We have equity in our home again!

**snafu** · 08-14-2013, 03:49 PM

Home value is so democratic, it's merely what a willing buyer will pay and a willing seller will accept. Does your equity result from an increase in home values in your community or an examination of your principal to interest ratio? I wish people better understood how mortgage amotorization tables worked. Interest is front loaded so when you pay a bit more than your regular payment directly to principal, it can make a significant difference. Most often the sum paid monthly includes other costs like municipal taxes and any applicable mortgage insurance HOA, or fees. The sum applied to reducing principal is miniscule. What is the interest on your mortgage?

**Petunia 100** · 08-14-2013, 03:53 PM

That's awesome, Asmom! Congrats.

Oh, how I look forward to the day I can say the same.

**asmom** · 08-14-2013, 04:21 PM

Originally posted by snafu View Post

Home value is so democratic, it's merely what a willing buyer will pay and a willing seller will accept. Does your equity result from an increase in home values in your community or an examination of your principal to interest ratio? I wish people better understood how mortgage amotorization tables worked. Interest is front loaded so when you pay a bit more than your regular payment directly to principal, it can make a significant difference. Most often the sum paid monthly includes other costs like municipal taxes and any applicable mortgage insurance HOA, or fees. The sum applied to reducing principal is miniscule. What is the interest on your mortgage?

Our equity is the result of an increase in home values in our community, although our estimated value now is still about 15% less than we paid for our house. We were very hard hit by foreclosures (I live in the Atlanta area) and at one time houses were selling for half of what we paid for our house (bought before the real estate run-up). But homes are now selling in our subdivision again, so prices are easing up. I fully understand that interest is front loaded but I think it's clear that after 15 years, our decline in equity was related to a decline in real estate value. ! Our interest rate is 3.875% now, we did a no cash out refi a couple of years ago from 5.78%.

**KTP** · 08-14-2013, 04:28 PM

Congrats on coming up for air...tough being underwater on a house.

It is hard to wrap your head around how low house prices are right now. It would cost 2 to 3 times what our house is worth to rebuild it, and that isn't even counting the nice riverfront lot we have. I don't understand how new houses can command such high prices on tiny lots with no trees or view.

We will be lucky to sell our house next year for what we paid for it 12 years ago.

**Jerry91** · 08-14-2013, 08:53 PM

Congratulations! It's really nice to note that you are no more underwater. Home prices are improving as the market situation is improving and the inventories are decreasing in number. As a result, quite a lot of people now have equity in their property.

**disneysteve** · 08-15-2013, 04:57 AM

Originally posted by asmom View Post

For the first time in years, we have equity in our home- a whopping $1500! I could be be bitter that after 15 years of never missing a payment, that's all it's worth but I appreciate no longer being under water.

Congrats.

This really illustrates how wrong so many people were who just said, "We're underwater so we're going to walk away." All they had to do was hang in, keep making their payments and enjoying their homes, and wait for the market to recover. The value of the house on paper really is irrelevant unless you needed to sell it. If you were planning to stay, it didn't much matter.

The same is true of all of the people who bail out of their investments when the market drops. Folks who sold in 2008 missed an incredible recovery. Our personal portfolio is higher than ever largely because we not only held on through the downturn but continued to invest more and take advantage of the low prices.

As the old saying goes, patience is a virtue.

**greenskeeper** · 08-15-2013, 06:12 AM

I guess the FED's asset inflating quest is good for something at least...

**ua_guy** · 08-15-2013, 07:30 AM

Congrats! It's a great feeling, isn't it?

**dawnwes** · 08-16-2013, 05:35 AM

What are you basing that on?

I ask because we have refinanced twice in the last 3 years and the appraisals came in wildly different. The FIRST appraisal (2 years ago) was the highest. The appraisal that came in last October was significantly lower (over 50K lower) but probably more realistic.

However, we do have a "hard to price" home. It is a custom home on acreage and it is hard to find comps. It is in a neighborhood where everyone bought land and built their own home on so every home is very different.

**bigdaddybus** · 08-16-2013, 06:57 AM

I'm glad to hear housing values are on the rise in the Atlanta area for you and me....in the future

My parents bought a house in Alpharetta, GA for .49 on the dollar based on the origonal asking price of a high end builder going under in 2009. It was a serious buyers market down there for those with CASH.
And since my sister and I will inherit (and immediately sell) this 13,000+ sq ft home, I'm glad to hear the values are on the rise.

I bought a home in Illinois in early 2011 for $150,000 less than the replacement value the insurance company placed on the home due to lack of buyers in the area at the time. We joke and smile about being the "Beverly Hillbillies" of our neighborhood. (lowest price ever sold in the neighborhood for house that is in the middle range of homes 3500sqft to 6000sqft)

Interesting how the last few years have been a tremendous opportunity for some, and a bloodbath for others

We have equity in our home again!