Mira Mesa…

[(former)FormerSanDiegan]

92126_guy …
Your 1st is fixed for 5 years, then adjustable. Ever wonder what rate it goes to after 5 years ?
The “margin” and “index” define the rate to which it will adjust. Find your loan documents. You should be really curious as to what your loan rate will reset to since it could mean the difference between losing your home or keeping it.

For example, some adjustable rate loans are tied to the 12-month LIBOR index (that’s the “index”) plus 2.5% (that’s the margin. The current value of this index is about 3.4%. Meaning that a loan based on this index and margin would reset to 3.4% + 2.5% = 5.9%. The LIBOR has varied between 1.2% and 5.8% over the past 5 years and tends to trail short-term treasury rates.

The fact that your 1st is IO for 10-years may buy you some valuable time.

Is the 2nd a fixed rate ? If not, it’s an adjustable at a fairly high margin (prime plus 3.65%). If your second is variable, I would try to concentrate on paying it down first.

Assuming the second is fixed rate, you currently pay 2400 (1st) plus 1100 (2nd) plus taxes and insurance.

If your 1st resets to 7% for example your payment would go up by $50 per month. Not a huge deal. If it resets to 8% your payment will go up by $400 per month (starting to feel some pain, but doable).

[bob007]

interest rates will exceed 7%

[bob007]

interest rates will exceed 7%

[bob007]

interest rates will exceed 7%

[bob007]

interest rates will exceed 7%

[bob007]

interest rates will exceed 7%

[92027_guy]

FSD: Thanks, I should have mentioned that on my second, it’s fixed for 30 due in 15 (I think that’s the lingo).

I looked at my documents for the 1st.
ARM: Yes
Margin: 5.5%
Index: 3.5%
Periodic Cap: 1.0
Lifetime Cap: 6.0
Rate Floor: 3.5

I have to say none of this was talked about during the loan process, just that it was 10 years before I had to pay principal and that was a long time. No worry about the “reset thing” I would refi in 2 yrs. Doh. From my understanding this means when it resets I’m going to pay 9%? And that I’m not attached to the Libor?
Ouch, if the house isn’t worth over 500k at that time, there’s no way I will keep making payments, even if I could. Hopefully things will get worked out before 2011 though. I’m going to start exploring my options throughly, and will not make any rash decisions.

PS I have no idea what the mortage company said was my income, they just “took care of that”

[92027_guy]

FSD: Thanks, I should have mentioned that on my second, it’s fixed for 30 due in 15 (I think that’s the lingo).

I looked at my documents for the 1st.
ARM: Yes
Margin: 5.5%
Index: 3.5%
Periodic Cap: 1.0
Lifetime Cap: 6.0
Rate Floor: 3.5

I have to say none of this was talked about during the loan process, just that it was 10 years before I had to pay principal and that was a long time. No worry about the “reset thing” I would refi in 2 yrs. Doh. From my understanding this means when it resets I’m going to pay 9%? And that I’m not attached to the Libor?
Ouch, if the house isn’t worth over 500k at that time, there’s no way I will keep making payments, even if I could. Hopefully things will get worked out before 2011 though. I’m going to start exploring my options throughly, and will not make any rash decisions.

PS I have no idea what the mortage company said was my income, they just “took care of that”

[92027_guy]

FSD: Thanks, I should have mentioned that on my second, it’s fixed for 30 due in 15 (I think that’s the lingo).

I looked at my documents for the 1st.
ARM: Yes
Margin: 5.5%
Index: 3.5%
Periodic Cap: 1.0
Lifetime Cap: 6.0
Rate Floor: 3.5

I have to say none of this was talked about during the loan process, just that it was 10 years before I had to pay principal and that was a long time. No worry about the “reset thing” I would refi in 2 yrs. Doh. From my understanding this means when it resets I’m going to pay 9%? And that I’m not attached to the Libor?
Ouch, if the house isn’t worth over 500k at that time, there’s no way I will keep making payments, even if I could. Hopefully things will get worked out before 2011 though. I’m going to start exploring my options throughly, and will not make any rash decisions.

PS I have no idea what the mortage company said was my income, they just “took care of that”

[92027_guy]

FSD: Thanks, I should have mentioned that on my second, it’s fixed for 30 due in 15 (I think that’s the lingo).

I looked at my documents for the 1st.
ARM: Yes
Margin: 5.5%
Index: 3.5%
Periodic Cap: 1.0
Lifetime Cap: 6.0
Rate Floor: 3.5

I have to say none of this was talked about during the loan process, just that it was 10 years before I had to pay principal and that was a long time. No worry about the “reset thing” I would refi in 2 yrs. Doh. From my understanding this means when it resets I’m going to pay 9%? And that I’m not attached to the Libor?
Ouch, if the house isn’t worth over 500k at that time, there’s no way I will keep making payments, even if I could. Hopefully things will get worked out before 2011 though. I’m going to start exploring my options throughly, and will not make any rash decisions.

PS I have no idea what the mortage company said was my income, they just “took care of that”

[92027_guy]

FSD: Thanks, I should have mentioned that on my second, it’s fixed for 30 due in 15 (I think that’s the lingo).

I looked at my documents for the 1st.
ARM: Yes
Margin: 5.5%
Index: 3.5%
Periodic Cap: 1.0
Lifetime Cap: 6.0
Rate Floor: 3.5

I have to say none of this was talked about during the loan process, just that it was 10 years before I had to pay principal and that was a long time. No worry about the “reset thing” I would refi in 2 yrs. Doh. From my understanding this means when it resets I’m going to pay 9%? And that I’m not attached to the Libor?
Ouch, if the house isn’t worth over 500k at that time, there’s no way I will keep making payments, even if I could. Hopefully things will get worked out before 2011 though. I’m going to start exploring my options throughly, and will not make any rash decisions.

PS I have no idea what the mortage company said was my income, they just “took care of that”

[seattle-relo]

Sounds like you could use more information to get a true sense of what your payments could look like when they reset. There is a poster on here that is in the mortgage biz that might be willing to explain all the “fine print” to you. He goes by HLS, do a search for him and you can find his email. You also have the issue of your second coming due in 13 more years, I don’t have a clue what home values will be in 13-15 years, but there is a chance that even by then prices will not have returned to the peak of 2005…who knows??

I am sure that you know this, but just in case – right now since you haven’t refinanced your loans you are under non-recourse protection from the bank and the IRS, meaning they can not come after your other assets in case you do foreclose. Be very careful to preserve this protection when considering any kind of work-out with the bank. I am sure that you have read about the new bill in the Senate. If that actually does pass and could be an option for you, one of the stipulations is that this new “loan” is not “walk-away-able”, meaning there is no way out – that’s scary IMO.

Finally when thinking about what you might want to do and a potential time line, right now Fannie Mae has changed some of the rules regading people qualifying for new mortgages with a foreclosure on their record. I can’t find the link, but I believe it’s something like : you must wait 2 years to buy with a short sale on your credit report, 4 years if you have a deed in lieu, and 5 years if you have a foreclosure on your report. Of course that can always change. Just something to be aware of when timing things if you do plan on “sending in the keys”.

I wish you the best of luck.

[seattle-relo]

Sounds like you could use more information to get a true sense of what your payments could look like when they reset. There is a poster on here that is in the mortgage biz that might be willing to explain all the “fine print” to you. He goes by HLS, do a search for him and you can find his email. You also have the issue of your second coming due in 13 more years, I don’t have a clue what home values will be in 13-15 years, but there is a chance that even by then prices will not have returned to the peak of 2005…who knows??

I am sure that you know this, but just in case – right now since you haven’t refinanced your loans you are under non-recourse protection from the bank and the IRS, meaning they can not come after your other assets in case you do foreclose. Be very careful to preserve this protection when considering any kind of work-out with the bank. I am sure that you have read about the new bill in the Senate. If that actually does pass and could be an option for you, one of the stipulations is that this new “loan” is not “walk-away-able”, meaning there is no way out – that’s scary IMO.

Finally when thinking about what you might want to do and a potential time line, right now Fannie Mae has changed some of the rules regading people qualifying for new mortgages with a foreclosure on their record. I can’t find the link, but I believe it’s something like : you must wait 2 years to buy with a short sale on your credit report, 4 years if you have a deed in lieu, and 5 years if you have a foreclosure on your report. Of course that can always change. Just something to be aware of when timing things if you do plan on “sending in the keys”.

I wish you the best of luck.

[seattle-relo]

Sounds like you could use more information to get a true sense of what your payments could look like when they reset. There is a poster on here that is in the mortgage biz that might be willing to explain all the “fine print” to you. He goes by HLS, do a search for him and you can find his email. You also have the issue of your second coming due in 13 more years, I don’t have a clue what home values will be in 13-15 years, but there is a chance that even by then prices will not have returned to the peak of 2005…who knows??

I am sure that you know this, but just in case – right now since you haven’t refinanced your loans you are under non-recourse protection from the bank and the IRS, meaning they can not come after your other assets in case you do foreclose. Be very careful to preserve this protection when considering any kind of work-out with the bank. I am sure that you have read about the new bill in the Senate. If that actually does pass and could be an option for you, one of the stipulations is that this new “loan” is not “walk-away-able”, meaning there is no way out – that’s scary IMO.

Finally when thinking about what you might want to do and a potential time line, right now Fannie Mae has changed some of the rules regading people qualifying for new mortgages with a foreclosure on their record. I can’t find the link, but I believe it’s something like : you must wait 2 years to buy with a short sale on your credit report, 4 years if you have a deed in lieu, and 5 years if you have a foreclosure on your report. Of course that can always change. Just something to be aware of when timing things if you do plan on “sending in the keys”.

I wish you the best of luck.

[seattle-relo]

Sounds like you could use more information to get a true sense of what your payments could look like when they reset. There is a poster on here that is in the mortgage biz that might be willing to explain all the “fine print” to you. He goes by HLS, do a search for him and you can find his email. You also have the issue of your second coming due in 13 more years, I don’t have a clue what home values will be in 13-15 years, but there is a chance that even by then prices will not have returned to the peak of 2005…who knows??

I am sure that you know this, but just in case – right now since you haven’t refinanced your loans you are under non-recourse protection from the bank and the IRS, meaning they can not come after your other assets in case you do foreclose. Be very careful to preserve this protection when considering any kind of work-out with the bank. I am sure that you have read about the new bill in the Senate. If that actually does pass and could be an option for you, one of the stipulations is that this new “loan” is not “walk-away-able”, meaning there is no way out – that’s scary IMO.

Finally when thinking about what you might want to do and a potential time line, right now Fannie Mae has changed some of the rules regading people qualifying for new mortgages with a foreclosure on their record. I can’t find the link, but I believe it’s something like : you must wait 2 years to buy with a short sale on your credit report, 4 years if you have a deed in lieu, and 5 years if you have a foreclosure on your report. Of course that can always change. Just something to be aware of when timing things if you do plan on “sending in the keys”.

I wish you the best of luck.

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