My realator put in an offer for a $300,000 dollar home but wrote in 6% for a down payment and closing costs. So the offer is now $320000. However, he says I won’t get any of that back?
Yhe downpayment will go toward your loan to lower the balance and the closing costs are just that, the cost for closing the loan.
Did you not want to put the 6% down and know that there would be closing costs associated with the deal?
With the oil and housing bubbles bursting, prices us ordinary folk pay are returning to their lower, more natural levels?
Ask your Congress person if this is true. Please tell me if it’s false.
The present mess is partly the fault of the Bush Admin because the SEC hasn’t been doing its job. But the "investment bank crisis" has been brewing since 1913 when CONGRESS gave up its Constitutional power to "coin money and regulate the value thereof" to the bankers. In 1913 CONGRESS gave us the Federal reserve (which is not government but bankers) and the income tax.
It started with paper money. Read your dollar bill, it says Federal Reserve NOTE. A note is an instrument of debt, a promise to pay, not actual payment. So we’ve been using IOUs to do business.
In 1934 America went bankrupt. So by law, people were forced to line up at the banks and trade in their gold coins (which is real money) for paper. In 1964 the government mints took silver out of the coins. Ah, now inflation can really start. The bankers can print all the money they want, loan it into circulation.
Since then the bankers have invented all manner of "investments" like "derivatives" and "hedge funds" which has resulted in a house of cards allegedly built on real estate loans.
For the last 20 years that house of cards has gotten taller and shakier. Where was government oversight? Where has the Securities and Exchange Commission been? Then a few years ago CONGRESS made the bankers start loaning "sub-prime" to people who they shouldn’t have loaned to, but as long as the payments were being made, the bankers were happy to collect the interest.
Over the last few years the Federal Reserve (which is the bankers, not government) has kept interest rates too low. Resulting in lots of people getting adjustable rate mortgages at the bottom of the interest rate cycle. Bankers aka Federal Reserve raise the rate (to curb inflation which they created by making money out of thin air) people’s payments go up, they can’t afford the payments and the house of cards starts to get very shaky.
Meanwhile, the last 2 years the Fed has been printing money and creating credit like crazy called inflation. On the world oil market, oil needs to be paid for by every country in "dollars". Rampant inflation means it takes more dollars to buy the barrel of oil. Lehman, which just went under, was a major "speculator" driving up oil prices.
The reason oil prices have recently plunged is that their speculative bubble burst, as all bubbles will. So combine the housing bubble bursting, oil bubble bursting, we see the house of cards falling and major investment firms and insurance companies going under.
Can we blame Bush? Sure, the SEC has allowed this game to continue to the breaking point. But the true culprit is CONGRESS for not at least keeping a leash on it’s creation from 1913. CONGRESS is supposed to "regulate the value" of money, not the bankers.
But Congress persons are so busy getting reelected every 2 years they probably never had time to actually read The Constitution.
Meanwhile, people got suckered into investing 401k and IRA in the stock market, which is basically gambling with the speculative bankers.
So the current mess (and it’s not over yet) has been brewing for a long time and nobody in government, which is supposed to be providing oversight of their created corporations, has done their job, since forever. Maybe because the government folks have somehow benefited from . . . oh, no, that’s impossible, our public servants would never . . . SELL US OUT for their own benefit . Inconceivable. 
Anarchis, thanks for providing an important piece of the puzzle. Actual knowledge is hard to find on Y/A
Some of what you are saying is true, but they had safety in place up to 1999……
You can Blame Bill Clinton and a congress of 1999 for this resent crisis, it’s not all FRB fault. This is investment Banking problems.
Glass-Steagall Act of 1933 was designed to prevent the kinds of speculative conflicts of interests that pervaded Wall Street in the 1920s and helped bring about the Great Depression and this resent crisis.
In 1999, the law banning brokerages and banks from marrying one another — the Glass-Steagall Act of 1933 — was REPEALED , and voila, the financial supermarket has grown to be the places we know as Citigroup, UBS, Deutsche Bank, et al. But now that banks seemingly have stumbled over their bad mortgages, it’s worth asking whether the fallout would be wreaking so much havoc on the rest of the financial markets had Glass-Steagall been kept in place.
With the stroke of a pen, Bill Clinton ended the long saga of Republicans and Democrats, working in concert, for their puppet masters (the bankers) with his signing of the ‘Financial Modernization Bill’ (Nov 12, 1991). As he signed his name, William Jefferson Clinton symbolically signed the death warrant of a level playing field. Clinton & both parties knew better than FDR and our Supreme Court.
Nov 12-1999, President Clinton stated, "Glass- Stegal (FDR Banking Bill) is no longer appropriate for our economy. This was good for the industrial age.
The (1999) Financial Modernization Bill is the key to rising paycheck and great security for ordinary Americans" (sounds like Obama speech).
Tell this to Michigan – NH – California – Georgia etc. The public was distracted from one of the most important pieces of legislation in this nation’s history being signed by Bill Clinton, with round the clock coverage, of the Monica debacle.
Undecided-independent
Is Obama still giving the 8K credit for first time home buyers>?>?>?
The 8k federal credit is over. You would have had to have a house under contract by April 30th, 2010 and close escrow by June 30th, 2010.
Now, in CA, there is a special credit of 10k for first time buyers. It began May 1st, 2010, and is on a first come, first served basis. That means, when the money runs out, the credit is over.
You need to get with a realtor and find out if the funds for this credit have been depleted yet.
It seems to me the youth that voted for Dear Leader are too young to remember life under histories greatest monster (Simpson reference) Jimmy Carter.
They are going to be in for a bit of a shock, this self absorbed Generation is going to have to learn to do without!! I’m referring to energy, money, jobs, high mortgage and inflation rates. Enjoy! You voted for a socialist who is going to give you nothing, but expect you to share the pain of paying off all the bureaucratic friends he will bring to Washington.
oh well in 2036 you will be saying the samething to the next generation of gullible young suckers. But you will be the ones paying for it!
Your thoughts
I agree Bush was a disapointment, but this mess was caused by Democrats in congress who forced banks to loan to people who couldnt afford loans: ie inner city people you can interpit that how you will.
i agree but your question is more of a comment rather than a real question.
I live in NC and i am 21 and just started my job with a police department, i start off at 30,000 a year.
now my question is there is a house that i am attempting to buy, it is 89k (3 beds, 1 bath, and huge kitchen, a very nice house overall), i have talked to my bank and they said i may be able to receive 100% financing but i will have a (5 year i think) adjustable rate mortgage, and right now the rate is 4.7%.
my payments will be around 400 i think she said, but i don’t know how much i will have extra to pay for, (ex, lights, cable, etc.)
so my question is what should be my average monthly payments altogether and do you think it is a smart idea or should i find a cheaper house?
sorry i forgot to mention the bank and the rate info, but it is SECU (state employees credit union) and she said that the highest the rate could go would be 12.5% next time, but im new to this and all so thanks for your input!
I checked the SECU website and they have a 4.75% initial rate on a two year adjustable that can increase no more than 1% every two years and 8% over the life of the contract. Your initial payment for an $89,000 loan for 30 years would be $464, not including taxes and insurance. Based on historical averages, chances are strong your rate would go up to 5.75% after two years which increases the paymenr to $516. In a worst case scenario it increases to $569 for years 5-6, $620 for years 7-8 and $671 for years 9-10.
The website says there is no mortgage insurance to add to the payment.
They also offer a five year adjustable with a start rate of 5.75%, but it only adjusts every five years and can go up nore more than 1.5% per adjustment. The initial payment would be $519 plus taxes and insurance for the first five years. In a worst case scenario that payment increases to $597 for years 6 through 10. Assuming rates go up, your total of payments is lower for the two year adjustable program for at least the first eight years.
You didn’t say if you have other debt, but assuming $200 per month for taxes and insurance you are probably OK as long as your other monthly credit payments don’t exceed $400 or so. That would keep your debt/income ratio under 45%. I’m not a big fan of adjustable rate mortgages, but these will take a lot longer to get to a really high rate than most. USDA is also making zero down loans again at fixed rates under 5% , also with no mortgage insurance and you also may qualify for home financing assistance through the North Carolina Housing Finance Agency. They have low or zero down programs with fixed rates.
You can call the utility companies to find out what utility bills for this home have been in the past.
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