This is the whole problem. If the banks stop approving loans that folks can barely afford, demand drops and so do prices. Look at the inverse relationship between loan rates and house prices.... The crazier the loan, the more real estate prices go up. Remember, no bank really loves you. They just want your money so they can resell the loan to some other schmuck... Unfortunately for all us taxpayers the schmuck is turning out to be Uncle Sam... When a Teacher or a Cop can't afford a home in the county where they work, then something is broken.
Oh here is the best part, Its all because someone at the Ecrow company wanted to take a three day weekend. Everything was done and ready last night, all they had to do was to drive up the paperwork to the county, get it signed off and turned in. But this particular person called in, took a personal day, and the "back up" runner just couldnt possibly make it to Riverside county in time, and of coarse the deadline is 10 am.
Okay but....currently....whats better for me? Renting or owning for the same money??? Thats where 43% puts me....owning for less than the rental market. I know you're going to say the rental market is a mess too...but it's an ugly cycle. Now all those people foreclosed on are renting...increasing rents for everyone. I wanna go ride my bike now....sigh. Happy Friday
Well, as they say in the auto industry... your mileage may vary. Personally I think the whole home ownership thing is a sham. The government encourages folks to buy homes because it fuels the durable goods market and thereby the entire economy. Does is really make any sense to reward someone for paying a high interest rate on a home loan? While at the same time penalizing someone who saves their cash instead of giving it to the bank??
There are pros and cons, locally renting for $1200-1500 can be more appealing than buying for $2500+Taxes, Insurance and HOA. I loathe residential because the only thing more emotional than a buyer is the Agent waiting on their check. A decision involving more than a quarter mil ought to be approached from a balance sheet perspective despite late night hucksters promising millions overnight for three easy payments of $39.95. A primary residence is not an asset, it will always be a liability until you are 62+ and it can send YOU a check every month. Until then the difference is you are on the hook when the pipes break, walls/carpet need replacing, or the landscape gets maintained. People like Steph and her spouse will be fine because they are thinking long term and are stable in their careers and looking for a place to grow a family. Ownership is a large responsibility and there are risks involved, though everyone has a different opinion I would not approach it lightly. A good example is a friend of mine who did not talk to me after I advised her not to buy in winter 2006. "The Market is peaking" I said "Wait", she had just graduated (less than six months) and was in a hurry since rates were fluctuating and she wanted to lock in. She wound up buying with her fiancee and neither of them can now even afford the wedding they had planned and are still unmarried. What has changed is the property is upside down >$150k, his work has tapered off (grading for new construction) and She was recently Laid off from the Irvine company due to the relative lack of seniority. They both still have Student loans and all of their collective savings was tied up in 401k's which have since diminished. Not even being able to afford a Loan Mod they are planning on mailing in the Keys and moving back in with their folks.
#-o#-o#-o#-o#-o You don't even need to say "I told you so" . . . . . . . . . . and they know it! But this seems to be common these days . . . sad :-s
Oh and FYI cashier's checks AREN'T like cash, banks DO put hold on them (Wamu was telling me 7 days before I complained to the manager then they knocked it down to 2 when I asked them if they could call the credit union), despite what the underwriter of the loan insists, so go with wiring (and suck up the ridiculous fee) unless you have plenty of time before the close of escrow. Also it probably helps if all your money was in one bank. :wave: Ain't escrow grand?
Yeah, I don't get it. I have seen some of those bank repo houses sitting for several months and them not budging on the prices and the prices seem too high for the condition of the houses! They must not be looking for a quick sell.
What is the story with this mentioned by sdyeti? STRS program that's 80/17/3 Also SheDevil, did I understand you correctly that you got a 3% down FHA loan for first time home buyers? Do you know if there in an income limit to qualify? My wife and I have practically no debt, make decent money, and both work in very stable jobs (muni gov and university). We save close to 40% of our income each month yet we still have only a small down payment saved (for the SoCal market at least). Nearly any other part of the county we could easily put down 20%. We really can't expect any assistance from our families and want to be able to do this on our own and ideally make the payments with my wife's salary alone (the smaller of the two incomes). We can make the monthly on most the homes we are looking at; it's the down payment that is killing us. If we could qualify for a 3% down that would be terrific. Great thread BTW. Thanks for the many great comments. I really like the guidelines presented by HooverMD. Good stuff.
time my friend... time... As long as the banks think that Uncle Sam will rescue them, these properties won't be sold for what they are worth! Wait them out. IMHO, we ain't seen the bottom yet...
Watched an interesting Documentary last night on Showtime: Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lender There is a review at: http://www.imdb.com/title/tt0762117 Worth a viewing IMHO...
Don't jump on the buying wagon yet! Just look at the news everything is getting worse....by the minute. 1 in 10 home owners are late or in foreclosure process according one report. Hard time is here to stay so be patient and it will pay off big time....don't be like my buddy thought he got a good deal and 1 month later someone selling the same house down the street for 100k less!!!#-o Banks' foreclosure inventory is piling up and they won't be able to keep them all and at some point they have to dump because most people still can't afford any house at current price. We ain't seen nothing yet, just my opinion of course!
So is this. Arctic blast knocks out power across Northeast The heating bills will out-pace the mortgage and the bills never stop growing. I found it better to buy in SoCal, sacrifice to get the best house possible and let inflation whittle away the burden of payments. And don't move around. Let Prop 13 cap your taxes.
i'd love to talk to a realtor who works in the h.b. area about buying a small house/condo during the first half of next year--or if anyone knows of a good realtor. thanks, doug
While the rent vs. own debate has been going on as long as man (and woman) has been living in a home vs. roaming the country. When owning really pays off is when you buy right and at the right time. Then as the cost of rent goes through the roof, so to speak, your monthly payment stays the same. Although I didn't make a conscious effort to buy my condo "at the right time" when I did, and at the time, it seemed somewhat bad, I thought (in 1996). But years later, it paid off, and my mortgage and HOA fees put my cost of living very low - significantly lower than what I could rent a place like that for. The real benefit? More/better/lighter/faster/blingier bikes!
Try your credit union They take a very long time to close, be it through a bank or broker. The difference is that the bank pays their people a salary and brokers must get something from you to eat. Most opt for the rebate which they sell as "no points/no cost" which means you will be paying for it every month for the next 30 years especially if they are a correspondent and do not disclose rebate. The best deal is paying a point or two (in the loan amount) to buy the rate down to the floor and prevent the sales rep from milking you too much. FHA is the only entity currently buying Mortgage backed securities aggressively since as you might have heard the market for them has diminished a bit. Since you guys can verify income and will not likely be laid off it could be worth looking into whether you qualify for a loan. I'll tell you straight up that unless you have six months reserves (piti), strong credit scores (720+), and no historical (last ten years) BK's, Foreclosures, or repos you've got a shot but are still subject to underwriting approval(which means if the payment is >45% of income forget it). Brokers are handy if you need to hink the numbers a little, or want hard money (10%+ interest). Otherwise ALL Loan originators are selling the same program with the same guidelines. Credit unions charge the smallest margins, usually because they will hold the paper to maturity and make the profit long term. Large banks Like Wells sometimes hold the paper but often force their sales people to work on commission due to the percieved power of selling the big name. Brokers are just middle men, most working out of the trunks of their cars or homes and simply sell banks products at a .5-1% premium. The 3% down sounds great and few Realtors (or salespeople) will be able to explain or understand it. What will happen are months of trepidation waiting patiently for approval while they string you along because they don't know themselves. Just sit down at a bank with an acutal banker who can explain the program, that way you can know if the program will fit and what you can afford to buy. Then if you can get in expect a 3-6 month closing window (it's the federal govt after all) which will not be rushed or hasty and occupancy requirements of at least five years. I'll try to find you some links. Good luck, and happy holuidays.
Rent versus own calculator: http://www.vlender.com/cgi-bin/calc/rent_vs_buy.cgi More here: http://www.google.com/search?q=rent...avclient-ff&ie=UTF-8&rlz=1B3GGGL_enUS230US231 Based on some round number and one calculator we stand to make $27K more a year by buying versus renting. I tried to be very conservative too. Mmmm....
