Patch Tuesday: Did you watch Oprah yesterday?

[StrawberryGal]

I was watching Oprah yesterday and this lady was talking about mortgages, credit cards debts, etc. This lady taught the audience valuable information about if you default on one of your creidt cards, all of your credit cards interest rate will go up to 30% all by just because you miss one payment on one of your credit cards! That can affect your credit scores.

That's goes the same for home mortgage, if you miss the payments, the bank will foreclose on your house. The banks do not want your house, they want you to call and work things out such as refiancing to a better interest rate or recommend Fixed Interest Rate that only your house payment stay the same, but the property tax and home insurance that are included in your house payment will go up every year by only between 50 to 100 more a month depending how much your property tax and home insurance bills. The lady on the Oprah explained that most home owner buyers did not realize that they have to leave some money in the budget for property tax, home insurance, and maintainces to keep your house running smooth and good condition. That's why so many people have trouble paying thier house payments because they did not include the property tax, home insurance, and home maintainces (such as new roof replacements, dishwasher, washer and dryer, electicial problems, plumbling problems, etc.) payments.

However, alot of people do not call the bank because they are either too embarrassed to ask for help, hoping the problems will go away, or think they can pay it off later when they come into money such as winning lottery.

 

[refi-rep]

I was watching Oprah yesterday and this lady was talking about mortgages, credit cards debts, etc. This lady taught the audience valuable information about if you default on one of your creidt cards, all of your credit cards interest rate will go up to 30% all by just because you miss one payment on one of your credit cards! That can affect your credit scores.

That's goes the same for home mortgage, if you miss the payments, the bank will foreclose on your house. The banks do not want your house, they want you to call and work things out such as refiancing to a better interest rate or recommend Fixed Interest Rate that only your house payment stay the same, but the property tax and home insurance that are included in your house payment will go up every year by only between 50 to 100 more a month depending how much your property tax and home insurance bills. The lady on the Oprah explained that most home owner buyers did not realize that they have to leave some money in the budget for property tax, home insurance, and maintainces to keep your house running smooth and good condition. That's why so many people have trouble paying thier house payments because they did not include the property tax, home insurance, and home maintainces (such as new roof replacements, dishwasher, washer and dryer, electicial problems, plumbling problems, etc.) payments.

However, alot of people do not call the bank because they are either too embarrassed to ask for help, hoping the problems will go away, or think they can pay it off later when they come into money such as winning lottery.

That person makes a valid point, why let the home you ve worked so hard to keep slip away, there are options.

 

[Special_K44]

Yesterdays Oprah

The person was Susan Orman.

 

[StrawberryGal]

The person was Susan Orman.

Thank you for the name! That was the lady on Oprah's show yesterday.

 

[StrawberryGal]

That person makes a valid point, why let the home you ve worked so hard to keep slip away, there are options.

Yes, I agree! There are options to work out something with the banks.

 

[Agee]

Inflated Home appraisals...

Cuomo: appraisers inflated home values

 

[StrawberryGal]

No, I didn't catch that. I wish I would have, but I was watching CNBC talk about the FED's rate cut yesterday afternoon. Sounds like it was a good show though...

You bring up a couple of interesting points. The first notably about credit cards. Could it be one of the reasons why Cramer said to keep your credit cards?

Cramer: No really, dump your house

Another serious issue is home maintenance. I get a kick out of all the people in here that extol the virtues of home ownership and price appreciation, but always fail to mention that sooner or later someone has to spend some money fixing the place...

That's why I always recommend using this New York Times rent vs. buy calculator because it allows you to add maintenance into the calculation. You're supposed to figure 1% of the value of the home annually towards maintenance...

http://www.nytimes.com/2007/04/10/b...1187382259-Egru1BPvnQtlJYlNfdubcw&oref=slogin

Last, don't buy to far into that stuff about "banks wanting to help you by adjusting your interest rate." The reason being, if your loan was sold to an investor, then they are expecting to make a profit, not give you money instead. There's been a lot of stories that say "it just isn't so," especially regarding Countrywide...

I could not watch the video you included in the link because it is not "closed captioned" for the deaf.

About the credit cards, Susan on Oprah's show yesterday told the audiences never spend more than what you earn. If you could not pay off the credit card balance by your next payday, do not purchase the items you could not afford. It will hurt you in a long run because you are spending more in interest than you paid for the products. Best thing to do is save your money that you have left over from each paydays after paying off the normal household bills, and purchase the new couch, lawn riding mower, or whatever is that you need. Credit Cards are good for in case of emergencies such as heat pump busted in the middle of winter and you need new heat pump to keep your house and family warm in winter or your car break down and you need new parts in order to drive to work again.

Your rent is included the money for repairs, home insurance for the owner, property tax for the owner to pay his home insurance property tax that you are living in. Technially, your landlord is laughing at you for your ignorant of the benefits of being homeowner and landlord. Landlord is making money off you to pay his mortgage, property tax, home insurance, etc. When the landlord decide to sell, he will get all that money to keep when it was your money that you spent in rent! You will not see one cent of it when the landlord decide to sell his house and make profits off your rents.

You can not get benefits on your taxes return when you file your taxes to get decutible (spelling?) for new windows, doors, insultations, etc. Also, you couldn't get any benefits for having a mortgage, equity, property, etc.

Sometimes, renting is good if you could not afford to buy a house, move around alot due to job transferring all the time, going through divorce, etc. However, if you are planning to stay in the area for long time, buying and owning a home is much better benefits than renting a home.

It is an American's dream to own a house and property. People will always want to buy a house because it is an American's dream. Also, it is just nice to see twice or three times more of money back after you sell the house and property to purchase a bigger house when you need to upgrade. For some people, downgrading may be needed and have thier mortgage paid in full when they buy smaller house and that way they do not have to worry about paying mortgage and enjoy thier golden years of being "retired" and grandparents of the grandchildren.

Remember, there are pros and cons of being homeowners and rental tenants. Every one have thier own reasons.

 

[StrawberryGal]

Inflated Home appraisals...

Cuomo: appraisers inflated home values

Yesterday on Oprah's, one of the audiences have trouble selling her house for over a year now. Susan the guest speaker on Oprah's show told the lady that is because she live in Michigan where all the jobs are gone and people are moving out of the area to where the jobs are to make livings. Michigan is going through a rough patch. Anytime, when the town lost thier main job markets, housing market gets hurt because no one would be able to afford to buy a home and be able to make the payments when there are no jobs in the town to help employees to bring paychecks home to pay thier bills, mortgage, food, clothing, etc.

Southern Maryland do not have that problem because we have military bases that will keep the jobs here for everyone who want to live in Southern Maryland. Patuxent River is the main job factory for St. Mary's County. Indian Head is the main job factory for CHarles County. As for Calvert County, I am not sure what's out there, but they do have alot of people living in Calvert that work at Patuxent River, Indian Head, Annapolis Naval Air Base, Washington D.C., etc.

The housing market in Southern Maryland is doing pretty well considering some other states and areas are having problems selling houses.

Most people who bought the houses have A.R.M. mortgage, which is very bad loan to get in first place. Having a fixed interest rate mortgage loan is the best loan you can get because the mortgage will not go up so high that you couldn't afford it. Payments stay the same for 30 years and only go up a little every year to pay for property tax and home insurance bills that home owners are required to send to thier mortgage to included into the payments. However, homeowners can pay the property and home insurances if they have money to pay for it that they do not need to send to thier mortgage company to help pay for it.

I know alot of banks are very willing to work with homeowners if they are having trouble making the payments. Banks may be in for business, but they do not want your house and get stuck with so many foreclose houses that they could not get thier money back. They are losing money. Banks are in the business to help people to keep thier houses, give loans for thier needs such as car to get to work, etc.

There might be some banks that aren't very good to work with. It is all about doing your homework before you buy a house. Research all banks' mortgage plans, loans, etc. before you decide which banks you want to do the business with. Alot of people do not do thier homework to figure out thier monthly budgets to include payments, utilities bills, home insurance, property tax, home mainteneces, vehicles insurances, vehicles payments, etc.

If you can afford to pay $2,000 in rent. Remember, the rent included the property tax, home insurance, home maintenaces. Therefore, you should look for a house that you could afford to pay $1,200 a month and leave the rest for property tax, home insurance, and home maintenaces.

 

[StrawberryGal]

You know the other big scam that caused prices to artificially rise was adding the closing costs onto the sales price and then raising the sales price to reflect them.

For example: house is for sale for $300k and the buyer has no money. Real estate agents increase house price to $315k and the $15k closing money goes to buyer. Sales get booked as being for $315k. Guy down the street puts his house on the market, that's exactly like that one, and says "hey, they got $315k," and adds closing money to his price for another no-money buyer. Appraiser comes along and says "hey, they got $315k, the market is going up, his is worth that, this is new value!"

Some houses have closing cost is paid for by the sellers. Houses have listing that tell you if the sellers will pay for the closing cost or not. It is all about reading the fine lines before you sign the contract and purchase the house.

Yes, the house will get marked down as $315k if the buyer paid for the closing cost along with the house's price.

 

[StrawberryGal]

Sorry, here's the transcript...

The Rancid Truth: An Orange County Real Estate Housing Blog: Cramer Says: "Dump Your House"!

Thanks for the transcript. Yesterday on Oprah's show, Susan told the audiences to pay off the credit cards balances off first before paying down the mortgage and/or equity loans. Credit Cards have higher interest rates and you will not see one cents back from them if your products you purchase get broken, trashed, or sold.

Also, credit cards is what make your credit scores. It tell the sellers of what kind of person you are. Are you on time with paying your bills or are you always late? Are you someone that we can trust to do our business with or not? Credit Scores are very important to have. You have to use your common sense and brain to make sure you don't screw up your credit cards bills or buying fancy "toys" and useless things.

Once you pay off your credit cards balance, you can work on paying off your vehicles payments, then your home mortgage to pay it off faster than if you pay the requirement payments. For example, if you throw in $20 or more with your requirement payments a month in the payment to apply toward to princple, you are reducing the years you have left to pay off the balance in full.

 

[somdrenter]

Southern Maryland do not have that problem because we have military bases that will keep the jobs here for everyone who want to live in Southern Maryland. Patuxent River is the main job factory for St. Mary's County

Along with the number of jobs, you must also take into account income. When average home prices are at or over 4x average family income, something must come along and fill the void left behind by toxic mortgages and loose lending to keep prices propped up.

 

[smilin]

Thanks for the transcript. Yesterday on Oprah's show, Susan told the audiences to pay off the credit cards balances off first before paying down the mortgage and/or equity loans. Credit Cards have higher interest rates and you will not see one cents back from them if your products you purchase get broken, trashed, or sold.

Also, credit cards is what make your credit scores. It tell the sellers of what kind of person you are. Are you on time with paying your bills or are you always late? Are you someone that we can trust to do our business with or not? Credit Scores are very important to have. You have to use your common sense and brain to make sure you don't screw up your credit cards bills or buying fancy "toys" and useless things.

Once you pay off your credit cards balance, you can work on paying off your vehicles payments, then your home mortgage to pay it off faster than if you pay the requirement payments. For example, if you throw in $20 or more with your requirement payments a month in the payment to apply toward to principle, you are reducing the years you have left to pay off the balance in full.

Suzy Orman is right on as far as keeping your credit score up there.
However, listen to some of the stuff Patchy is saying: buying a home is a continuing exercise in maintenance that you have to keep in mind.
Most, if not all mortgages include your Principle,Interest, Taxes,Insurance, this is called PITI or your mortgage payment. If you buy the home for cash - then you had be pretty good at putting away money for a rainy day to pay for these expense plus normal wear and tear.
The Mortgage meltdown we have today was caused by people deciding that mortgages were great investment vehicles. They told loan companies they would buy the mortgages and package them to investors who then sold them to other investors overseas. The loan people assumed the market would always go up and told the applicants they could get out of their artificial loan and still make money.
Well the market went down, and still is going down.
Interestingly enough, government backed mortgages have had little exposure because their requirements were higher. Today they are coming back as the way to go if you don't have a lot of money to put down on a home.