We’re Underwater! Yay!

Well, not really.   Our mortgage is… as the house has lost a quarter of its value last year, and a few years of mortgage payments have effectively turned into rent payments.

This happens again next year, we really WILL be underwater.

So why am I happy?  Well, it’s this little thing call “sunk costs” and “property taxes.”  What’s paid is already out the door — no getting that money back again.  But lower home value (and it’s down by a third over the last two years) means in the future, that we’ll be paying that much less out each month in property tax escrow… meaning we actually pay down the house faster with the same monthly payment we’ve been making.

So… celebration time!  All I gotta hope for is that the politicos continue to screw things up, and the house will be paid off in three or four years!

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  1. Our downpayment is long, long gone, but our mortgage is holding at 6 1/2 feet under water. We’ll be on the 30-year plan, ourselves….

  2. drteine

     /  May 3, 2010

    In the same boat – but been that way for 2 years now and I think I’m more like 1/3 under value of what I paid (30 year fixed mortgage). That being said – I have not seen my property taxes really decrease, but I know I could never sell my house for the value they say it is worth. I’ve put a lot of work into the place, but pretty much I traded one boat anchor for another when I moved from Michigan (now that was a house seriously underwater as of 2005). Thankfully I like it hear and I have good continuing employment prospects here, so I’ve resigned myself to my fate and I’m content with things the way they are.

  3. Well, 3-4 is actually completely inaccurate for us, too. But if you’re looking at your house as where you live, rather than as an investment to flip….

  4. We’ve been paying a little over a 15-year rate for a while now, and, actually, we’d be really closing in on a 3-year payoff, except for this little expense known as Day Care… =)

  5. Bethany

     /  May 4, 2010

    It helps that Texas recently passed a Constitutional amendment that reads, “The constitutional amendment providing for uniform standards and procedures for the appraisal of property for ad-valorem tax purposes.” You are going to be paying property tax on what your home is actually worth, rather than “what it possibly might be worth, or what the original value was.” That’s going to help in the long run.

  6. Yep. One of the various amendments I shouted to the rooftops. Property tax abuse has been a real issue here in Texas for far too long.


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