Short Sale, Foreclosure and Strategic Default

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Tuesday, March 1, 2011

Is the the time to buy real estate now?

If Your Goal Is to Buy Low, Buy Now!
Let’s say you were going to take out a $200,000 30-year-fixed-rate mortgage in November of 2010. At that time, interest rates were 4.17% (as per Freddie Mac). Your principle and interest payment would have come to $974.54. According to the most recent report from Case Shiller house prices fell 3.9% in the 4th quarter of 2010. The most recent report from the Federal Housing Finance Agency shows a 0.8% fall in prices. Let’s use the larger percentage decrease: 3.9%.

For the sake of keeping the math simple, we will now say you can get the same house with a $192,000 mortgage (4% discount from November price). Interest rates are now 4.95% (as per Freddie Mac).

Your principle and interest payment would now be $1,067.54.

By waiting to pay less for the PRICE of the house, the COST increased $93 a month. That adds up to $1,116 a year and over $33,000 over the life of the loan.


3 comments:

va short sale said...

With the increase in foreclosures lately you may have heard the term short sale and wondered what it was. A va short sale is when the lender will accept less than the full amount due on a mortgage when a property is sold.

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