Stockton, CA the foreclosure capital of the USA. Stockton has acquired the unfortunate distinction of having the highest foreclosure rate of any US city, with one in 27 homes left counting the credit crunch, according to Realtytrac, an online marketplace for foreclosure sales.
Many of these unfortunate homebuyers became victims of the adjustable rate mortgages offered to sub-prime borrowers, buyers with shaky credit who were lured into homes with inflated prices. Many of these families were able to obtain 100% financing and even finance their closing costs. They got in with a low “teaser rate” and then the interest rate went up. Now they find themselves in a situation where they cannot afford their house payment, yet they cannot sell for what they owe, they have no equity. This is a very good reason to have a qualified Realtor on your side. One thing that the general public does not always realize is that onsite sales agents represent the builder, not the home buyer.
Refinancing, that is also an area that people get into trouble. I have heard so many folks saying that they refinanced and were able to get money back through their equity and they are going to buy a car or new furniture, etc. Why would you want to pay 30 years on a disposable item that you will use for 10 years or less? Yes, it is at a lower rate but you are paying on it for 30 years. I can’t tell you how important it is to talk with a trusted individual who deals with this all of the time before you walk into a bad situation.