PMI is the other one. I used to work for a mortgage company and learning all the back ends just makes me sick to my stomach.
We bought ours in 1993 and are staying in it for now. Refinanced a few years ago when the rates were low. I wouldn't want to buy now!
Thankfully, I bit the bullet and bought a house back in 1995. Sold it in 2005 and rolled into the house I'm going to keep for a long-time. Hopefully in the next few years I'll get a 2nd place in Colorado, Utah or AZ (yes near a MTB Mecca) and hold onto it until the kids are through college. Then I'm gonna cash out of the SoCal market and move out to my semi-retirement place.
The market has taken the turn it has by 100% (80/20) financing people who shouldn't have been given a loan in the 1st place or people who wouldn't be able to afford the ARM change. It's very difficult if not impossible to get a new home loan without a 10% down even with good credit because of this mistake. Banks are lending $, but only to people who fit the profile now. No more stated (Proving $ coming in & out of your bank) they want proof of income (w2's). It's very sad that banks loaned so much $ out and now people are loosing their homes. It's now those very banks that won't loan people $ (who can afford it) for more afforable houses.
in my opinion it's not time to buy (or refi) just yet. There's still a lot of negative effects of the housing market yet to filter through the economy. AND if you listen to the fed, you'll know that they expect to CONTINUE to cut rates. at least that's what my magic 8 ball tells me.
I just got a quote for 100% financing at 5.72% on a 30-year fixed loan. Only caveat is that the loan has to be for less than $417,000 which is the FHA limit and the cutoff for jumbo loans. The only way to get a single family house in Orange County for that kind of money is a foreclosure or a tear-down property. 5% down is possible for any loans over $417k to someone with over 700 credit.
I'd love to get a # of your lender? We (my accounting firm) are always getting calls from our clients for lenders that *can do for them* PM me please?Thanks
FHA loans are once again becoming popular. Most of our audit clients are trying to re-apply for their FHA license now because they seem to think it's the way to go (read very profitable for the lender).
Can... not... remain... silent. No sorrow from here, only harsh reality. The reality is that the banks were greedy by gambling that appreciation would provide the collateral for borrowers who could not afford the loans. The reality is that there were borrowers who were gambling their credit reputations by taking loans for which they had no hope of paying. They were all gambling on appreciation so they could either flip the property or take seconds and bury themselves even further into debt. Rarely does anyone "get rich quick." Rarely is there "a free lunch." The "traditional" economic strategies are "traditional" because they've been around forever. They've been around forever because they're based on sound principles and they will work in good times and in bad. A lot of people made money using the above strategy, but as in every game of chance, someone also loses. I hope the dust clears soon.
Signed the acceptance letter from the counter offer last night which means basically I just bought a home Waiting for the contract to come over and escrow should open today
Disclosure: I too am a RE Agent and have been working in the Private sector of the RE Market loans/investments for the past several years IMO whats happening in the market with the fed cutting rates is too little too late to solve any of the problems that have already happened over the past few years. Very few people that actually need the help and are facing foreclosure are going to be able to benefit from the rate drops and will still loose their homes so the downward spiral in home prices and REO's is no where near the end. I do see where these rate cuts are trying to spike the economy upward and get people into a refi frenzy and IMO its a good idea for people to take advantage if they qualify (their in lies the problem). Good borrowers will definitely benefit and save money with the new rates out there ( i think the feds will cut again-maybe another .25) and buying a home in this market is a pretty good idea if you were planning on purchasing anyway. Home prices with all of the Bank owned homes are as low as we will see in CA for a long time and i dont see waiting another year to buy your dream home doing you much good-if you were looking to buy then the next 6 months is the perfect time. As for the FHA loans that people are so actively pursuing because of them being easier to obtain-the goverment has been in talks to increase the maximum loan amount from the $417,000 its currently maxed at to $700,000 (which IMO is more realistic for the CA Real Estate Market-what can you buy in OC for 417k #-o) and if this change does go through this will definitely help out the RE Market tremendously...easier loans for people to qualify for and this can help more of those people that need to refi. I also just heard today about a lender that is offering 100% financing for loans in CA where the minimum FICO requirement is in the mid 500's and all of the costs are included in the loan but the max loan again is the only hic-cup, $500,000...if this really exists this would be a pretty good program for a lot of people to be able to take advantage of foreclosure sales but only in lower value areas like Riverside, San Bernardino etc. I dont think we are anywhere near the end of all of this but i think the worst has passed or shown itself and things will at least level off if not start the slow climb back to normal in from here on out...as for me, i will definitely be refinancing my current home loan in the months to come and will prepare myself for the steady wave of refi's and home purchases that are on their way :beer: P.S. Good luck to all those that mentioned they were currently in the process of buying homes :clap: P.S.S. As for Willie-8.5%...thats crazy! You should definitely call your bank and try and negotiate with them to lower your rate by telling them that you can no longer afford that payment and if they are smart they will work with you because i dont see them wanting to add to the list of foreclosures they currently have (im sure they have a ton). As of lat we have been trying these sorts of things with borrowes in our private loans and though not all banks have been willing to co-operate we have found that some have been in order to not get another foreclosure. I would also talk to whoever you bank with (if its a different co than who you have your loan through) and they might be able to help you secure a loan based on your history with them-if you have access to a Credit Union of any kind that would be an even better avenue since they are non proofit and would be able to offer you the cheapest loan possible if you can qualify. Good luck and if you have any questions please feel free to PM me
Wow you should see the detail on the "economic stimulus" package that was rolled out today. Not only will most of us be getting a $600 check but the fed increased the limit on loans Fanny and Freddy will insure/back/purchase (not sure what the exact term should be). The new rate is $725K for high price markets like CA. This coupled with lower interest rates should help some of us get homes. My fear is that the market may not correct as much as it would have or should have, and that some that should not get loans in the first place will now be able to get them again. Thus putting us right back in the same place we were before. I just hope the banks will proceed with caution when lending money.
Congratulations! No matter what the market does in the short term, it will surpass where it is today, and you'll be far ahead of where you would be if you hadn't acted.
I'm buying a home...and just locked my rate at 4.875% today!!!!!!! Thats insane low for a purchase! I asked my girl her opinion on refi's....she said "borrowers need at least 10% equity to refi their home" It might be something to consider PS Sorry about bringing up the old post...just hate to repeat a topic.
