the home 2 doors down from me just sold for less than the amount I owe on my mine..and our homes are almost exactly alike..4 other homes on my block have for sale signs and 2 of them lowered their asking prices....can I just leave the house and give it back to my bank....?
2006-10-13 05:59:56 · 16 answers · asked by mayigniteunderpressure 3 in Business & Finance ➔ Renting & Real Estate
I was told by many people at the time I bought it that real estate was a great investment and it only goes up....why should I make pay for something plus pay interest on the debt that is worth less than I paid for it..I feel ripped off....bankruptcy is best..just like some of the airlines did...then thye can start over...
2006-10-13 06:14:57 · update #1
First off any investment there is not a grantee that you will make money.
Now for being up side down hear is why and yes i would be pissed off also.
http://www.breakingbubble.com/index.htm
2006-10-13 17:02:10 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Real estate, as an investment carries the same risks as ANY kind of investment. One shouldn't get into the market without knowing about it.
Blaming the agent is like blameing the used car salesman if something goes wrong with the car.
Your agent didn't exactly LIE to you. He was probably stating what most people believe. In general, real estate values tend to grow. But not always. There is no guarantee. Imagine someone that bought a brand new house in New Orleans, two weeks before hurricane Katrina hit.
Plus, property values go up and down based on all kinds of economic factors. As investment, it is still risky, even though the risks are traditionally low.
However, as housing, you lose ABSOLUTLE NO MONEY as long as you still live in the house, make your payments, and eventually pay it off.
If you are going to sell the house, then be prepared to take the loss. If you are going to let the bank reposess the house, remember that they will have to sell it, (for the loss) and you will STILL owe them the difference. If you choose to file for bankruptcy, then be ready for the fact that you will probably not be able to buy another house for, at least seven years. (or finance a car, or get a credit card with a reasonalble interest, or ANY kind of credit transacation)
I have sympathy for your situation. I have NO sypmathy for your blaming others for your situation.
2006-10-13 06:45:28 · answer #2 · answered by Vince M 7 · 2⤊ 0⤋
Do you have to sell. you can wait it out. Over time you will gain 2% at least. over a five year span, you will be ahead. Now it depends on how much you leveraged also. So lets say your mortgage is 240K and you put down 20% at 60K. That totals 300K. Thats is what you will get compounded interest on, the whole 300K. Meanwhile if you had put the 60K in savings you would have earned only 2% on the 60K. As you can see the spot you are in is better then a savings. Unfortunaltely the real estate market isnt 100% secure. If the only factory in town closes down everyone moves, you investment/home drops badly.
2006-10-13 09:51:20 · answer #3 · answered by cjkloanguy@yahoo.com 2 · 0⤊ 0⤋
Yeah it sucks. This is why you have to do very detailed research before you buy. You are now in a situation called negative equity.
You can give it back to the bank, this is called voluntary repossession. But here's the bad news: First they are going to take your home, and then they are going to sell it for about 80% of what it is worth, to get a quick sale. Then they are going to pursue you for the difference between their sales price, and what you owe, together with fees, penalties, and interest.
You could file bankruptcy, but this is going to prevent you buying another home for a good five to ten years. Also you will pay higher interest on credit cards, loans, insurance, and other financing. This will cost you thousands over the years.
The best thing to do is to stay put and wait for the property to go up in value. Over time they almost always go up. The location and the condition of the property will determine how quickly it goes up. You might want to do some research into the kinds of improvements you could do to the home to improve its value.
2006-10-13 06:48:38 · answer #4 · answered by ZCT 7 · 2⤊ 0⤋
I live in Michigan, and work in mortgages. I have seen several situations in the last year that are just like yours. The reason this is happening is, that your home is only worth what someone is willing to pay for it. This is reflected by the homes on your block that have recently sold. If homes sit, and don't sell, they have to drop the price if they want to sell. You weren't ripped off, it's just how the housing market works sometimes. In time, the economy will change and so will the value of your home.
2006-10-13 06:20:28 · answer #5 · answered by Justin 3 · 3⤊ 0⤋
Is the mortgage also calculating in the interest rate? Perhaps this could be what the price is. Some mortgages have the interest rates tallied into the payment, so paying $125,000 for a $75,000 house isn't too extreme.
Also, this isn't a good market for selling homes right now, and could be the reason why the prices are being lowered. Talk to your bank, or real estate agent in the area.
2006-10-13 06:09:57 · answer #6 · answered by rouschkateer 5 · 0⤊ 2⤋
Well for one, you said on another question that you loaned 125% of the value so you could 'redecorate.'
And you should pay on it becuase you ASKED for that dollar amoun and the bank paid it. Its not their fault your invest ment is not paying off.
You CANNOT just 'turn the deed in'...they'll sell and then sue for the difference. YOu'll owe it and not have a house.
I think on the other question the difference was 15K? Within a year or so, inflation and market increases should cover that...but you'll still need a cushion for closing costs and realtor fees.
Hold onto your house for about 2 years and you'll be fine....
2006-10-13 06:58:03 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Unfortunately that's happening a lot in this market. Too many people got 100% loans, interest only loans, and variable rate loans over the last few years while the market was booming. The market has slowed and rates have gone up now. It's the 70's all over again. Don't do anything stupid. The market will recover.
2006-10-13 06:27:31 · answer #8 · answered by Karen R 3 · 2⤊ 0⤋
this methodology will help the banks greater that the human beings preserving the mortgages, because of fact the industry fee of assorted the eligible homes are much less that the loan quantities. they are attempting to get human beings to stay and proceed paying , whilst in actuality maximum could be greater desirable off in the event that they only waked away and enable the banks take the loss.
2016-10-19 08:09:32 · answer #9 · answered by ? 4 · 0⤊ 0⤋
No need to panic. Depending upon where you live housing prices may be still be declining. However, this will change in the next year. If you need to move, then it sounds as if you will need to walk away from it. See if an investor will buy it from you or you may be able to deed it to someone who can make the payments. This site has many reports that will answer that will most likely answer most of your questions -- www.paynotaxesforlife.com
2006-10-13 06:22:43 · answer #10 · answered by Pay No Taxes For Life 2 · 0⤊ 2⤋