The Old Folks Home

[Alaskan]

Al, of course you can sell the house, and keep the difference. But say a housing bubble bursts, or for some other reason you can't get the house sold, in other words the house isn't worth what it was valued at earlier, then those things come into play.

If the bank is worried that the house is overvalued, then they should require a much larger down payment. No way, should they get a $100 house plus your car, when the loan was only for 85. If they are worried that the house is going to crash in value, then they need to require a larger down payment, 20 or even 30 percent of the house value.

i duno, but I think risking your house is enough heartache... No sane person should risk even more.

 

[vehve]

Of course you can make a larger down payment as well. But saving together 40 bucks on an annual net income of 10 bucks can be tough, especially for first time buyers. Hence the other securities.

 

[Alaskan]

True.. But I am still against the bank getting their claws in extra stuff.

 

[perchie.girl]

Al, say a house costs 100 bucks (to simplify things a bit, housing isn't that cheap here =P). To get a loan here, you need like 10-15 bucks of own money saved up, so you need a 85 buck loan. The house is worth 100 bucks, so 70% of that is 70, meaning you need to come up with an additional 15 for security from somewhere, like your car, stock, another property or whatever. Then, if everything goes to heck and you lose the house, and let's say you haven't yet paid off anything, forfeiting the house to the bank only covers the 70% of the value, meaning you still owe the bank the 15 bucks that's left of the 85 you borrowed. So either you gotta also forfeit the other property you put up as security, or figure out some other way to pay off the rest of your debt. Crappy for bad situations, but on the other hand it leads to more stable banks, and maybe works as an incentive to not buy overly priced property, and also keeps the prices down a bit.

No you paid in the 15 bucks already. So the bank gets it all. No need to forfit anything with simplistic thinking. But it s a bit more complicated than that.

When you take that loan out for the 85 the bank requires a down payment in good faith that you WONT walk out. As well as you sign a contract that requires you to pay on time. they are counting on making money off the interest of the loan. Now I have to go to real money here...

My last house was 96 thousand dollars because of the type of loan I took I had to pay 20 thousand dollars down. So my loan was 76 thousand dollars. Which put my payments at around 500 dollars a month (rounded figures for sure) but if you look at the details of the loan most of that was interest. figure it .... 500 a month for thirty years.... is 180,000 twice what I purchased the house for. and its in the contract. If you look at that 500 dollar payment at most 100 at the time was going to pay off principal. The smart way to get around that is to add on another 100 and designate it to go toward the principal of the loand. This pays your mortgage off in 15 years instead of 30.

If you turn in your keys and walk away its considered default of the loan and it goes on your record.... hosing your credit history.

of course things have changed since 2003 in the US. Different types of loans, Loan chriteria prices of homes and government bail outs. I am so glad i am out of that whole Rat race...

deb
edited to add: I do not understand that upside down buisiness personally but If the industry tanks you can simply continue paying the mortgage till it comes back. I was in the mortgage loan business a Jumbo loan was 300 thousand which is the limit for a conventional loan. Jumbo loans have different chriteria.

https://en.wikipedia.org/wiki/Jumbo_mortgage

for what it is worth I was in the business for exactly six months as a trainee. Stock market crashed and I lost my job.

 

[perchie.girl]

ACK all this is worse than homework.

Yup. I am so glad its all over for me. When I cashed in my house I paid cash for my 18 acres. So glad I did.

 

[1kluckychik]

Ayam Cemani eggs are scheduled to arrive tomorrow

 

[dsqard]

Thank you klucky for getting us back to fowl instead of foul

 

[superchemicalgirl]

With filthy duck eggs being the norm under broody ducks, is it really necessary (aside form keeping the bator clean) to clean them up real well before incubation? Or do the wet duck paddles continually refresh the filth coating on the eggs when brooding? Just curious.

I wash my eggs. Chicken eggs require small spot clean up sometimes with a damp washcloth. Duck eggs require soap and a scour pad. And I go out at 0430 every day and the egg has pretty much just been laid and yeah, scour pad. Even when the eggs are "clean" they are filthy.

Oh, something I've meant to ask about US mortgages. Can you just walk away from a loan by handing over the keys to the bank over there? Here you can typically cover up to a max of 70%-80% of the loan with the property you're buying.

latestarter explained this fairly well, but loan criteria are different depending on the amount of money the loan will be for and how your credit score is. There are some loans without down payments. Also loans for land only (no house) require a much higher down payment as land doesn't have the same schedule of appreciation. And yes, you can walk away from the house. It tanks your credit score but many people did that during "the great recession" here. However, banks became overwhelmed with houses, markets became saturated with vacant houses, and crime in certain neighborhoods increased. Now the banks are required by law to work with you to help you refinance your loan to something you can handle.

Well since this will be in the fall I will need more of your honey too

Pretty sure you plant these in the spring, dear. Harvest is in the fall.

Ayam Cemani eggs are scheduled to arrive tomorrow

I'll hit that. When can I get eggs from you? I want these. Bad. I have honey.

 

[perchie.girl]

There is one other way to purchase in the US. I only just learned about it in the past ten years. Its called a land contract and its between you and the owners of the property. The owner keeps the title till the contract is paid off.

I have a friend in Michigan that bought fifty acres plus a couple of houses. The original land contract purchasers were allowing a farmer to grow alfalfa on the land. They defaulted and walked away so my friend got it from the original owners. Who happened to be very very nice people. They even helped them fence for their horses. and loaned them a tractor.

deb

 

[1kluckychik]

I wash my eggs. Chicken eggs require small spot clean up sometimes with a damp washcloth. Duck eggs require soap and a scour pad. And I go out at 0430 every day and the egg has pretty much just been laid and yeah, scour pad. Even when the eggs are "clean" they are filthy. 


latestarter explained this fairly well, but loan criteria are different depending on the amount of money the loan will be for and how your credit score is. There are some loans without down payments. Also loans for land only (no house) require a much higher down payment as land doesn't have the same schedule of appreciation. And yes, you can walk away from the house. It tanks your credit score but many people did that during "the great recession" here. However, banks became overwhelmed with houses, markets became saturated with vacant houses, and crime in certain neighborhoods increased. Now the banks are required by law to work with you to help you refinance your loan to something you can handle. 


Pretty sure you plant these in the spring, dear. Harvest is in the fall. 


I'll hit that. When can I get eggs from you? I want these. Bad. I have honey. 

Lol. I would hate to jinx our hatch by setting a date.