I'll try to tackle your questions, but some parts of your posting are unclear.
Your parents actually had a contract for deed, not a mortgage? If so, that's what they negotiated with the seller. You don't say what the "stupid interest rate" is. However, it's not unusual in a contract for deed situation for the interest rate to be somewhat higher than the going conventional rate.
But whatever they're paying (or, whatever you're paying on their behalf) is what they agreed to. You can get out of that arrangement by fulfilling whatever the terms are for the contract for deed--for example, by refinancing. Otherwise, the agreement stands.
You say that, since paying $2,100 in house payments since January, only $174 was applied to principle. You ask: "Is this legal?" Yes. That's how loan amortization works. Although the payment is flat, virtually everything you pay in the first few years is interest. Gradually, that shifts, so eventually you're paying more in principle than in interest.
You don't provide information on the mortgage amount (or the interest rate), but if the mortgage amount were $117,000 at 6%, 30 years, the principle and interest payments would be just about $700 a month. If you've paid 3 months of payments ($2,100), that'd be $700 a month. With those figures, you'd be paying about $117 a month toward principle. Since you're accumulating less, I'd guess the interest rate is higher.
With a mortgage of $87,000, at 9%, 30 years, your parents would owe about $700 a month. And the amortization on that works out to about $48 a month going to principle in the first few months of the loan. Is that about what the arrangement is? As I say, that's perfectly legal.
You ask: "Is it better to let this family home and 5 acres get taken away or buy another home?" That depends on a lot of factors. How much is the property worth, versus how much do your parents owe. If it's worth $150,000 and they owe $87,000, then it definitely keep it. Even if it's worth less than you or your parents owe, be careful before giving it up. Even with a contract for deed, there could be credit implications. Beyond that, your parents (or you) need to live somewhere.
You need to sit down with someone--a financial advisor, an accountant--and go over all those numbers and see what will work best for you and your parents. It's also possible that you'd be able to renegotiate the terms of the contract for deed with the seller--maybe bring down the interest rate a bit. That'd lower your payments and put more money every month toward principle.
Hope that helps.... more
This site will guide you to what is currently happening concerning foreclosures. *In 29401, 13 homes are shown as pre foreclosure. 5 are shown as REO, bank owned, and 3 close to being auctioned. Overall, this area is considered much more stable.
Full stats are there for all of Charleston county. Are more coming ? Now doubt there will be more. How many is unclear. 86% of current loans in Charleston are prime, up from 83.6% two years ago. A positive.
The mortgage broker with my company would be happy to give you more statistical insight, Greg Meyer, 843-414-1600. Another resource is the College of Charleston's Dr. Tim Allen.
49 Broad St
Charleston, SC 29401
I don't think it will affect the South of Broad market that much. Many of the folks who own SOB are PRIME borrowers but they are also a little more flush with cash, in most cases, than the typical million dollar borrower. Many of the deals to, are cash.... more
Yes is my first response - I dont think we are at the bottom of the market. However that being said there have been some good properties being sold . We would have to evaluate on a case by case basis.
Would you like me to set you up to recieve a current market snapshot and daily or weekly market updates?
Marshall Walker... more
I think if your ever going to buy now is the time! With lower mortgage rates and home prices what do you have to loose! Why pay someones mortgage?
Plus the President will be signing a buyers tax credit of up to 8,000 dollars today. One more reason to buy in 2009.... more
When data is collected on Charleston, it is collected on the Charleston area which includes areas outside of the 29401 area code. 29401 includes historic homes on the peninsula of Charleston which commonly sell for millions of dollars. I hope that is helpful! There are many homes outside of the peninsula that can be purchased for far less depending on how close you want to be to the peninsula and to the beaches. Visit my website where you can search all Charleston area homes.
Cheryll Woods-Flowers, ABR
Keller Williams Realty
What's important to keep in mind is that while your local media would like you to think the sky is falling, it's still only a small % of homeowners that are in foreclosure. Real estate, like anything else, is based on supply of demand. Lenders seem to be loosening guidelines, and some economists think that mortgage interest rates will continue to fall even if the fed has no further cuts. Talk to a local Realtor.....has the amount of inventory risen in your market dramatically? Has the average time on the market increased?
I was watching Bloomberg this morning and several of the economist feel that this market is at the bottem and on the road to recover.... more