Keep your head up, take advantage of this next collapse when interest rates drop. You could refinance to save money.
You only lose equity as an “investment” not value of having your own home. Another thing is, if you didn’t put 20% down to avoid PMI, if you lose some worth when the market crashes, that might work in your favor when you refinance and avoid that, saving you even more money!
We bought in 2021 before prices got too high (still higher though) and rates went up. We did less down to get in, after 3 years of paying a little extra and the market being up, we got PMI removed, saving about $100/mo (even without a refi). I’m using simple numbers as an example, but it you bought a $400k house (roughly US median) and put “only” $60k down, if the value drops to ~$300k and you’ve paid down the principal enough, you’ll hit your 20% equity. No PMI.
The downside to all this, when housing goes down people can’t refi if they have negative equity. So while it’s not an official loss you can be limited on borrowing power, which means for people like me with 6.5% rate and less then 20% equity. Good chance I wouldn’t be able to refi until economy improves and interest rates climb. I live in a pretty good spot in CA where I doubt prices would go down more then 10% in any type of correction but for people putting down 3%-5% good chance they’ll be in negative equity
unitedwithme@lemmy.today 5 weeks ago
Keep your head up, take advantage of this next collapse when interest rates drop. You could refinance to save money.
You only lose equity as an “investment” not value of having your own home. Another thing is, if you didn’t put 20% down to avoid PMI, if you lose some worth when the market crashes, that might work in your favor when you refinance and avoid that, saving you even more money!
We bought in 2021 before prices got too high (still higher though) and rates went up. We did less down to get in, after 3 years of paying a little extra and the market being up, we got PMI removed, saving about $100/mo (even without a refi). I’m using simple numbers as an example, but it you bought a $400k house (roughly US median) and put “only” $60k down, if the value drops to ~$300k and you’ve paid down the principal enough, you’ll hit your 20% equity. No PMI.
Polisheocket@lemmy.zip 5 weeks ago
The downside to all this, when housing goes down people can’t refi if they have negative equity. So while it’s not an official loss you can be limited on borrowing power, which means for people like me with 6.5% rate and less then 20% equity. Good chance I wouldn’t be able to refi until economy improves and interest rates climb. I live in a pretty good spot in CA where I doubt prices would go down more then 10% in any type of correction but for people putting down 3%-5% good chance they’ll be in negative equity