San Diego, you have a world of hurt coming your way.
2009-09-09: As an Exotic Mortgage Resets, Payments Skyrocket
Edward and Maria Moller are worried about losing their house — not now, but in 2013.
Like millions of buyers during the boom, the Mollers leveraged their way into a house they could not otherwise afford by taking out a loan that required them to make only interest payments at first, putting off payments on the principal for several years.
It was a “buy now, pay later” strategy on a grand scale, meant for a market where home prices went only up, and now the bill is starting to come due.
“I’m praying for another boom,” said Mr. Moller, 34. “Otherwise, we’ll have to walk.”
The Mollers bought in 2005, paying $460,000 for their three-bedroom, thousand-square-foot house. A quick refinance a few months later supplied cash to pay debts. Now the house is worth perhaps $310,000. After their interest-only period is up, they expect their monthly payments to increase 20 percent if not more.
Where do you think this house will be at bottom?
8429 Dallas St, La Mesa, CA
3 beds, 1.5 baths, 1,054 sq ft