The housing market has definitely come to a crashing mess. I bought my house two years ago and I am one of those people who are facing the refinance mess that is going on now.
I am due to refinance this October but the rates I am getting are horrible.
When I first purchased and opted for a two year adjustable rate, I was having a hopeful feeling that things would get better and I would be able to refinance for a lower rate mortgage.
The opposite is true. Not only am I looking at paying more due to higher interest rate, but there is a risk that I might not even get a loan closed before the due date of my two-year contract, which will make my mortgage shoot up even higher when it adjusts by itself.
It is a scary situation and it seems that the federal government is not doing enough to alleviate the burden on honest working citizens.
I have heard some horrible stories and have witnessed so many others. A friend of mine has another acquaintance that is in over his head with mortgage related problems. He works and makes a decent income, but he is the only one working. His spouse does not work and so there is the problem.
When they got their house a couple of years ago, they took out some money against the house for personal improvements. Now, due to the reverse of the housing boom of the earlier part of the 2000’s the value of the house is depreciating instead of increasing. There are a lot of properties that are just not being bought, while a lot new ones are built.
Anyhow, this couple borrowed against the house and with its depreciated value, they cannot find a good loan to refinance as they are due to go into adjustable rate. If they do not come up with the negative balance that they had taken out against their house to bring the amount up to the house’s original purchase, they will not be refinanced and that is stressing this couple.
Since the woman does not work, it is also hard because their other option would have been to let the house go into foreclosure and have the wife buy it on her own name so that at least they could still keep the property. But since she does not have any income, they seem to be running out of options.
There are many more stories like these. I know another couple who own investment properties but are having a hard time refinancing since they have also borrowed against the property to run other business ventures. The couple has now moved out of their own family home and put it on sale, hoping to make some profit to pay other debts incurred from the investment property. They live in apartment now to help them cut down on bills.
The other day I was at a friend’s house when a foreclosure company showed up at her neighbor’s.
I asked her what had been going on and she told me that the neighbors, who were couples when the house was purchased, had now been divorced. It seemed that selling the house was not an option because people are not buying so they would not be making profits. Neither of the spouses wanted to keep the house since the mortgage was going adjustable. They both just stopped paying for it and now it was being foreclosed.
Homes are popping up everywhere for sale. And no one seems to buy since banks are not giving out loans. Who can fix this problem?
We need the federal government to reduce interest rates so that banks can work with hardworking citizens who have earned their pay. There is no reason for people to have worked hard, saved up to buy a house, only to turn around and have the house foreclosed due to ridiculous jump in interest payments. The feds need to do something soon because the economy is being greatly impacted as well.
We the buyers are also to BEWARE. There are a lot of mortgage companies that come up with loan programs that supposedly look good, but you need to read the fine prints. Do not sign any paper until you are completely sure of what you are really getting. If possible, pay some money down and do not take any money against a newly purchased property until you know for sure the direction of the wind. Live within your means; don’t splurge! You will enjoy the fruits of your labor when the fruits are ripe.…