 and below. usually people who have a recent bankruptcy, maybe very little credit history, or spotty payment history for the mortgage.

thanks, im prime!

i have a nother question if you dont mind? i have a friend that is gonna do a thing called "short sale" hopefully you know what this is cuzz if i tryed to explain it you wouldnt understand. anyways question is he says his credit will be fine after its over and i dont care but i dont belive him is that true? wouldnt that be just like forclosure or something? there has to be some penelty or i will short sale my house to my mom just to have a cheaper house payment. i would think everone would be doin stuff like that.

[redsquirrel]

so they are defaulting because they are on a variable rate that runs in line/perhaps 1% above prime/base rate, which has made their repayments impossible?


All the houses on the market aren't they also looking to buy elsewhere or you mean because of the forced sales?




Cool post

Well sort of. As I said, prime rate was at 4.25% 4 years ago, so a ton of people took out Helocs. Now, it's at 8.25, so the payments on these loans have DOUBLED. In addition, there are people who have an adjustable rate first mortgage that is adjusting or will very soon. And, the way adjustable mortgages are structured is, you have an index (like the LIBOR) that is added to a margin and that equals the total note rate. Well, since these people took out these mortgages, the margins have steadily increased. 2 years ago, the LIBOR was at 3.1. This week it is at 5.28. And, when these mortgage payments continue to increase, there is less chance of homeowner making their payments on time.

Some people are looking to move. But, I think the majority of sellers have seen rates climb over the past few years, and think if they want to get into a better house then they should sell while rates are still pretty low. The media doesn't help either when they are scaring investors into not buying the paper, and homeowners into not selling. It seems to be working...there are several houses in my subdivision that were for sale just a month ago, and have been taken off the market.

[redsquirrel]

thanks, im prime!

i have a nother question if you dont mind? i have a friend that is gonna do a thing called "short sale" hopefully you know what this is cuzz if i tryed to explain it you wouldnt understand. anyways question is he says his credit will be fine after its over and i dont care but i dont belive him is that true? wouldnt that be just like forclosure or something? there has to be some penelty or i will short sale my house to my mom just to have a cheaper house payment. i would think everone would be doin stuff like that.

In plain terms, he is basically negotiating with his mortgage company for them to take less than he owes them. For example, lets say I owe my $100k on my mortgage. Someone offers me $95k, and I take it. That's a "short sale". Well, I still have to come up with that $5k to pay the rest of the mortgage balance owed. I'm not sure how he is calculating that his mortgage payment will be less. There is absolutely NO WAY that his credit will be "fine". He is pretty much settling on real estate,which in an underwriters' and credit bureaus eyes, will be looked upon almost as a foreclosure. So, in simple terms: HE IS SADLY MISTAKEN, and will have to pay the remainder

[ROCKETW19]

In plain terms, he is basically negotiating with his mortgage company for them to take less than he owes them. For example, lets say I owe my $100k on my mortgage. Someone offers me $95k, and I take it. That's a "short sale". Well, I still have to come up with that $5k to pay the rest of the mortgage balance owed. I'm not sure how he is calculating that his mortgage payment will be less. There is absolutely NO WAY that his credit will be "fine". He is pretty much settling on real estate,which in an underwriters' and credit bureaus eyes, will be looked upon almost as a foreclosure. So, in simple terms: HE IS SADLY MISTAKEN, and will have to pay the remainder

ya i figured there was something wrong or everone would do it! thanks for you time!

[Shibby]

Owning a house seems like such a horrible thing to do lol.

[Stonecold54]

Owning a house seems like such a horrible thing to do lol.

yep worst thing you can do besides renting, lol. :D its like having a girlfriend or being married, :woot:

[dreamgirl]

out here in cleveland the market is terrible. houses are on the market about a year and they get marked down over and over to try and sell. I'm just really glad Im not looking to move at this moment.

[beefcake]

There's a house across the street from me that hasn't been able to sell in almost more than a year. I laugh when I think about my old landlord that kicked me out so he could put his house on the market and it hasn't sold since even with the $50k drop in price. I've been told the market will change next year and those of us who have stayed afloat will reap the benefit.

[Shibby]

yep worst thing you can do besides renting, lol. :D its like having a girlfriend or being married, :woot:

I know people say that renting a house is like throwing money away, but I don't know if I could handle the stress of owning a house.

[beefcake]

I know people say that renting a house is like throwing money away, but I don't know if I could handle the stress of owning a house.

It's really worth it in the long run, but it is best to wait til you're ready and not force the situation like a lot of people have.

[Mr I]

the answer seems to be to get a fixed rate while rates are reasonable

[redsquirrel]

There's a house across the street from me that hasn't been able to sell in almost more than a year. I laugh when I think about my old landlord that kicked me out so he could put his house on the market and it hasn't sold since even with the $50k drop in price. I've been told the market will change next year and those of us who have stayed afloat will reap the benefit.

The market will be better next year, but not a whole lot better. Actually, it won't get good again until 2009.

[ROCKETW19]

The market will be better next year, but not a whole lot better. Actually, it won't get good again until 2009.

i hope your right cuzz i have a 5-1 and im already into it 1 year so 4 more years untill i will need to get a good rate.

[redsquirrel]

the answer seems to be to get a fixed rate while rates are reasonable

Not necessarily. You can get a 3 YR or 5YR ARM at still a pretty reasonable rate. In fact, rates have really dropped in just the past week.

Rates will continue to go down, and bottom out in 2009. The Fed is going to have to lower the prime rate in order for the economy to recover. They just can't throw money at all of these lenders and into the reserve and think everything will be alright. True, some lenders can't sell their own paper. But, the other problem is that if you keep rates high, then people who are struggling to pay their bills obviously can't afford an even higher rate. So the Fed is going to have to drop prime rate.

[redsquirrel]

i hope your right cuzz i have a 5-1 and im already into it 1 year so 4 more years untill i will need to get a good rate.

I've got a 3 YR that adjusts in '09...No biggie really, it's at 4.875% right now, and can only go up to 5.875% at the 1st adjustment....which could be lower than rates at that time.