Are we stuck for now?

[Anonymous]

We have a house that we paid 1.25k right before the crash. We owe a little over 1k and our monthly payment is 7,000. (2 mortgages) I'd really like to sell it but we have so little equity that by the time we pay closing costs and realtor fees I feel like we will lose the little money we have in it. Has anyone else been in this situation. I'm thinking we just have to wait a few more years until it appreciates a little more and we get more equity. Would moving to a 850,000/900,000 help if we could? The problem is we probably wouldn't have any down payment because of the closing costs and other fees, or very little.

[Anonymous]

We are in a similar situation w/ a house we bought for 1.2 million and a mortgage a little under 1 million. We ran the numbers at one point and it doesn't make sense for us to move. That said, your mortgage seems really high. Have you refied since you moved in? We have our mortgage spilt into two; one under $760k and the other a HELEC (we pay well above the minimum interest payment so the principle decreases) and our combined mortgage is about 5k. Our mortgage was 7k when we moved in '07 but refinancing decreased it dramatically.

[Anonymous]

OP - you failed to mention what you think you can sell it for?

[Anonymous]

Also just FYI 'k' stands for 'thousand.'

[Anonymous]

It's very difficult to refinance if you have little equity.

[Anonymous]

Anonymous wrote:We have a house that we paid 1.25k right before the crash. We owe a little over 1k and our monthly payment is 7,000. (2 mortgages) I'd really like to sell it but we have so little equity that by the time we pay closing costs and realtor fees I feel like we will lose the little money we have in it. Has anyone else been in this situation. I'm thinking we just have to wait a few more years until it appreciates a little more and we get more equity. Would moving to a 850,000/900,000 help if we could? The problem is we probably wouldn't have any down payment because of the closing costs and other fees, or very little.

It should be 1250k or 1.25 million. At any rate I think ppl understand what you meant. If you can't get any equity out of your home I think you are stuck. If your intention is to purchase another home at 800-900k range, you' 'll need 20% down payment in addition to having 12 months in reserves bc they do not offer piggy back loans for at least jumbo loan status. I am currently purchasing in the 900k range and that is what Suntrust requires...which I think is ridiculously high when you add reserves.

[Anonymous]

Anonymous wrote:We have a house that we paid 1.25k right before the crash. We owe a little over 1k and our monthly payment is 7,000. (2 mortgages) I'd really like to sell it but we have so little equity that by the time we pay closing costs and realtor fees I feel like we will lose the little money we have in it. Has anyone else been in this situation. I'm thinking we just have to wait a few more years until it appreciates a little more and we get more equity. Would moving to a 850,000/900,000 help if we could? The problem is we probably wouldn't have any down payment because of the closing costs and other fees, or very little.

Wait I have another idea to reduce your current mortgage at a better interest rate. Get a harp refi on your primary mortgage at a reduced rate with your current lender but you have to check if it is owned by Fannie Mae or Freddie Mac

[Anonymous]

You aren't under water so you may well qualify for a refi. Go for it.

[Anonymous]

I don't advise to hold on just for potential appreciation. I work for RE related company and the major view kn the industry is that the housing market will cool down due to rising interest rates and mean reversion.
So, you may consider sell now and rent if that's an option.

[Anonymous]

If you're strapped for cash and not able to save the way you want, I would sell and rent at a price point that gives you more breathing room.

[Anonymous]

OP here: we did refi our first mortgage so the interest rate is about 4 percent and our payment with property tax is $5669. but we have a second loan for about 130,000 and it's at 9 percent and the refi bank wouldn't roll it in to the first loan. That payment is $1303. If we sell we'd end up paying maybe 60,000 to the realtor and maybe $30,000 in closing costs, not to mention moving costs. We'd also lose our mortgage interest deduction which is pretty significant.

To a previous poster. I doubt we could sell for more than about 1.25/1.27m

[Anonymous]

Anonymous wrote:OP here: we did refi our first mortgage so the interest rate is about 4 percent and our payment with property tax is $5669. but we have a second loan for about 130,000 and it's at 9 percent and the refi bank wouldn't roll it in to the first loan. That payment is $1303. If we sell we'd end up paying maybe 60,000 to the realtor and maybe $30,000 in closing costs, not to mention moving costs. We'd also lose our mortgage interest deduction which is pretty significant.

To a previous poster. I doubt we could sell for more than about 1.25/1.27m

This is the best time for you to get out of this mess. If you hold on, there is a significant risk that you're gonna ruin your life with the amount of mortgage you have to pay (unless your HHI is extraordinarily high).
I don't understand why many people think mortgage interest deduction is valuable. This deduction is not free. You have to pay interest in the first place to get it and it doesn't count towards your principle.
Interest deduction is valuable only when you have the cash to make investments that can earn a higher return than your mortgage interest rates, which seems not your case.

[Anonymous]

I'm shocked that you make enough money to buy a $1m house yet you don't know that k means thousand. This depresses me.

[Anonymous]

OP, why do you need such an expensive house? And if you can afford $7,000/mo, why don't you have an accountant tell you what you need to know?

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here: we did refi our first mortgage so the interest rate is about 4 percent and our payment with property tax is $5669. but we have a second loan for about 130,000 and it's at 9 percent and the refi bank wouldn't roll it in to the first loan. That payment is $1303. If we sell we'd end up paying maybe 60,000 to the realtor and maybe $30,000 in closing costs, not to mention moving costs. We'd also lose our mortgage interest deduction which is pretty significant.

To a previous poster. I doubt we could sell for more than about 1.25/1.27m

This is the best time for you to get out of this mess. If you hold on, there is a significant risk that you're gonna ruin your life with the amount of mortgage you have to pay (unless your HHI is extraordinarily high).
I don't understand why many people think mortgage interest deduction is valuable. This deduction is not free. You have to pay interest in the first place to get it and it doesn't count towards your principle.
Interest deduction is valuable only when you have the cash to make investments that can earn a higher return than your mortgage interest rates, which seems not your case.

I don't really understand your point. Our MID is about 80,000 so it lowers our taxable income by that amount. Also, we'd spend/lose about 100,000 just moving. Our HHI is 290,000. What I'd really like to do is refi our second mortgage but I'm told 2nd note holders don't do that and really almost no one even finances second notes anymore .