patrick.net

10 year mortgage is extremely smart. Payments are high.

See if you let the builder handle the loan. It's very simple. If you knew how much a builder makes on a single home. You would understand quite well. Why it is well worth it to them. Builders make a KILLER MARK UP on every house they build.

Resale is no problem. I do it all the time. Or did, only a crazy person buys in a negative equity market.

See if the builder does the loan and the buyer defaults. He keeps the down payment and all payments. He puts another buyer in and has NO LENDER TO WORRY ABOUT.

Frankly if you knew how much a builder makes on a house in addtion to the vig you have to pay on your current loan. If you are in a new house. You could just get a little crazy. You saw my example on the previous page of 139 percent interest paid back IN ADDTION to the 100k principle. Just add about oh another 50 to 60 percent to that. Look its gouging, you sure as fuck can't get away with that. With like selling your used car to someone. No ones that fucking stupid. Deal is the book is there bluebook or whatever will rat you out. As for a new car used they could care less your hair would stand on end for the current markup. They have increased it to the ridiculous over the years. You don't know what it costs and how much is made on a new build. A liter of coke - 142 percent made costs about 3c a bottle to make unless on sale. So on there is huge markup in everything you buy. THESE PEOPLE ARE GOUGERS. Please understand that.

Those occupy people have a lot on the ball in my opinon. I hope they burn the fucking place down. Frankly whats been going on with things. Is no way to do commerce. If you ask me these occupy guys aren't political. They are just damn sick and tired of these slick talking swindlers running and thieving from many of the governments of the world and people.

So look up there the builder makes the loan at no interest and makes off really well. As for resale I can get into that with you later. Again in this current enviornment. With financing the way it is. DON'T BUY FOR ANY REASON. Unless you can get something at say 40% under last falls market. It's getting there folks.

duh...

that is why ARM is much better. Pay much less on interest.

if you can guarantee your job(to be able to refi) and you don't mind refinancing every few years or whenever you feel rates are in your favor, then ARM is for you.

if you like peace of mind, lock on a fixed interest, then you do the 30 year fixed.

ArtimusMaxtor says

If you ask me these occupy guys aren't political. They are just damn sick and tired of these slick talking swindlers running and thieving from many of the governments of the world and people.

You're damn right. I make an awesome income but have gone OWS. I support them 100% and have and will continue to help them out anyway I can. I am totally sick of the outrageous theft taking place in direct sunlight by wall street and both political parties. They are tear gassing and beating the shit out of OWS, even decorated veterans, but the REAL criminals are laughing out loud as they continue to steal and not ONE arrest of a government official or wall street person caught stealing. This is why I am pissed off and angry as hell. I am completely dumbfounded as to why very few are. Guess they have been TOTALLY brainwashed with little chance of us deprogrammers EVER getting through to them.

The bank isn't really worried if it makes more or less interest over the long term. In fact, if interest rates increase they would prefer that you just pay off the loan. They want the current rate now. You can refinance next month and pay off the loan or keep it for 30 years. It doesn't matter. In fact, the "bank" usually sells the loan so they don't make the interest anyway.

Everyone seems to be looking for some sort of conspiracy but there isn't one here.

Oh, and Artimus, builders have much smaller margins than you imagine. DR Horton (one of the largest builders) had gross margins of 16% last quarter. Their net profit was just over $35 million on $1.1 billion in sales or about 3%. That is $6,000 on a $200,000 house.

Buster Wall Street owns NYC. No point in saying the cops or even the government run things in any really meaningful way. The way these OWS wants them to. Because NYC government like the U.S. Government are in debt up to their necks. To the likes of Wall Street. It's nice to have young adults. That are sick and tired of the bullshit. I wish I was in NY I would be there myself. Buster the numbers speak for themselves. Deep down people may not realize. But have the sinking feeling they have been screwed. Your an intelligent person. With numbers like the ones ground out there. In my example above. You can see why some forecloused on person. Would be upset knowing or not. No less the fact they were told they were homeowners. To be thrown out only to realize they never owned shit. NOW THE FUCKING POLICE THROW THEIR TENTS IN THE GARBAGE. Fuck NYC government, Fuck Bloomberg. Fuck that property managment company thats included in most of the problem to begin with.

DaveM_Renter says

Let me try to explain the phenomenon in two simple sentences:
"The more you owe, the more you pay in interest. If you want to pay the same amount each month, you will have to pay mostly interest in the first years."

Good explanation.

On the other side of a mortgage is an investor in an annuity. The bank is just a middle man, taking a fee for creating this (an investment on one side/ loan on the other). They might hold it, as an investment, but aside from the up front fees, it's just a simple annuity, with a well defined ROI, and with what used to be risk commensurate with the interest rate.

If you can buy less than you can afford, and pay extra principle in the first 10 years, pay your mortgage early. This cuts your interest paid drastically and the time it takes to pay off the mortgage. It also cuts interest drastically to pay 1/2 the mortgage payment every two weeks. (Like 7 years) You can investigate these strategies by plugging extra payments into an amortization calculator.

Beware, however, some mortgage servicers have rules against these sorts of things. I had a mortgage through Regions some time ago. They would not apply any payment unless there was a full payment. They had a special program you had to pay them to make these partial payments for you. What a racket.

So in this way the only way to get ahead was to get one payment ahead/ make an extra payment instead of every two weeks 1/2 a payment.

If you try the pre-payment of principal strategy be sure to write on the check "apply to principal". Verify in your statement that it has been applied properly. Depending on the bank they will just hold the partial payment until they have a whole payment.

My boss has a loan serviced by Citi. The payment stub that comes with the statement each month has a space to itemize a partial payment of principal. Citi also has a special program where they will do two 1/2 payments every two weeks. Of course it costs a fee of $375. A hefty price for something you can do yourself.

Just remember in this environment, unless you have an adequate rainy day fund, even as much as a years living expenses in case of a job loss. You may not want to pursue principal pre-payment. The problem is if you run into trouble you most likely cannot get a loan to pull the equity out and on top of it if you can't make the mortgage you will lose your house. If you want to do a little to shorten the term do the one extra payemnt. It takes off about 7 years off the loan but it won't end up being that much money.

For short loans they charge simple interest. Like car loans. It is a much better deal, but this is because these are relatively short loans.

It's not so much deprogramming as much a debt slavery. A person with his OWN mind is more like the people of OWS. Many of them are young and really don't owe anyone. They are really dangerous to the lenders. Lenders operate off of PRINCIPLE. The principle being the lender is the slave to the borrower.

If a principle is in place. Like you should not kill or steal which are most of the major religions. (Assuming its a just peacetime and someone whacks someone else. Or steals their DVD player). See what I'm saying. Not stealing is a principle. FOUNDATIONAL. Like oh a CAPITOL. Or CAPITALISM. It has perminance. Like oh a temple it is foundational. Capital is a fucked word. Believe me. Might as well slam your head against the wall with that one. They know it.

It's like Israel being this big crapping religous monster that grew out of WW2. Usury is forbidden to Jews. Usury is at one end of fucking Jerusalem to the other. Condo's, commercial buildings, Auto Loans, Home Loans, Master Card, Visa. So the religous farce that has been foisted on us is total bullshit. Bet someone owns that government to. Guess who.

One more time Usuor's operate off of principle. IF that principle is foundational. Then they have a shitload of debt slaves. Not to mention at least several govts.

The fucking UK alone has government after government as part of its Commonwealth. Its fucking huge. With 53 member countries. A lenders dream. They did not join or become a part of it because they like London. Lending is involved. Ghandi saw those fuckers coming and got them the hell out of there. They did not want their resources raped through lending. Resources are very important to Indians as to be a part of their religion. Also they really are not into war and did not want to be pivoted into anything. I remember when they declared the U.S. China and Russia the only superpowers. UK was out. Im a really big fucking rube. The atomic bomb never did make a bit of sense to me. Used once. "It's all pretty much conventional now" -Red dawn. Fucking please I'll buy Zucatti park for a handfull of shit. Who the fuck are they kidding. But wait weren't they conquered? Those lil nippers learn fast don't they? Got little car to sell now. I got your little car right bettween my legs.

A Slave dosent really have a mind of his own. He just does what he is told. Has no rights. So I am not really suprised at some of the response here. They live in denial. They don't. They just don't have total control. So it's not deprogramming it's something more serious. I could take it less serious. However most major religions including Muslim and Jewish and Christianty condemn usury and consider it slavery. So I do take it seriously. I used to make hard money loans. I don't do that anymore. I saw how people sucked up to me to get those loans. Being my own cash. I watched their behavior when I tested that principle in the subject. It was sad to me. I got out of it. I don't like doing that to friends and neighbors.

If you want to live a day to day terror. Get a home loan tie the chains on yourself. Bow and scrape work live in terror every week. You just may loose everything you own very quickly. Not the end to be sure. However why not figure out something else. It's sad to see fearful people living from day to day.

ArtimusMaxtor says

If you want to live a day to day terror. Get a home loan tie the chains on yourself. Bow and scrape work live in terror every week. You just may loose everything you own very quickly. Not the end to be sure. However why not figure out something else. It's sad to see fearful people living from day to day.

Agreed. If you must buy, live below your means. You can pay it off and become debt free, just make sure there is no pre-payment penalty. Just make sure monthly rent would cover the note in case you have to move while trying to pay it off. Then you can rent it out and buy or rent where your new job is.

Not disagreeing at all Ms Anna. However I feel strongly in one direction. This one. People carp about being skilled and manufacturing jobs going overseas. The Mexicans etc. My thoughts would be to take some time to learn to build yourself. It's more than worth it.

Sheesh even learning how to run subcontractors. Why pay for with your labor for thirty years? A house that only took three months to build. Thats an average sized house. Just does not make sense. Live below your means is smart no doubt. The problem is this: If you get a loan or are in debt they are going to steer you to the things that are going to keep you in debt. Case in point. Why do people refinance? Dosen't make sense. True your saving. However what you are really doing is making it another 30 year note. The first 10 years start all over again. Most of it going to interest and not principle. I hear bla bla this and bla bla that. Truth is Ms. Nola. I get landlord credit reports. What really going on most people are usually stretched out way to far.

The greatest majority of people in this country are 3 bedroom owners by FAR. Thats whats here. True there were some newer type fancy builds that stretched that out and sunk the lenders.

Im respected in my field Ms. Nola. I appreciate your comments they make sense. That you for caring about others. What I am doing actually makes sense some don't get it however.

Why do people refinance? Dosen't make sense. True your saving. However what you are really doing is making it another 30 year note.
Most of the people on patnet who I hear about refinancing usually go to a shorter term (the conservative ones) or use refi proceeds as working capital at foreclosure auctions.

Artimus...

What is your field by the way? I am not entirely sure what your main point is. Is it being debt free?

100% agree on refinancing. Most of the time it is a waste of money. Putting that money toward principal will often be the same or better. You have to run the numbers though. This calculator lets you put in extra payments...it is very illustrative. It shows you month my month how much goes to principal and where in 30 year loan you really start paying down the note.

http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx

I agree most people spend up to and past their income. This is why a house payment is a terrible idea for them in so many ways. For example your payment may fluctuate with your taxes and insurance payment. If people are already overextended, coming up with an addiitonal $200 to $500 for tax and insurance increases for escrow can be impossible. On the other hand if they are staying put, the forced saving aspect is beneficial because they will never have an asset otherwise.

I think we mostly agree. Debt is not a good thing for the most part. I am debt free and house free at the moment, but I have felt slave to a home in the past and I never want to do that again. Having said that, if I had kept that house I would be with rent parity right now. Divorce was the reason for the sale. Now my new fiancee and I are saving like mad renting. If we bought our apartment as a condo it would be over $300,000. We are renting it for roughly the cost of the taxes and insurance on that type of home/loan. We are in one of the nicest areas of Uptown New Orleans. Homes in this area are $500,000 to 3 million. We share our "house" with just the landlady and her husband.

Most people would have to take a loan to build their own house so I am not sure that is really an option to be debt free unless they do it like the Amish and get together as a community to build it. (A fantastic idea in my opinion.)

I would caution folks from being their own subcontractor without any prior experience or knowledge. I work in construction, it is the general contractor's job to coordinate all the work and do some quality control. Most people are not in a position to do this work without experience. I work for a structural engineer and people who want to be their own contractor is a red flag for us. We would not want to get involved in that type of project. Even with professionals you can have problems and get sued. Add in an inexperienced home owner and well there will be some sort of problem, just depends on what it will be and who is going to get blamed.

I know a guy who I used to work with me. He was his own general contractor to save money building his own single family home. Problem was, he didn't know what he didn't know. It was an utter disaster. It cost him more than he "saved" by being his own general contractor.

Another point that I think people should strongly consider when taking out a 30 year mortgage for a "new" house. There has been speculation that the newer construction may not even last for the 30 years of a conventional mortgage. If that ends up being true, this will cause lots of problems in the future. If the house is crap no-one is going to reimbuse you for your purchase in year 15 or 20. You will still have the payment, plus all the remediation to do.

My youngest sister almost bought one of these houses in Houston. It had water intrusion around the windows, it had structural defects in the roof. It had really strange plumbing sounds. It was ten years old. I told her to walk away from this property. Water intrusion means mold which means it could be a tear-down in the end.

The only... and I mean only reason she figured most of this out is she went with the inspector around the house and asked him about everything. Even though she had two little kids she took the time to do this and it probably saved her tons of time and money. The real estate (hack) agent was telling her it was no big deal. (of course) Don't trust the agent or anyone they recommend for inspections. Find your own and follow them around. They will lie to you to get you to buy the house. You are the only person you should trust.

A couple of people said that amortization works the same way with car loans as house loans. Actually it doesn't. Car loans are WORSE. You think the interest is front-loaded in a house loan? Take a look at the terms for car loans, much much worse. Use one of those mortgage calculators on your car loan and you'll find your principal won't line up with what the calculator tells you. That's because auto finance companies use different formulas.

AND THIS IS WHY THE AUTO FINANCE FOLKS INSISTED THEIR BUSINESS NOT BE REGULATED BY THE CONSUMER FINANCE AGENCY... because if they revealed what they were doing with loans people would get pissed off.

Watch out for the "Rule of 78s" method of interest calculation. It's the "sum of the year's digits" method. If you try to pay it off early, you're still on the hook for the pre-computed interest. Rule of 78s interest computation is illegal in loans over 61 months. Several states have outlawed this entirely and it's usually found in subprime markets.

My auto loan (got it because it was so cheap, why pay cash up front even though I had it) doesn't line up with the loan amortization results. It's really telling that the monthly statements refuse to break it into interest and principal; they don't want me knowing those numbers. I figure they're doing something hinky by front-loading my interest, but I don't know exactly WHAT. The numbers add up over the five years, but I suspect they're getting most of the interest over the first two. That's why buying a car and selling it quickly is a terrible move, and why you don't want your car totaled when it's relatively new.

madhaus says

Watch out for the "Rule of 78s" method of interest calculation. It's the "sum of the year's digits" method. If you try to pay it off early, you're still on the hook for the pre-computed interest. Rule of 78s interest computation is illegal in loans over 61 months. Several states have outlawed this entirely and it's usually found in subprime markets.
My auto loan (got it because it was so cheap, why pay cash up front even though I had it) doesn't line up with the loan amortization results.

My guess is that most of these loans are from the stealership itself, and not from banks, and as you said, it's more typical in subprime markets (and from subprime stealerships). Most car loans use normal amortization instead of the bizarre "finance charge" method, especially most of those that are from banksters or credit unions.

The Rule of 78s precalculates the amount of interest due as it would be under normal amortization and aggregates the total interest due into a "finance charge". Then you get a "rebate" if you pay the loan off early. So if you have a 48 month loan, and pay it off in 36 months, you'd get a 12 month interest rebate, but the rebate is calculated in such a way that you actually don't get back the right amount of interest as a normal loan. The "rebate" is actually a prepayment penalty if you do the math.

That's why you always need to read your loans carefully. If you see anything about an interest rebate or Rule of 78, caveat emptor. Generally a legitimate lender wouldn't use this method and would just calculate interest conventionally.

The Rule of 78s-type loans require you to pay a higher than stated rate of interest in the early months and a lower than stated rate of interest in the later months. You can see a calculator for this method here: http://www.hughchou.org/calc/rule78.cgi Ironically, this method is the exact opposite of what the OP was suggesting -- the OP was basically creating a Reverse Rule of 78s loan when calculating the total interest due under the loan according to normal amortization, but then rigging it so that early payments were half principal and half interest.

My loan is from Toyota's finance arm, not the dealership itself. I know how amortization works, and however they're calculating interest and principal on this loan, it isn't what the loan calculator says. So they're doing something hinky. The total amount of interest on the disclosure paperwork does add up properly, though.

madhaus says

My loan is from Toyota's finance arm, not the dealership itself.

Yes, when I'm saying "dealer financing," I'm really saying "dealer-arranged financing." The dealer generally has a list of preferred lenders, and usually the automaker's captive financing arm (i.e. Toyota Financial Services for Toyota) is at the top of the list when it's a new car stealership. When you buy a car with dealer-arranged financing, the finance company still has to approve the transaction. If they don't, the stealer will shop your loan to another preferred lender.

In addition, in some cases the stealership is adding on its own vig -- e.g. the finance company may offer the loan at 4%, but the stealer may mark this up to 6.5% (I believe California limits the vig to 2.5%, but don't quote me on that). In addition, the stealership gets commissions/fees for facilitating the financing. This is all negotiable. The stealership will often lie and say, "oh, you're Tier 2 credit," even if your credit score is Tier 0 or Tier 1 because they're trying to get a higher amount out of you -- this could easily make the rate go from something reasonable to something double-digit.

That's why most people are better off getting financing outside of a stealership, unless the stealership's offer is one of those flat 0-3%-type deals (although right now, many outside loans are 3% or less). If they're giving you 0%, take it, by all means. But always show up with pre-approved financing if they try to mess with you. Capital One, oddly, has a good auto finance program as do most credit unions.

Ms. Anna,

Very true. Usually there is a loan involved if they won't let you act as the contractor. Unless there is demonstrated knowledge of building

I'm glad to see you are saving so much cash renting now. I highly recommend not signing a lease with a rental. In this market. Which could become highly competitvie at some point. You could find a much cheaper rental.

Building is something you could learn on your own at school of course. I think its a good idea of course to know what your doing before you do it.

Disclouser is always important and its the law.

I have been a home investor and landlord since 1992. I have learned a lot of things over the years some the hard way. Spiraling values really don't fit where I want to be.

Believe it or not I didn't get slammed hard this time around and dumped everything I could quickly. So i guess I feel good about things. I got rid of everything that was worth getting rid of. What really triggered things was the glut of foreclosure. They ran a certain average for years. Some people would be shocked to find out just how many foreclosure their are on an average in the nearest large city to them. There are a lot. When that doubled and half again. I said thats it I'm out. I used to read the foreclosure lists every month of course. So it was kind of a no brainer. Then again with mortgages as you can see people like to gamble they can make it to the end. Not the end of the world. But hey can be a lot of work.

Funny I can't even spell foreclosure as many times as I have seen and written it. I guess i have it stuck in my head that its a French word hahaha. Honest to goodness i mispell that word nearly every time

ArtimusMaxtor says

I'm glad to see you are saving so much cash renting now. I highly recommend not signing a lease with a rental. In this market. Which could become highly competitvie at some point. You could find a much cheaper rental.

We are month to month now so we can take advantage of that if we decide to buy in the future. It is a little risky, but our landlady loves us and I really don't think she needs the money. Has not raised the rent. We are in our 4th year here month to month since end of the first year. I think it just helps out now that she is semi-retired, and the house is her family home so she doesn't want to part with it. The house is like 4,000 square feet, and our portion is probably 1200 or so. So she and her husband are living in a lot of space. I think the rent helps with taxes and maintenance and that is the only reason she is renting it out. So the house is her baby and she spends money that doesn't even need to be spent on the house. It is nice for us because we get to save and live in a very nice place at the same time. She gets to live next to two professionals that used to own homes, so we know how to take care of the place. It is a win-win I think.

I actually have never had my rent raised at any apartment I have rented in this town. I have always rented from individuals and have stayed for 5 years the last two places I lived. Maybe I am just lucky, but I think it is because I ask questions of the landlord as much as I look at the actual place. I was going to rent one place before Katrinia and somehow I had a bad feeling about it. So decided not to take the place. Something gave me a bad feeling. I found out later that the guy was a lawyer and would never fix anything at the one of the places that he owned that I met someone who lived there.

Hopefully the luck will continue. I enjoy not having to pay for maintenance and not doing yard work on weekends. I enjoy having the number to a plumber and an A/C guy I can call if there is a problem who I don't have to pay. Awesome!

If I was to find a good deal I would consider buying, problem is there has yet to be a recession in New Orleans. The Katrina money that flooded in has not run out yet. I am looking for a dip soon, but we shall see. Real estate was scarce after Katrina so it was really expensive for a while. If the double dip comes to New Orleans, the problems is I may be out of work right when it is time to buy. Oh well, only time will tell.

Glad you saw it coming. I did too. My and the sig other were in the market around 2005 and 2006. I could not wrap my head around the fact that a condo selling for $250,000 or $300,000 was only renting for most $1500 per month and that is a strech. I was telling him it did not makes sense that the same house I had owned a few years earlier for $107,000 was now $250-300,000. Did not compute. So that is when he started doing research and found Patrick!

Thanks Patrick for reinforcing what I was saying! You made me look like a genius and helped keep us from losing our shirts! Luckily we walked away from the condo we were going to buy. Not entirely because of this but because I found out the complex was under-insured. It was a lucky break that my homeowner's / renters agent was the agent for the complex. So even though they did not give me a copy of the policy declaration I got the details of the policy. ( I have since learned so much about condos I would not consider one.) Basically if anything major happened I would have been taking out a loan or draining my savings to rebuild the condo complex or my neighbor's apartment due to the low limits of insurance the condo complex was carrying. Maybe the lender would have nixed the deal, but I doubt it. Back then they were not checking anything. Luckily I am very detail oriented. I realized this was a bad situation. With only 12 units and limits of insurance per unit at half of what we were paying it was very very risky.

Since then I have read Real Estate 101 and realized I knew a lot but not enough. Condos /HOAs are very tricky. In this town a lot of condos are 2 to 3 units which is nuts. It is like going into business with someone you don't know at all. I would much rather buy my own two unit "double" and be in charge of the whole thing.

Nomograph says

Some people want to pay off their mortgages simply for peace of mind.

Be out of debt. Not being subject to mortgage servicing fraud by servicing companies (see msfraud.org). Each person has their own comfort.

Recently I was starring at the same amortization table and wondered why people do that. I can only blame an American way of getting everything: max out.

Here is comparison between borrowing 150K for 30yrs versus 50K every 10 years. Obviously it is not always possible, but upgrades every 7-10 years are now much more feasable option to me. I will try to execute it for myself, at least for rental/investment property.

Note that I use 4% rate for first 10 years and 7% and 10% for second and third. Despite rising mortgage rates borrowing and upgrading incrementally still makes lots of sense.

30yr
Total paid:
$257,804.26
Interest:
107,804.26
Monthly:
$716.12

10yr x 4%
Total:
$60,747.08
Interest:
$10,747.08
Monthly:
$506.23

10yr x 7%
Total:
$69,665.09
Interest:
$19,665.09
Montly: 580.54

10yr x 10%
Total:
$79,290.44
Interest:
$29,290.44
Montly: 660.75
--------
After 30 years:
Total: $209702.61
Interest: $59702.61

ArtimusMaxtor says

Bet someone owns that government to. Guess who.

Israel receives about $3 billion in direct foreign assistance each year.
http://www.ifamericaknew.org/stats/usaid.html

What's with all the f*bomb's in this thread? Maybe this is the Occupy Patrick.net discussion since there's a lot of hobo talk.

At 5 percent, you're paying twice what the house cost over 30 years.
Cash is the way to go.

robertoaribas says

$1130, with $220 being tax and insurance, and nearly $250 being principal...On a home that would rent for $1750.

Exactly what is your point?

woah buddy ...why would anyone pay you so much in rent for some thin they could just buy themselfs? that does not make a damn lick of sense. I own my share of rental property and no body pay me that kind of mark up.

Nomograph says

Some people want to pay off their mortgages simply for peace of mind.

this man speaks the truth.

tdr says

here's a lot of hobo talk.

try to be understanding TDR. some folks are angry and some times some sparks fly is all.

I purchased our first home in May of 2009 ... I had no real clue about how much of a racket interest was but have recently found out due to hard times.

I got laid off in 2011 and fell behind in my payments in May of 2012 ... anyway, the original loan was for 265,000 I discovered that the payoff today is 258,000 ... So in 36 months of $1900 payments I've only taken 7k off of my principle - WHAT A FN racket! That comes close to 70,000 profit for the bank! The bank that refuses to work with me to get caught back up on payments!

I think Ill stop payments and let them take the house from me and rent the rest of my life. Again - What a racket!

Bentover, don't you wish there was a money back return policy?

GUESS WHAT! There is. You may qualify to stay in your home for up to 3 years without paying any note!

FINE PRINT. Please be advised that certain 2012 expiring debt forgiveness as of 12/31/12. Please consult an attorney. Save all your cash and don't pay anything but utilities. Do not keep it in the bank. And pray the fiat currency stays afloat. Then pay cash for a rentable cash flow property anywhere or buy something tradable for the hard times that could be ahead.

I purchased our first home in May of 2009 ... I had no real clue about how much of a racket interest was but have recently found out due to hard times.

I got laid off in 2011 and fell behind in my payments in May of 2012 ... anyway, the original loan was for 265,000 I discovered that the payoff today is 258,000 ... So in 36 months of $1900 payments I've only taken 7k off of my principle - WHAT A FN racket! That comes close to 70,000 profit for the bank! The bank that refuses to work with me to get caught back up on payments!

I think Ill stop payments and let them take the house from me and rent the rest of my life. Again - What a racket!

BentOver says

I purchased our first home in May of 2009 ... I had no real clue about how much of a racket interest was but have recently found out due to hard times.
I got laid off in 2011 and fell behind in my payments in May of 2012 ... anyway, the original loan was for 265,000 I discovered that the payoff today is 258,000 ... So in 36 months of $1900 payments I've only taken 7k off of my principle - WHAT A FN racket! That comes close to 70,000 profit for the bank! The bank that refuses to work with me to get caught back up on payments!
I think Ill stop payments and let them take the house from me and rent the rest of my life. Again - What a racket!

Another reason housing is not all it's cracked up to be...

Pay your mortgage for 359 months, lose your job during that last year, and default on your 360th payment.

Watch what happens to your house.

Similarly, become unable to pay off your property tax after your house is paid off and watch what happens.

Real estate can be very good for some. But yes, for many, it's not all it's cracked up to be.

BayArea says

Pay your mortgage for 359 months, lose your job during that last year, and default on your 360th payment.
Watch what happens to your house

Uh, why wouldn't you put it up for sale?

Screwed says

So in 36 months of $1900 payments I've only taken 7k off of my principle - WHAT A FN racket!

You got it. Unfortunate for you that it was a little late. Now imagine you had rented that place and saved the money for future DP or cash only purchase. Rule of the thumb is escape from Banks,Realtor,Govt. cartel. Never buy if the morgtage is not the same as rent for the same place,or at least put enough DP to make your mortgage payment same as rent - assuming that you are sure you are not buying a declining value RE,which is very hard to find in this market. GL to you.

tatupu70 says

Uh, why wouldn't you put it up for sale?

I wish I had done that months ago - course no quick sales these days.... I imagine Ill just end up having horrible credit for the next 10 years. :( Really sucks was close to 800 for years then BAM its all washed away - been a real struggle finding the will to carry on.