What is the answer for homeowners and credit?
I am watching the debate (October 15, 2008) and thought I heard Senator McCain say he would buy my mortgage if I am a homeowner without a default. That is exactly what I want to hear. Do you think it will happen? Senator Obama is promising no such thing and I am an Obama supporter. This may be a turning point for me.
I took the opportunity to pay interest only for seven years with the intent to refinance my mortgage loan. I have student loans that are about the same amount I pay for my mortgage and wanted to pay them down before having that principle and interest house payment. What I need (along with many other homeowners) is for some lender to believe that I will continue to be a good risk by paying my mortgage on-time AFTER they refinance me for the full amount of my current loan principle. If the government is willing to bail out predatory bankers/mortgage backers, why aren't they willing to bail out my inflated mortgage provided by the corrupt mortgage company? I have proven to be a good risk.
Thanks Maxmom. I need all the reality I can get right now.
I disagree Reena. Homeowners move about every seven years. Jobs are the number one reason for a move. If a person purchases a home, in seven years that home is usually still worth about the same. This broken economy is an unusual situation even for the low risk. These types of loans became commonplace when the market was inflated. I think everyone would agree that the middle class are the ones who got hurt in the most. College graduates just starting out in their careers were the most hard hit by these predatory lenders.
- evilattorneyLv 71 decade agoFavorite Answer
Remember something. Any proposal like this has to pass Congress - a Democratic Congress. The proposal McCain made will not especially since he wants to pay the banks 100% of debt that is no longer worth 100%.
Also, do you really believe that if McCain got in he would keep his campaign promises? Would you like to buy a bridge?
- ReenaLv 71 decade ago
McCain is not going to buy your mortgage or anybody Else's for that matter... just a lot of noise before the election.
Your problem is that you are right now able to make those payments because you are in the "interest only" phase. During your teaser rate you are deferring any payments towards the principal and it may be even the case that the principal mortgage amount that you owe has increased over the years.
You have a house that has decreased in value and you are only paying the interest on a loan. After the seven years "teaser rate" is up you will still owe the same amount as on day one. Basically just paying "rent" to the bank, that is it. Unless your house has gained enough equity to be worth more than your principal mortgage you won't be able to refinance into easier loan terms and even a refi will mean that you end up paying principal and interest and your mortgage payment will reflect the "missing principal payment". In other words your mortgage will go up. Your mortgage wasn't inflated you just wasted 7 years of making nothing but empty interest payments that do nothing to reduce the principal sum of your mortgage. Basically, you rented for the last 7 years.