givemehotwater
Well-known member
Your story... reminds me of mine.
@ea56, I too had a similar ride into homeownership. Although, my path was slightly different.
I purchased my first home in 1995. I had just turned 25 at the time and had no clue what I was doing. What I did know... is that I was not a party animal, and did not care to pay rent anymore to live in the city. I knew I was mature enough for homeownership, and wanted to start planting roots and getting serious.
At the time, I had no down payment at all. I just had about $7,000 of savings, from careful budgeting and living below my means. I think I probably received one of the first generation of subprime mortgages because I was allowed to purchase a house with no down payment at all.
The rationale for the bank was... I was required to prove reserves (to make payments if I lost my job) and I needed to pay closing costs on my own. My interest rate was 10.875%, and I had a prepayment penalty, locking me into that horrible rate for 3 Years. The rates around that time were 8% and 8.5%. I guess this is how the bank locked in its profit.
Right after I moved in, I had issues with the Circuit Breaker tripping all the time and ended up going a year through that, because I didn't have the cash in savings. Eventually, I replaced the Electrical Panel which was fairy expensive, even for then.
Finally, in 1998, I was able to refinance without paying them a huge penalty, and was I happy to convert my loan to a lower rate, 20 Year Fixed Mortgage. My payments were slightly less, but I was paying significantly more down in principle, which I was ecstatic about.
I then sold the place in 2001, just before the attacks. It was then that I learned that I had been living with Vermulite Attic Insulation contaminated with Asbestos, and the original Electric Panel should been replaced long before I bought the place. I learned the value of a decent home inspector at that point.
I also walked away with almost $90,000, which served as a great downpayment towards my newer Condo which I purchased with my then-boyfriend, now husband.
I remember being amazed at the new choices in Mortgages, which now included Interest-Only, and 2 & 3 Year ARMS with extra-low rates and payments. I kinda wondered to myself then, what happens if you don't refinance and get stuck with these loans? Our Mortgage Guy (Washington Mutual) explained that you'll always be able to refinance!
We ended up taking a Conventional 30-Year Fixed and buying a newer, nicer Condo. Which we turned around, and sold three years later, and traded in for our current house. The money from that sale was significant, and once again, allowed us to trade up for a much nicer house.
Eddie. I just wanted to say I completely, 100% Agree with your post. People today, think they are going to start their journey in their dream home. The truth to the matter is, it takes time. It takes time and sweat equity to achieve the American Dream.
People really do need to have that explained to them.
@ea56, I too had a similar ride into homeownership. Although, my path was slightly different.
I purchased my first home in 1995. I had just turned 25 at the time and had no clue what I was doing. What I did know... is that I was not a party animal, and did not care to pay rent anymore to live in the city. I knew I was mature enough for homeownership, and wanted to start planting roots and getting serious.
At the time, I had no down payment at all. I just had about $7,000 of savings, from careful budgeting and living below my means. I think I probably received one of the first generation of subprime mortgages because I was allowed to purchase a house with no down payment at all.
The rationale for the bank was... I was required to prove reserves (to make payments if I lost my job) and I needed to pay closing costs on my own. My interest rate was 10.875%, and I had a prepayment penalty, locking me into that horrible rate for 3 Years. The rates around that time were 8% and 8.5%. I guess this is how the bank locked in its profit.
Right after I moved in, I had issues with the Circuit Breaker tripping all the time and ended up going a year through that, because I didn't have the cash in savings. Eventually, I replaced the Electrical Panel which was fairy expensive, even for then.
Finally, in 1998, I was able to refinance without paying them a huge penalty, and was I happy to convert my loan to a lower rate, 20 Year Fixed Mortgage. My payments were slightly less, but I was paying significantly more down in principle, which I was ecstatic about.
I then sold the place in 2001, just before the attacks. It was then that I learned that I had been living with Vermulite Attic Insulation contaminated with Asbestos, and the original Electric Panel should been replaced long before I bought the place. I learned the value of a decent home inspector at that point.
I also walked away with almost $90,000, which served as a great downpayment towards my newer Condo which I purchased with my then-boyfriend, now husband.
I remember being amazed at the new choices in Mortgages, which now included Interest-Only, and 2 & 3 Year ARMS with extra-low rates and payments. I kinda wondered to myself then, what happens if you don't refinance and get stuck with these loans? Our Mortgage Guy (Washington Mutual) explained that you'll always be able to refinance!
We ended up taking a Conventional 30-Year Fixed and buying a newer, nicer Condo. Which we turned around, and sold three years later, and traded in for our current house. The money from that sale was significant, and once again, allowed us to trade up for a much nicer house.
Eddie. I just wanted to say I completely, 100% Agree with your post. People today, think they are going to start their journey in their dream home. The truth to the matter is, it takes time. It takes time and sweat equity to achieve the American Dream.
People really do need to have that explained to them.
