3 ms·

I have a death grip on my 3% mortgage and thank the stars I got in just before things went more to shit.

LeifCarrotson 3y ago
In 2015, I bought a 2500 sqft home in a great school district on 1.5 acres. Zillow says it's now worth $330k, and would need a mortgage of roughly $2800/mo. Six doors down, a neighbor is renting for $2100/mo. I'm at 2.8%, paying $1100/mo on a 15-year $130k mortgage. I got lucky. I feel bad for my friends and relatives who did not join the market at the right time.
- jeffwask 3y ago
  I got burned on my first house and ended up short selling in 13-14 after the first collapse when I moved. I was gun shy about buying when I moved to Texas and missed the really cheap houses. My initial plan was buying in 2022 but I am so glad my wife pushed us to go for it in 2021 or I would be paying at least a grand a month more in interest or be in a less ideal home.
SoftTalker 3y ago
I think my first mortgage in the mid 1990s was around 7%. I remember double-digit rates in the late 70s/early 80s though I was too young to really care about it then. Home prices didn't inflate so crazily then either. Rates are still low, historically. But as they are moving up from very low, the increases are huge, percentage-wise. Most of the reason home prices have inflated so much in the last decade or two is that borrowing has been very cheap. https://finance.yahoo.com/news/tracking-mortgage-rates-1970s-now-180019176.html https://finance.yahoo.com/news/tracking-mortgage-rates-1970s... If rates return to their historical averages, we may see home prices deflating or at least not increasing for a while.
- dh2022 3y ago
  For home prices to deflate people would have to sell at lower prices - in some cases below their home equity. In these cases sellers would have to basically pay the bank the difference. Given how affordable 3% rates are, I think people would not sell.
  - bequanna 3y ago
    What you’re referring to is called a “short sale” and they are not uncommon during recessionary periods.
  - aidenn0 3y ago
    > In these cases sellers would have to basically pay the bank the difference Or they can default. Mortgages in the US are typically limited recourse, not full recourse. Of course that makes you a pariah to lenders for the next several years...

In 2015, I bought a 2500 sqft home in a great school district on 1.5 acres. Zillow says it's now worth $330k, and would need a mortgage of roughly $2800/mo. Six doors down, a neighbor is renting for $2100/mo. I'm at 2.8%, paying $1100/mo on a 15-year $130k mortgage. I got lucky. I feel bad for my friends and relatives who did not join the market at the right time.

jeffwask 3y ago
I got burned on my first house and ended up short selling in 13-14 after the first collapse when I moved. I was gun shy about buying when I moved to Texas and missed the really cheap houses. My initial plan was buying in 2022 but I am so glad my wife pushed us to go for it in 2021 or I would be paying at least a grand a month more in interest or be in a less ideal home.

SoftTalker 3y ago

I think my first mortgage in the mid 1990s was around 7%. I remember double-digit rates in the late 70s/early 80s though I was too young to really care about it then. Home prices didn't inflate so crazily then either. Rates are still low, historically. But as they are moving up from very low, the increases are huge, percentage-wise. Most of the reason home prices have inflated so much in the last decade or two is that borrowing has been very cheap. https://finance.yahoo.com/news/tracking-mortgage-rates-1970s-now-180019176.html https://finance.yahoo.com/news/tracking-mortgage-rates-1970s... If rates return to their historical averages, we may see home prices deflating or at least not increasing for a while.

dh2022 3y ago
For home prices to deflate people would have to sell at lower prices - in some cases below their home equity. In these cases sellers would have to basically pay the bank the difference. Given how affordable 3% rates are, I think people would not sell.
- bequanna 3y ago
  What you’re referring to is called a “short sale” and they are not uncommon during recessionary periods.
- aidenn0 3y ago
  > In these cases sellers would have to basically pay the bank the difference Or they can default. Mortgages in the US are typically limited recourse, not full recourse. Of course that makes you a pariah to lenders for the next several years...