Question by One Still Man: How much lowerr with the Hamp Program lower my credit rating?
My wife and I have excellent credit! My wife applied for the Obama Hamp program since I am out of work. We just found out it might lower our credit rating. I wish she knew about this sooner. How much will this Obama Hamp program hurt our credit rating? Is there an institution I can find this real number from?
Thanks
Best answer:
Answer by bdancer222
I’m not sure if or how much the program would impact your score. It could be a temporary ding, here online like a debt management program. It’s noted while in the program but on completion the notation is removed.
It may also depend on exactly whay kind of loan modification you are doing. Some of the programs may ding your credit while others won’t.
In any case, shop if you are currently out of work and are in need of loan modification for your mortgage, you really aren’t going to be looking for and new lines of credit. Losing a few points on your score won’t make a lot of difference. Certainly won’t ding your credit as bad as a foreclosure would.
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Question by happyhive7: What kind of government grants are out there to help with housing/home foreclosure?
I’m on the verg of foreclosure and need help fast! I know it may be a bit far fetched to receive a grant for home foreclosure but I’m just reasearching any possibility to help me not lose my house.Any info will help. Thanks.
well dawn666, store My husband has a full time job and we have 5 kids and we like many people in the united states has found ourselves in a hard situation, prescription so before anyone else thinks I’m a lazy bum try to not be an IDIOT first!
Best answer:
Answer by dawn666annapolis
i think the gov. has exhausted all funds available. you need a job.
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Question by belle: Is it stupid to buy a home now?
I am in college and have no money to put down. But I’m tired of throwing away money on rent. I’m thinking I can buy a small modest home, this site but I would need to rent a room to afford it. Is this as absurd as I think it is, or could this potentially be a good investment?
Best answer:
Answer by xxxyachiruxxx
You can buy a small apartment I suppose.
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Question by Jjj: Question about Real Estate Economics?
I have a question about the prices of real estate. 15 year ago, price in Ontario (A province in Canada) the average income was 42,000 a year and the average house price was 130,000 a year. Now in 2012, the average income is 48,000 a year, while the average house price is 400,000 a year (these numbers aren’t exact, but there roughly close). Incomes haven’t increased drastically, and most of the increase I imagine is justified by inflation. However, I do no comprehend a 300% increase in housing prices. Question 1, why are prices that high?
I understand the rudiments of the financial debacle in 2008, and the use of Credit Default Swaps and the eagerness of issuing risky mortgages created a lot of demand for houses, and the prices increased. However, after the financial crisis, house prices in Canada remain high! So are housing prices today remnants of the risky-mortgage credit default swap fest?
This leads to my second question. If prices have increased 300%, then shouldn’t there be a lot of money to be made by building houses and then selling them on the market? I mean, surely the materials and labor of building houses haven’t tripled as well, right!? I mean, a construction worker isn’t going to be making triple the amount he was 15 years ago! 15 years ago houses could be build for around $ 100,000, and shouldn’t the costs today be around that same amount?
So why am I not seeing everyone and there grandmother getting loans from banks to build houses (hire a few workers and an architect) and sell the house on the market for ridiculous profit margins? Why am I not seeing a growing host of real estate building investment funds, which use money to build houses and generate ridiculous returns. Build a house for 200,000-250,000 and sell it for 400,000-500,000, sounds great! But the thing is, I don’t see this happening, and there must be a reason for it. WHAT IS IT?
Is it because people are afraid of housing prices behaving like a bubble, and there concerned that it will burst right when they are building houses? Are they worried about taking such massive loans from banks on building houses? Are banks not willing to give them that much money (I doubt because they give mortgages).
I mean, why don’t I just go after university and build my a few houses and make $ 200,000 profit on each house? It seems to me that profit margins in real estate are so ridiculously high!. A mansion that 15 years ago was for 2 million now sells for 6 million.
As you can probably expect from the character of the question, I am hoping for thoughtful, intelligent replies on the nature of real estate economics.
Thank you
Best answer:
Answer by Tulip
I cannot say for Canada, but maybe it’s the same as in the US, where the Govt inflates the prices/value of housing in order to collect higher real estate/property tax. New school buildings, paved roads, police stations, transportation systems etc. Although 300% is rather high, it can be that the area has changed. If the houses had been newly build and there was nothing around in the town 15 years ago, then now a near city, it can go up higher than usual
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A couple things – without getting too far into the weeds…
1) “They’re not making any more land.” This is often the maxim for people supporting the purchase of land as an investment. You need to consider that the cost of land (especially in desirable locations) may increase faster than the rate of inflation. It depends on demand – tied to many factors, not the least of which is population growth, economic development in the area etc. You need to take the cost of land into account when you calc the cost of building a home.
2) Some cost tied to inflation. $ 130,000 in 1997 is “worth” nearly $ 175,000 today. http://www.bankofcanada.ca/rates/related/inflation-calculator/
But some things have “inflated” at a greater pace and some things simply cost more for different reasons – consider the cost of healthcare and workmens comp (not sure they have this in Canada) and other regulations have added to the cost of building a home.
3) The cost of money – to the mortgagee. 30 year mortgage rates in Canada in Jan 1997 were 8%.
http://mortgage-x.com/general/national_monthly_average.asp?y=1997
Today, they’re about 4.24%.
Cheaper money helps fuel higher sales prices, especially in bubbles. When interest rates are lower, the same monthly mortgage payment buys more house than when rates are higher.
4) The cost of money – to the builder. Sources for borrowing are drying up due to risk-averse lenders after the bubble. Spec home loans are nearly non-existent (unless you’ve got a really healthy balance sheet and some history in the business). Most banks consider them high risk and if they make these loans will charge more – this gets pushed through to the price the homebuyer pays. Additionally, with the higher risk of building spec homes, the investor (i.e. the builder) will demand a higher return on his investment – i.e. more profit in the price of the home.
In the US, home ownership is promoted and is fueled by government loan programs (FHA, etc) – that makes money cheaper for the homeowner than it might otherwise be. There are no financing “incentives” for the cost of money borrowed to build.
5) Consider how your data might be skewed. You are giving costs for an entire province! Your “average” price has gone up, perhaps fueled by large leaps in the price of real estate in major cities (i.e. Toronto) – BUT where is the land that is available to build on? How much does the land cost? And at what price can any home built on that land be sold? More importantly, that land may need to be developed with infrastructure – i.e. roads, sidewalks, sewer, water, electric. These costs can go into the price of building as well.
6) More people are spending more of their income on housing. It used to be that your housing expense “couldn’t” exceed about 25% of your income (by underwriting standards). During the boom-boom years (before the bust) some underwriters didn’t even VERIFY income! So some homeowners were spending a huge percentage of their monthly income on their housing payments – another reason for so many defaults these days. This would help explain some of the disparity between the increase in average income and the increase in the average price of a house.
Bottom line: Even the big-boy builders are having a tough time turning profits these days. The average Joe builder finds it even more difficult. Real estate is fickle. Hope this helps…