I live in las vegas and with the market's turn the house that i'm buying that was worth 350 last year is now

appraised for 300! the appraiser just came last week and that's what he appraised it for. it will go back up again, right? here in vegas so many houses are in foreclosure and people and i've seen some people selling their house 100,000 off the appraised price. the reason i ask is that i'm about to buy the house for 272,000. the private mortgage insurance is killing me. right now i need to have the principal down to 240000 in order for PMI not to be tacked on to my mortgage. If houses do go up in the next year or so, would i be able to get my house appraised once again (in hopes for it to be appraised for more) so that i don't need PMI anymore?

I would suggest you try and get a loan where it is lender paid mortgage insurance, the interest rate will be slightly higher, but the lender is paying the insurance so they will want to get it off sooner then later. Also, of course the house will rebound I bet if you look at the records for that house in the year 2000 it was probaly worth at least 35K less then your 272K, A home is the best asset to have just be prepared to now have a tax write off for years to come, and stay in the home for 3-7 years. and come back here and tell me how your home is now worth over 350K again. I would ask your lender you are using about lender paid PMI, you will see the difference in payment is less, ALSO, if you are purchasing a home owner occupied, I would talk to a tax person about the tax deduction for the higher rate with lender paid MI, VS, you paying the PMI and the tax benefit that way, this may help you make a more educated desision. OH sorry one more thing, since you have PMI, you may be able to do a 100% loan and keep your cash to help offset the higher payment. Hope this helps

Okay here's the deal:

PMI stands for private mortgage insurance. if your down payment is less than 20% of your home's purchase price, you will likely need to purchase private mortgage insurance (PMI)--also known as "mortgage default insurance". the smaller the down payment, the more likely a homebuyer is to default on a loan, (understand here that the more dough you or anyone puts down on a home, the greater the perception that you are committed to this home--generally speaking, it means you aren't as likely to just foreclose or walk away from the situation, as you'd lose all the money you put down.) anyway, private mortgage insurance companies can add hundreds of dollars per year to your insurance costs. AFTER the EQUITY in your property increases to 20%, you no longer need the insurance.

the only REAL way to build equity is TIME. and by time , i don't mean 5 minutes or a month or a year.

the housing forecast is dismal, don't let anyone fool you. certainly there are pocket regions in the country that are doing well , as demographic shifts occur ( meaning as people move from one area to another en masse or in large numbers...usually because of job availability).

we are currently experiencing the fall out of a real estate binge that just fairly recently took a downward turn. the reason for the fallout is plain and simple: greed. most houses are completely overvalued, as sellers were looking to make huge profits, buyers bought way more house than they could actually afford. appraisers and governments appraised houses at far more value than they are actually worth, as higher appraisals means higher tax dollars for them ( tax base), lending institutions offered lending programs they were outrageous, many buyers didn't understand what they were getting themselves into, or didn't care, speculators got into the game by buying houses and in some cases, simply putting a coat of paint on them and placing a fence outside, and then flipping for a huge profit, in many cases as little as 3-4 months after purchasing it. ( by the way, side info for you, typically speaking when the stock market takes a dive, investors freak out, and then dump their dough in real estate and speculate and cause mayhem in that market, until that market takes a dive, and then its back to the stocks they go).

flippity flop flippity flop. everyone wanted a fast buck. now the party's over. and the hangover is spilling out into the rest of economy. lending institutions are going bankrupt, and so on and so forth. the feds have to step in and tinker with the interest rates, so that there isn't a complete housing market crash. which would have enormous ramifications on our economy if it did. the proverbial bubble has burst.

will your house go up in value? yes eventully it will. can we say how soon? no, not really. it takes time to recover from such heavy partying! Remember, as i said earlier, the one true way to build equity is TIME . this requires patience, and the wherewithall to finance your purchase.
this is also true of investing in the "markets" e.g. stocks, mutual funds etc. as far as having your house appraised again, sure you can, i don't see why not. but that doesn't necessarily mean the value WILL go up.

you won't hear too many babyboomers saying the following as is evidenced by their investing and purchasing habits, and their overall impulsive and immediate gratification psyches... but
your grandmother most likely said it

"patience is a virtue".

About 1995 we had this same mess, houses were in foreclosure, people were losing or just walking away from their houses because they couldn't hang on...it was really terrible. A lot of that was attributed to the enormous amount of base closures which uprooted families and messed up a lot of retirements(along with interest rates)
This time around its a lot of nasty mortgage companies that are raising their rates and are not being patient with the people they loaned the money to.. many are going to bankruptcy court just to even out!! This isn't a chapter 7 but the 13 which means the person wants to pay but just can't pay everyone all at once.
When we bought our house in 2000 it was just the end of the 1995 mess(our house was worth 40K more in 3 months!).. so give this one about 5-7 years and things will up turn again. Tis the way of the realty market, I got that from my realtor.He has been in the business 40 years and he says the trends you can practically set your watch to, it happens, people panic & some people take advantage of it.. just be patient it will be okay.

The real estate market always has its cycles. You are buying a house for $272k, that appraised at $300k (already $28k in equity) but was worth $350k last year. You are already getting a good deal.... but you want to know if it's the best deal?

Real estate is always a good investment if you are looking at the big picture. How much was this house worth 10 years ago? Or even 8 years ago? How about 5? Even if this house is a brand new house- what about the market in general? There is not a homeowner today that is losing money that bought their home 10, 8, or 5 years ago... unless they pulled out all of their equity (when the market was up- a bad decision for them).

That's what you have to remember - you are buying a home for you to live in. Enjoy it for the years that you are living there and just wait for the market to go back up and see how much more equity you get. Your equity will always go up - it just depends on the market how long it takes. Think long-term gains and not short-term.

If your equity has increased enough after one year to be at the 80%LTV amount, you could always refinance to get rid of that PMI.

Good luck and congratulations on making a good decision.

CA, NV, and FL are the worst states in terms of foreclosure, and sinking home values, and are predicted to go down more in the next year or to, when even more foreclosures hit the market, and credit actually tightens up more. at only approximately 10% equity that will be eaten up withing the next 12 months, because the appraisal or worth of homes in the area is predicted to drop by at least that amount. In other words it is not going to raise that much, might be only worth 240,000 in the next two years. THat is the crises in America right now.

In CA at least You can get an 80/20 loan without PMI. Your first mortgage is for 80% of the purchase price and the second mortgage is for 20%. The second mortgage has a higher interest rate, but you can pay it off. Countrywide Home Loans offers those loans here. You can check with them to see if they offer those loans in Nevada, too.
Sorry, my crystal ball is in the shop, so I can't tell you when (or if) the real estate market in Las Vegas will pick up, but if you are looking for a long term investment and you pay off your mortgage (or pay it down) you will have equity in your house.

Dont count on Vegas rebounding quickly . It is more of a 2-3 year priod before all of the problems are clear ed and then it will be a gradual climb. Try to do your best to avoid PMI but dont exepct a big climb in the house value any time soon to do it for you.

I would not count on a rapid rebound in housing prices unless interest rates continue to fall.

PMI is BAD. Stay away from it at all costs.

everything loses value one it sales or the new year rolls around.

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