We have neglected our blog again. Some things are more important and time consuming for me lately. When the markets began to fall and home prices dropped, I decided to begin the search for our next home. We are currently renting a 3 bedroom townhouse for nearly $1000/mo. and struggling to stretch paycheck to paycheck. I realize this is mostly due to our decision to live on one income, but that decision is very important to us.
Recession hurts some more than others, and we may well be one of the families who can benefit from falling home prices. We began looking at single family homes that were in foreclosure because they were at or below our pre-approval amount. We put in a couple of offers and things didn't work out. The first offer we put in was too low and the second I decided to pull when I realized the house didn't even have gutters. Believe me I have learned much about how the hole we are in was dug.
I have been very thorough in researching each home we have considered. Looking through the register of deeds at each home equity loan and refinance of these homes has revealed much about how things came to be. We put in an offer on one home that was in great shape, when these people took out a home equity loan, they put it into the home. They seem to have been the exception. Most of the other homes were in terrible condition.
The worst of them was a home that was bought cheap from the wife's parents. At the time the home was worth about 100 thousand and they paid about 40 thousand. Immediately they took out a $60,000 home equity loan. They refinanced several times and finally they refinanced for $150,000. I have no idea where these folks spent the money, but it was not on the home, possibly it was in energy costs because in winter their bill was about $550/mo. for gas and electric. Obviously this home had no insulation. It also had old drafty windows, and the inside was far from move in condition. Where did all the money go? How many people used their homes as ATMs? It is so very sad.
What we have currently decided on is a condo. The structure is sound, the price is right, and we will not have to put every cent we save into fixing it. The location is convenient to my husband's workplace and shopping, in fact it is within walking distance of both. It is a nice 4bdrm. 1.5 bath multi-level with a little bit of a yard. There is a basement which we do not currently have, but there is no garage which we do currently enjoy. All in all we will be saving about $100/mo. and that is accounting for taxes, PMI, and condo fees! We put our offer in and are praying that things work out. I'll keep you all posted.
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Oct. 22, 2008 - Untitled Comment
Pam