So upset right now!!!

iVillage Member
Registered: 08-23-2005
So upset right now!!!
14
Thu, 04-06-2006 - 3:55pm

I got a call from our loan offeri last night and their appraiser had said that our property is not worth what we paid for it.

lvhunnie2005

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Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
Fri, 04-07-2006 - 2:25pm

WOW!!

Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
Fri, 04-07-2006 - 2:57pm
You will find something I'm sure.
iVillage Member
Registered: 07-11-2001
Fri, 04-07-2006 - 4:11pm

It may not seem fair now, but in the long run you will be happy you didn't overpay for your property. Strangely enough, I just got off the phone with a friend of mine who worked as a financial consultant for Ernst & Young for 10 years, and currently a financial planner (has been for over 3). His entire family is in the finance business.

We were talking about the number of homes that are on the market and for sale. We talked about those folks who may not be able to make their payments on their 5-year interest only arms due to the ever increasing interest rates by the Feds. A 30-year fixed is currently at 8-9%, where as a year ago it was 5-6%. That's a fairly hefty increase. He predicted that next year there will be a number of foreclosures from those who took those 5-year arms in 2001 and cannot afford the new mortgage rates with the new interest rates. Paying 6% on a $100,000 is a lot different than paying 9%. At 6% the monthly payment on a 30-year fixed is $599.55 (that's not including Escrow, or PMI if you didn't qualify for a conventional loan). At 9%, it's $804.62. That's already over $200 a month, and that's not including taxes etc.

For many, they base their ability to 'make the mortgage' each month based on the payment. If it is forever increasing, as for a few, they may soon not be able to pay. As my friend said, banks are in the money business not the real estate business so they will foreclose and sell those properties for what they can get. I am also in a big boom area, and home prices have skyrocketed. He forsees a lot of properties for sale at maybe less than they were paid for and recommended anyone considering buying a home to wait a year.

This could be a blessing in disguise. Sorry to hear the owners won't budge. Make them your offer and leave it at that, or find out the sales history in the area. A lot of things can affect the value of a home. They look at the city's property tax evaluation, mine was really low compared to the sale price. They look at the recorded recent sales. There hadn't been any recent ones in my area, so it was hard to get a comparison. Find out if there are any other pending sales in the area and what those buyers are paying. That's what helped me with my appraisal was that another person was paying $1000 more for exactly what I was buying.

Beach

iVillage Member
Registered: 04-11-2005
Sat, 04-08-2006 - 12:51am
I'm sorry.........that stinks!!!
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Lara

 

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