Roseville, Rocklin, Lincoln, Loomis, Granite Bay - Placer County, California - Real Estate Blog - Souza Realty

head_left_image

Can I Afford It? Suze Orman Would Yell: "DENIED, DENIED, DENIED!!!"

Can I Afford It? Suze Orman Would Yell: "DENIED, DENIED, DENIED!!!"

I love watching the "Can I Afford It?" segment on the Suze Orman Show and I think I've found the ultimate "DENIED, DENIED, DENIED!!!" story. This one is truly outrageous...and sad at the same time.

This is not a typical situation of "Can They Afford To Buy This House?" but these are people who are getting ready to move into a custom home they have been building for the past 2 1/2 years, so their construction loan will be converting to a permanent loan soon.

As Suze Orman would say..."Show me the MONEY!!!" so here it is:

Annual income: $350,000 - $400,000 before taxes (he works 7 days a week as a contractor, his own business; she has no income and stays home with 3 kids 12 and under and is expecting their 4th child)

Expenses: contractor's insurance, health insurance, car payment (they bought a new SUV a year ago)

New home monthly costs: $20,000 - $25,000 monthly payment (~$3,500,000 loan amount), $3,000 - $4,000 monthly property taxes, utilities on a multi-level ~11,000 sq. ft. home (no solar system)

Savings: used to cover going over-budget on the construction of the home

History: They have been living in a 3,500 sq. ft. home that they purchased new for $639,000 10 years ago (that is how we met; I referred them as buyers) and after several refi/cash-out loans, they owed ~$1,000,000 (1st mortgage + HELOC) with a monthly payment of ~$5,000. So they are essentially going to be paying 4-5x more than what they were used to.

They tried to sell their current home a couple of years ago, but they owe more than it's worth and another agent listed it ~125% over market value. Since they couldn't sell their current home and planned on moving into their new home, they stopped making the mortgage payments (strategic default) on their current home a year ago. Now if anything happens to their new home, they won't have their old home to go back to.

Originally, they also planned on selling a couple of their investment properties (rentals in the Sacramento area) for a profit to pay down the $3,500,000 mortgage...but with the economic downturn, they stopped making the mortgage payments on those homes because they were worth less than their loan amounts. Now their $3,500,000 mortgage won't be paid down, unfortunately.

I'm no financial guru, but to me this obviously looks like the next luxury home foreclosure. With $300,000 - $350,000 per year going towards mortgage interest and property taxes, his income would barely cover that plus their living expenses. He's also in his mid-40's and as a contractor who works what I would consider hard labor, how many more years can he continue to do that for a living, working 7 days a week? How can they save up for retirement with that kind of housing/income ratio? We've mentioned this to them...it's just too bad that they are in denial.

To them, they are moving into their dream home...to me, they are walking into a nightmare.

Suze Orman would yell: "DENIED, DENIED, DENIED!!!" on keeping this home. I am sure of it.

Have any of you ever come across people like this, who simply don't want to face reality? If so, have they ever seen the light...and was it in time...or was it too late?

Page copy protected against web site content infringement by Copyscape

BOB & LEILANI SOUZA
Real Estate Investment Specialists
Southwest Placer County, CA

Souza Realty, Bob & Leilani Souza - Real Estate Investment Specialists in Southwest Placer County, CA

Bob Souza - 925.513.3400 - bob@souzarealty.com

Leilani Souza - 916.408.5500 - leilani@souzarealty.com

Souza Realty - Real Estate in Roseville, Rocklin, Lincoln, Loomis and Granite Bay, CA

HOMES : CONDOS : LOTS & LAND : REAL ESTATE INVESTMENTS
1031 EXCHANGES : PROPERTY MANAGEMENT : RENTALS

Roseville : Rocklin : Granite Bay : Loomis : Penryn
Newcastle : Lincoln : Auburn : Meadow Vista
 

Souza Realty on Facebook   Leilani Souza on LinkedIn   Souza Realty on Trulia   Souza Realty on Twitter   Souza Realty on YouTube   Souza Realty on Zillow

Copyright © 2002-2016 Souza Realty | All Rights Reserved | BRE #01262541

Can I Afford It? Suze Orman Would Yell: "DENIED, DENIED, DENIED!…
share
Can I Afford It? Suze Orman Would Yell: "DENIED, DENIED, DENIED!!! " I love watching the "Can I Afford It? " segment on the Suze Orman Show and I think I've found the ultimate "DENIED, DENIED, DENIED!!! " story… more
Downtown Halloween Carnival - Free Donuts at Donut Wheel - Livermore,…
share
Livermore Downtown Halloween Carnival - Free Donuts at Donut Wheel - Livermore, CA The Livermore Downtown Halloween Carnival took place on Wednesday, October 29, 2009 from 4:00pm to 8:00pm. In previous years, Livermore Downtown Inc. hosted an… more
Building A Home: A Step-By-Step Blog Series
share
Building A Home: A Step-By-Step Blog Series Thanks to a couple of ActiveRain contests sponsored by Celeste "Sally" Cheeseman and the ARG himself, Bob Stewart I have been inspired to not only come up with my goals on AR ( BEFORE… more
Funny Fridays - The Funniest Daddy Ever… But You Just Never See Him!
share
Funny Fridays - The Funniest Daddy Ever… But You Just Never See Him! more
Lyoto "The Dragon" Machida, Undefeated UFC Light…
share
Lyoto "The Dragon" Machida, Undefeated UFC Light Heavyweight Champion Lyoto Carvalho Machida is also known as Lyoto "The Dragon" Machida son of a Japanese Shotokan karate master Yoshizo Machida and Ana Claudia Carvalho… more
Wordless Wednesday - The Cutest Little One Month Old Baby Boy In…
share
Wordless Wednesday - The Cutest Little One Month Old Baby Boy In Leilani's World more
Motivational Monday - Planning Your Path In Order To Reach Your…
share
Motivational Monday - Planning Your Path In Order To Reach Your Destination Although I didn't do any rock climbing when I took this photo at the 2009 Half Moon Bay Art & Pumpkin Festival last weekend, I have done it in the past. It… more
Naymz… Yet Another Online Profile Site… When Does It End?
share
Naymz… Yet Another Online Profile Site… When Does It End? I was invited to join yet another online profile site called Naymz and I did. A part of me wants to swoop every possible site to get the username "leilanisouza " since I… more
Vineyards Are NOT Public Property!
share
Vineyards Are NOT Public Property! Vineyards are private property and people should especially be respectful of vineyards that have homes in the middle of them Vineyards are not owned by the government and they are not for… more
Do You Panoramio?
share
Do You Panoramio? If you don't.. and love to take local photographs.. and want to have yet another stream of web exposure.. then you should Panoramio is powered by Google and their tag line is "Show your favorite places "… more