6 years and still owe more then its worth

[Andara Bledin]

I'm not sure what point you're trying to make?

A bad one. I misremembered the OP and didn't doublecheck. >_<

Mytical, talk to your realtor. It's what they do, they'd know what's happening.

^-.-^

[Mytical]

After doing some research, think I've narrowed down the issue/problem. We paid no closing cost, it was put onto the loan (problem 1). When the mortgage change hands the amount we paid was reduced to 542 (problem 2, my fault for not really checking on this, I just was paying attention to the first number and the fact that it was being paid on time). The break down of it is like this now (less went to principle when things first began because we owed more in interest).

390 goes to actual principle and part of interest
152 goes is left

The 152 covers land tax, and insurance
Seeing as 225 is added monthly for interest alone (turns out 4.5% because of being first time home buyers). Now private mortgage insurance cost a lot, as the people who's name the mortgage is in (since due to illness my credit is tanked) is 65 and 77 (high premiums)..and land tax is not cheap..that works out to 390-225 going to principle (according to the math). 390-255 = 135 a month going to the principle. When it actually first started it was(584-254.63 = 392 - land tax (remember it was slightly higher because at the time the land was worth more) and insurance = 135 a month about). Which works out roughly to 9720 paid on the principle .. with closing costs factored in, we are about right where we should be. So even if you go on the lower amount of 542 which equals 39024 - 9720 = 29304 has vaporized to interest, land tax, and insurance. Any wonder why it would be 170k + total by the time we pay the house off?

[FArchivist]

The 152 covers land tax, and insurance
Seeing as 225 is added monthly for interest alone (turns out 4.5% because of being first time home buyers). Now private mortgage insurance cost a lot, as the people who's name the mortgage is in (since due to illness my credit is tanked) is 65 and 77 (high premiums)..and land tax is not cheap..that works out to 390-225 going to principle (according to the math). 390-255 = 135 a month going to the principle. When it actually first started it was(584-254.63 = 392 - land tax (remember it was slightly higher because at the time the land was worth more) and insurance = 135 a month about). Which works out roughly to 9720 paid on the principle .. with closing costs factored in, we are about right where we should be. So even if you go on the lower amount of 542 which equals 39024 - 9720 = 29304 has vaporized to interest, land tax, and insurance. Any wonder why it would be 170k + total by the time we pay the house off?

It should still be much less, but I think I can pinpoint where the problem is. What does the county have your property valued at for purposes of property taxes?

[Mytical]

When we first bought the house..67,900. Went up to 72k(ish) before the housing bubble burst. Currently 52,700.

[Rapscallion]

I ran into something similar yesterday. I'm not in a negative equity situation, but...

I bought the place almost four years back. I paid 12k deposit and it the total was 97k. Fine, the value of property has reduced somewhat over the last three years, but...

I've only got about 8% equity at the moment after four years of payments because the value of my house has gone down so much - without a surveyor's report they're working on market values. What this means in real terms is that the loan I wanted adding on to my mortgage (paying an extra 600 per year) isn't available for the solar panels I want (payback of over 900 per year estimated).

Smeg.

Rapscallion

[Mytical]

I need to get with the new mortgage holding bank..arrange to move back up to the original amount (or more), and pay extra (no penalties for early or extra payments..or for paying it off) each month. Right now $100 extra straight to principle would end up taking off an extra $4.5 a year (x24 years = 108 extra total off..)..then that $4.5 a year would take off a very minor portion each year as well.

So even $40 extra a month is 4.8 times that. Of course each year I do not do this, makes it slightly less worthwhile.

[Andara Bledin]

From what I understand, you don't really have to do anything to pay more, just send in separate checks specifically for payment of the principle at the same time you send in the mortgage payment each month, but not in the same envelope - actually I think they might go to a separate address. That way, you get to control how much you're paying down, so during good months you could pay more, and if things get tight, you could hold off until things get better.

^-.-^

[Mytical]

*nods* That is true. Would just be easier/more convenient for me if they would increase the auto withdraw since that is how I have them do it (so no way it can be late ). Also, for some reason when I send a check/money order/etc in I don't seem to get any receipt or acknowledgement whatsoever. With auto that would not be the case.

[Aethian]

If you go to their website and they have it setup to... You can request increase coming out with so much going towards the normal payment and so much extra going to principle.