|
Yes, there was a lot of building going on, especially in my area. My community was one of the fastest growing areas during the "boom". Some builders have tons of spec houses just sitting there and yes, a lot of the foreclosed homes are appearing in those new subdivisions. Those houses are selling for less than half what they originally went for. Houses that people were paying $300K for 3 years ago are being sold by the builders for $150K.
I'm ok with tossing out numbers. I bought my house in 2001 for $137K. A modest 3 bedroom ranch with no garage. I mortgaged $128K. At the peak in 2005 or 2006, it was appraised at $185K. I have an ARM, but it's a reasonable one and I'm actually paying less interest now than when I purchased it. It can't go up (or down) more than 2% a year and it has gone up a little and down a little, but last year it went down the full 2%. I owe about $117K on it now with 22 years to go on the mortgage. With foreclosed houses auctioning for $30-40K, it's hard to say what I could sell it for now. It's in better shape than most foreclosures, but if someone can buy the house next door for $30K, even if they have to put $50K into it to make it livable, they are way ahead of where I am. The land itself should be worth more than $30K!
My very strong recommendation to young people who are buying a house, if you are both working, is to try to get one that you can afford on only one of your incomes. Give yourself breathing space in your budget. When/if kids come along, you may decide that one of you wants to stay home or you'll find out that day care is equivalent to another mortgage payment! If one of you becomes disabled, you will still be able to make your house payments. If your spouse leaves you or you want to get divorced, one or the other of you will be able to afford to keep the house. The expense of kids is really unbelievable. I love my kids, but often think about how much more money I would have without them!
Also, when they figure out how much mortgage you can afford, they look at your GROSS pay, not your net pay. You need to look at your net pay, especially if you have money withheld for retirement, pay a lot for your benefits, etc. My net pay is much lower than my gross pay! That's how people end up paying half of their income for a mortgage, because it's half of their net income. Like most people, my mortgage payment comes out of one pay, with enough left for groceries, gas, spending money that pay period. The other paycheck pays all the other bills, with enough left for groceries, gas, spending money and savings.
|
Threaded Mode
