Anyone need a house?

[nateb]

OK John, and the rest of you guys. I assumed real estate was out of control because of New Yorkers and Californians dumping realestate and moving here. Just where the hell is all this money coming from? a 100K salary (pretty big IMO) can barely pull down a 250k house at the lowest interest rates (and longest terms) ever.

This is where the real WWIII has to take place.

It's very rare that I stick my neck out like this. But, I am going to call bullshit. I am pulling down about that much and I have a mortgage of 270K on a 350K home. I will admit that I have a good fixed interest rate (Right around 6%). It can cut a little close sometimes. But, between the rightoffs and everything else, I am making by just fine. The important thing is to have is your 20% down and good credit.

You think about it. If you lay your 20% down on a 250K home, you end up with ~ 200K loan. You end up not having to pay PMI(because you had your 20%) which is a mutherfucker. You end up with a mortgage right around 1,700.00 a month. At the end of the year, you end up getting alot of money back depending on how you have your deductions setup with payroll. I will admit that you do have it a little bit harder. But, it is better then throwing your money away every month.

-Nate

[King Kabong]

The important thing is to have is your 20% down and good credit.

That's the kicker, getting that first 20% downpayment can be tough. Maybe he hasn't gotten to that point yet or whatever. We had to let some credit cards ride, meaning we didn't make payments on them, etc to get our first down payment together. It wasn't easy, but you'll make it all up with the appreciation and sale of that house, then it'll all start to roll.

[pagemalicious]

I'll give them a paper clip for it

[nateb]

That's the kicker, getting that first 20% downpayment can be tough. Maybe he hasn't gotten to that point yet or whatever. We had to let some credit cards ride, meaning we didn't make payments on them, etc to get our first down payment together. It wasn't easy, but you'll make it all up with the appreciation and sale of that house, then it'll all start to roll.

You are 100% correct. Looking back, the hardest part was getting my shit straight before I did it. It took me a good 2.5 years to get my credit squared away and the 20% together. I just readjusted my priorities and everything happened in time. I will admit that I didnt sleep well for months right before and right after I made the purchase. But, you learn how to regulate yourself and your spending to meet the goal.

-Nate

[nateb]

Oh by the way... Interest free loans and adjustable rates are not the thing to be doing right now. Play it safe and go for fixed.

-Nate

[rjohnstone]

You are 100% correct. Looking back, the hardest part was getting my shit straight before I did it. It took me a good 2.5 years to get my credit squared away and the 20% together. I just readjusted my priorities and everything happened in time. I will admit that I didnt sleep well for months right before and right after I made the purchase. But, you learn how to regulate yourself and your spending to meet the goal.

-Nate

That's what FHA loans are for... if it's your first house, you don't need 20% down.
I bought my house 8 years ago for $110k, which I still live in, and it's worth $380k now.
Total move in cost with an FHA loan... $5,800.00
I did have to get my credit cleaned up before hand, but luckily it wasn't too bad.
Once I had achieved 20% equity (via market value increase of course), I refinanced to a lower fix interest rate conventional loan. From 7.25% APR down to 5.08% fixed.
That also allowed me to drop the PMI from my monthly payment.

[DonP]

Oh by the way... Interest free loans and adjustable rates are not the thing to be doing right now. Play it safe and go for fixed.

-Nate

Nate,

I'll take an interest free loan anyday LOL! (you meant interest only loans, right?).

When I started with this house 10 year ago, it was first a 5% down with an ARM and stupid PMI, then a 80-10-10 split to get rid of the PMI, the an 80% 30 year fixed once the equity caught up.

One of the reasons I hate to sell is that I have a great interest rate, but I'm not willing to take a chance on renters in this place. I'll take the profits and buy some smaller rentals, with a better ROI.

[442w30]

You are 100% correct. Looking back, the hardest part was getting my shit straight before I did it. It took me a good 2.5 years to get my credit squared away and the 20% together

Wow, you saved 50k in 2.5 years? umm I guess I need to get on that savings plan. 1700/month saved. Congrats!

I am not saying it can't / shouldn't be done, but it's hard to believe everyone should be able to do that to get an "entry level" home. - and not everyone has 0 debt, great credit and no kids/two incomes.

either way, I don't think housing is a bargain. Most of the people I have seen with outrageous lifestyles have

a) Two really good incomes/no kids
b) flip realestate out of a high priced market
c) inherited cash and never experienced debt.

I don't think >50% of society falls in those categories, so I am guessing the remainder of the folks are leasing cars and interest only mortgages or just plain busting their butts and making good life decisions.

[nateb]

Wow, you saved 50k in 2.5 years? umm I guess I need to get on that savings plan. 1700/month saved. Congrats!

Actually, I got lucky with stock sales. I had a bunch from my company from ESPP that I just kept feeding money into. I saved 20K on my own and had a little help to offset the tax hit that I was going to take from the sale of the stocks. It hurt for a little while. Plus, I was living in a apartment that was only charging 950.00 a month.

-Nate

[442w30]

That's how ya do it!

But do you guys think that there are that many people out there that can do that? I just think there's a day of reckoning coming for real estate - of course I thought it was in 2001

[nateb]

Everyone predicts the ass falling out of the housing market. It does have slumps followed up by a spike. Really depends on the area. I know all those people around silicon valley (Long distance commute) are experiencing a dropout in the market. But, the people that are central to the valley are holding kinda steady.

Who knows, with the economy going the way it is, I have no idea where it could lead. That is why I was saying earlier. With such a economy that we are living in (Rising interest rates, economic instability.) Getting into adjustible rate loans could be a bad thing. Hell, all of the sudden, we could be back where we were in the Regan era with a 18-22% mortgage rate where 2 years ago it was @ 5-6%. Fuck that noise, all of the sudden, you are not able to pay your monthly. I am not sure how it works with interest free loans. But, when I read stuff like this....

"RealtyTrac™ (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its 2006 Q1 U.S. Foreclosure Market Report, which showed that 323,102 properties nationwide entered some stage of foreclosure in the first quarter of 2006, a 38 percent increase from the previous quarter and a 72 percent year-over-year increase from the first quarter of 2005. The nation’s quarterly foreclosure rate of one new foreclosure for every 358 U.S. households was higher than in any quarter of last year."

or

Another one...

http://www.rismedia.com/index.php/ar...view/15034/1/1

I always make the safe bet and this shit just seems a little bit of a scary gamble to me.

-Nate

My god... I am starting to sound like my dad....:ROTF: