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Leperflesh posted:although I'd have been more comfortable waiting, we're basically going to get $8k back within a few months, which I'll give back to them Seconding - how much is rent?
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Aug 20, 2009 03:44
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sheri posted:How much is your rent? It was buried in a bad place in my first wall-o-text post, so I don't blame you for not seeing it. $1650. I updated my debts/assets spreadsheet an hour ago. My own 401k is now worth 40k (17% increase in value since Jan 1st, although that includes my contributions). I'm contributing 6% of my gross salary every month, which my employer matches at a 50% rate - the maximum they'll match. After 401k contributions, tax withholding, medical insurance withholding, etc. my take-home pay is just about exactly $3700 a month. Here's a summarized version of my current monthly budget: pre:Monthly Bills DirecTV $59.99 AT&T $24.18 Sprint $105.00 PG&E $115.66 Rent $1,650.00 Auto Insurance $108.33 Water $20.69 Garbage $13.44 Internet $63.52 Total monthly bills $2,037.31 Debt Service - planned payments Student loan $56.47 Credit cards $460.00 Total payments $515.47 Total monthly budget $2,552.78 Average Net Income $3,701.47 Margin $1,148.69 gas 100 lunches 128 groceries 400 extra $520.69 "Average Net Income" is an averaged value of the prior 24 semi-monthly paychecks, so in years where I get a raise, it's actually a trailing average. I occasionally get some overtime so that accounts for fluctuations in the total, but my overtime tends to be about the same year-to-year. My auto insurance actually has a larger up-front payment of about $200, and then 10 lower payments, and then one month with no payments. Amica is weird I guess? The "extra" line is what is left of my budget after all the expenses I listed, which is all of my expenses. It used to be almost $400 less until last month when I paid off my card. There's more room in the budget of course. I don't really need to buy lunch every day at work. I could live without sattelite TV. My wife and I could dump the data plan on our phones and save $40 or $50 a month. I am making substantially more than the minimum payments on my credit cards. And as a last resort, I could reduce my 401(k) contributions to get more cash, although I am loathe to do that because the employer matching would also be reduced, and that's throwing away an instant 50% gain on my pre-tax contributions. My car is also worth around $9k. If I had to I could sell it - in this economy, I'd assume I'd only get maybe $7500 - and buy a $2000 econobox to thrash if I desperately needed a few grand. I'd hate to do that though, as it's just hit that sweet spot where most of its serious depreciation has passed and it's going to much more gently slide downwards in value from here on out. Knowing all of the above; even given our low amount of free cash, does it still seem like we're idiots for wanting a $1600/month housing cost that is buying a house, rather than paying rent? Edit: We already own a very good, high efficiency front-load washing machine and a gas dryer. We rent a small house, about 700 square feet, so we have furniture, furnishings, etc. We also have a rollaway/portable dishwasher that plugs into a sink faucet. We do not have a stove or fridge, those belong to the landlord, but those are the only kitchen appliances I think we'd be forced to buy immediately if the house didn't come with them. And, my parents have not asked to be paid back, it's just something I want to do. If it takes a year or two to get the money together that'd be perfectly fine. Leperflesh fucked around with this message at 03:53 on Aug 20, 2009 |
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Aug 20, 2009 03:48
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Leperflesh posted:Some notes. I carry a balance on two cards at 6% and 5% (about half each). I scanned a few times, so I'm sorry if I missed this, but how large of a balance are we talking about here? Edit: Nevermind... Found it 
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Aug 20, 2009 04:15
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quote:Knowing all of the above; even given our low amount of free cash, does it still seem like we're idiots for wanting a $1600/month housing cost that is buying a house, rather than paying rent? The fact is you want to buy a $250k house with only $5k in savings. Even if your parents are going to cover your closing costs and you throw every cent you have into the house you'll still have virtually no equity - and that's assuming the housing market has truly bottomed in your area and your house won't depreciate further. In other words, with little to no equity you'll basically be "renting" the house from the bank for the foreseeable future. This, of course, excludes the fact that with no savings you'll be completely unprepared in case of job loss/auto repairs/medical expenses/housing repairs/any other emergency. The mentality of "rent = thrown away money" is what got us into this housing bubble in the first place. In owning a home you will be "throwing away" money on interest, taxes, maintenance and insurance every year. Look at a 30 year amortization table - it takes several years until a significant portion of your monthly payment is going towards principal. In fact, considering how little equity you'll have in your home you might as well be renting it from the bank.
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Aug 20, 2009 04:37
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GamingHyena posted:The fact is you want to buy a $250k house with only $5k in savings. Even if your parents are going to cover your closing costs and you throw every cent you have into the house you'll still have virtually no equity - and that's assuming the housing market has truly bottomed in your area and your house won't depreciate further. In other words, with little to no equity you'll basically be "renting" the house from the bank for the foreseeable future. This, of course, excludes the fact that with no savings you'll be completely unprepared in case of job loss/auto repairs/medical expenses/housing repairs/any other emergency. I do not want to come off as argumentative here, but I am not in quite as bad a situation as this assumes. First, I have excellent health coverage with no maximums through my employment. I have four weeks of vacation saved up as well, so if I were laid off tomorrow, I'd have almost a month's "severance" off the bat. I do most of my own auto repairs. (Although something really catastrophic could indeed cost a substantial amount... but while I'd want to avoid it, I do have roughly $80,000 in credit available on my credit cards. If it came down to "pay $2k now in car repairs or lose your job (it would not, I could function on public transportation in the Bay Area without a car indefinitely) I could do that. I have broken the habit of putting every purchase/expense onto credit cards, and I will not take it back up, but they are there to help with emergencies.) I have accidental death and dismemberment insurance, and carry a life insurance policy worth six times my annual salary. My job does not require physical fitness, so just about the only things that would render me unable to work would be severe enough for me to claim permanent disability. And much of my family lives here. We've often fallen back on each other - in fact, of my family, I've fallen back on that safety net by far the least. If I found myself in dire straits, I would not be facing a situation where I could wind up bankrupt or destitute. But you are correct that if we bought a house this month, we'd wind up with maybe one or two thousand dollars left in our combined checking accounts and a couple of other minor liquid assets I have not mentioned. I've certainly got a couple grand worth of random poo poo lying around I could sell, I suppose... that's probably not a bad idea at this point anyway, since we're facing a move. quote:The mentality of "rent = thrown away money" is what got us into this housing bubble in the first place. In owning a home you will be "throwing away" money on interest, taxes, maintenance and insurance every year. Look at a 30 year amortization table - it takes several years until a significant portion of your monthly payment is going towards principal. In fact, considering how little equity you'll have in your home you might as well be renting it from the bank. Except that I could not possibly rent a house - any house - for $1650 in the bay area. If I for some reason had to sell in 5 years and had zero equity in the house at that time, I would look at my total outlays - all the closing costs, payments, etc. - and I'd be in no worse situation than I am right this moment. I'd have lived in a larger, better situation enjoying a better quality of life, and paid a few thousand dollars more for that. I am not looking at this house as an investment. If I can gain equity that'd be fantastic, and I do think I've got a reasonable chance of doing that after 5 or 7 years (and an economic recovery that I believe should be well underway by then - many reasonable people disagree with that though). But for my wife and I, this is more about "renting sucks rear end, I want to be my 'own boss' of my own property" than "rent is a waste of money". Two years ago my landlord raised the rent 10%, and I really had no choice but to pay it - rental occupancies were sky high, finding a new place would take months and be very disruptive, with no guarantee we'd even save any money on it. With a fixed-rate loan, I'll have predictability about my housing costs, with the only variable factor really being maintenance/improvement costs - and some of those can add equity when you do them, bonus!
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Aug 20, 2009 08:50
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Cmdr. Shepard posted:gently caress investors. Nothing would make me happier than to put in a lowball offer on an investor-owned home and having them sell it to me because they have no other option. That would be a great "gently caress you" in my opinion. Leperflesh posted:But for my wife and I, this is more about "renting sucks rear end, I want to be my 'own boss' of my own property" than "rent is a waste of money". As much as your employer can support you, those are things that are comforting when things are generally stable, and I've seen my own benefits (what smidgin I have) disappear in a flash due to deteriorating conditions. Employers have the right to remove these benefits you are expecting just as much as you have the right to choose to rent or own. I've gotta say as someone trying desperately to get rid of a home (that's apparently still wanted!) it's ridiculously crazy how little you'd walk away with if you had to sell even within 7 years (regardless of mortgage). Perhaps ownership is worth all that to some people, but I don't really think so anymore unless I had a lot of money to blow and a lot of time to sink into my home.
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Aug 20, 2009 16:18
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necrobobsledder posted:And given what I know about the SF Bay market, I'd prefer to move nearly every year instead of pay ridiculous rent increases, especially at your sort of price range (what you going to get for $250k, a 1 bedroom condo? A house far away from the city where you'd have to commute for an hour?). Single family houses in Oakland, Hayward, San Leandro, San Jose, East Palo Alto, and a scattering more. At this moment, for under $250k I get 81 listings for Hayward, 289 listings for Oakland, 10 in San Leandro, 161 in San Jose, 34 in East Palo Alto, and so on. This is realtor.com, single family houses only (no condos, no townhouses). Granted that probably 80%+ of those listings are unsuitable due to either condition, location, or both; that still leaves literally a hundred or more houses that are reasonable picks. We're not considering San Jose. Commuting to my job from Hayward would be about 20 minutes; about 35 or so from Oakland, depending on where exactly; maybe 15 from East Palo Alto, and so forth. And I can telecommute three days a week. I am hearing you. I appreciate your perspective. Just wanted to get the facts straight. necrobobsledder posted:I've gotta say as someone trying desperately to get rid of a home (that's apparently still wanted!) it's ridiculously crazy how little you'd walk away with if you had to sell even within 7 years (regardless of mortgage). Perhaps ownership is worth all that to some people, but I don't really think so anymore unless I had a lot of money to blow and a lot of time to sink into my home. Could you elaborate? This thread seems to be full of some pretty good advice. I realize it's not the "house selling megathread" but everyone who buys a house should know what will go into selling it, since the possibility of needing to at some point is probably there for most people. Leperflesh fucked around with this message at 19:17 on Aug 20, 2009 |
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Aug 20, 2009 19:14
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Is it possible to negotiate a short sale on a house with a mortgage from 1999? The FMV of the house is around 300-330K, but the existing mortgage was from 1999 at 190K. Based on the amortization, i calculated the remaining mortgage around 170K. It also sounds like the 2 owners got divorced and one moved out so this is why the short sale is happening. Would i be able to negotiate with the bank to just pay the remaining mortgage off?
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Aug 20, 2009 23:30
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How is that a short sale, if the house is worth more than the outstanding mortgage? Isn't that just a straight-up normal sale? And if the fair market value of the house is over $300k, why are they selling it to you for less? I feel stupid for asking but I've got to be missing something here.
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Aug 21, 2009 03:07
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Leperflesh posted:How is that a short sale, if the house is worth more than the outstanding mortgage? Isn't that just a straight-up normal sale? And if the fair market value of the house is over $300k, why are they selling it to you for less? It's listed as a short sale... presumably, the 2 owners got a divorce so i guess they both don't want to keep paying for it and they're forced to sell.
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Aug 21, 2009 05:33
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My understanding is that a "short sale" is when a seller is selling a house for less than what they owe on it. The bank approves a negotiated price and forgives the unpaid remainder of the mortgage, because it is preferable to going into forclosure. I don't understand how a short sale is possible if the couple is selling the house for more than they owe on it. Hopefully someone will explain.
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Aug 21, 2009 06:25
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moana posted:Yeah, that takes a lot longer than you'd think. We closed end of May and haven't gotten our rebate - we called the IRS and they said there's a huge backlog. Ug, I filed for mine after closing June 30 and have heard a whole lot of nothing. I'm glad it's just a perk, not a necessity.
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Aug 21, 2009 17:30
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Leperflesh posted:Anyway, what do you guys think. Am I an idiot for buying at all? Am I looking to spend too much? Or do you agree with every pro I've spoken to that I could "easily" afford $300k? And I'm particularly interested in opinions about the SF Bay Area market and it's unique peculiarities. You'd have to be insane to buy a house in CA right now. They still have the most alt-a and ARMs loans in the country that have yet to reset meaning more foreclosures and more bottoming out of the housing. Are you willing to buy a house now for $300K when it very likely will be worth $200K in the near future? Some CA zip codes are down more than 50% since the bubble peak and are still falling. If you can wait this thing out another year or two you can either get a lot more house for your 300 or get the same house a lot cheaper.
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Aug 22, 2009 05:41
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How long does the "oh poo poo, I just bought a house feeling last"? I just reached a deal on a condo and it's definitely a crazy feeling.
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Aug 22, 2009 12:27
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Realjones posted:Some CA zip codes are down more than 50% since the bubble peak and are still falling. If you can wait this thing out another year or two you can either get a lot more house for your 300 or get the same house a lot cheaper. That said $250k is a pretty aggressive target price anyway and even now I'd be suspicious of anywhere that cheap even now. Also don't listen to "pros" about how much you can afford, do the math yourself. qirex fucked around with this message at 16:09 on Aug 22, 2009 |
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Aug 22, 2009 16:03
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qirex posted:Those CA ZIP codes aren't anywhere decent in the Bay Area and most of the price drops around here have been $5 million houses dropping to an easily affordable 3. $250k for any house worth living in most places in the area is not a bad deal. So many people want to live here that there's basically a price floor anywhere within half a mile of a BART station [that isn't West Oakland]. Berkeley isn't Stockton. Yes, things could go down but not another 30% or something. This is pretty much my own reasoning. A friend of mine's parents had a house for sale in Morgan Hill; they listed it originally over two years ago at $800k, couldn't sell it, dropped the price, took it off the market, and then finally sold it last year at less than $650. Today it's probably sellable at $500k or so. On the other hand, we are in fact looking at houses within a mile of BART. There are some acceptable neighborhoods in Oakland, San Leandro, and Hayward - people tend to lump all of the East Bay into a single "ghetto" attitude, but the truth is, there are all manner of small, nice little enclaves scattered throughout. We saw a couple houses near Mills college that were in an OK neighborhod, and we've seen some hoods in Hayward that are frankly better than plenty of the peninsula areas we've lived in in the past. That said, I'm not 100% convinced that even the $250k houses are bottomed out... but they cannot slide much further downward, either. Plenty of these houses are attracting 10, 20, even 30 bids. We interviewed a realtor today. A house she showed last week was listed at $170 (by the bank, it's an REO) and the highest bid was... $300k. In fact she had to recommend to the bank not to accept that offer because there is no way the house will appraise for $300k, so the bidder's financing is going to fall through on it. Nonetheless, this was a Millsmont (Oakland) house attracting interest simply because it was listed so low to begin with. We'll start seeing homes in earnest next weekend. But if we do not see something that meets our criteria (safe hood, decent condition, $250k or down, no major issues, various other things) then we are quite happy to wait. The floor of the market may yet tip down another 5 or 10 % before it hits true bottom. If anyone is shopping for $500k houses in the bay area right now, though, they're clearly ahead of the bottom. Do a search on Realtor.com for $500k houses in bay area communities... there's a huge glut, and those places are not getting bid up by investors. San francisco has 132 single-family homes at $500k and down... and 294 condos/townhomes at that price. Look at 500k to 800k in the City... 281 more single family homes, and 505 condos/townhomes. That's ridiculous. Those prices are going to fall, they have to. You'd have to be a blind fool to buy a $800,000 condominium in this market. And there's 134 more condos between 800k and $1,000,000. And another 168 at $1,000,001 and up. I sort of feel bad for people who bought those things (and couldn't afford them). Sort of, maybe. A little.
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Aug 23, 2009 07:50
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Fade to White posted:How long does the "oh poo poo, I just bought a house feeling last"? I just reached a deal on a condo and it's definitely a crazy feeling. 3 weeks, 2 days, 5 hours, 27 minutes, 16 seconds. Approximately.
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Aug 23, 2009 17:48
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Yeah, I've been moved into my first house for about three weeks now and it's still not really sunk in--feels like I'm at a vacation house that happens to have all my stuff in it. There are some ugly cheap curtains that go to the floor that came with the place, and I was worried that they would cause problems with the electronics directly beneath them... so I lived with them knotted up into a ball for a while before I realized, "These are my lovely curtains, I can just cut them off." So I took a pair of scissors to them. I guess I've only got two days and five hours or so to go until that becomes second nature! And one more Rust-Belter glad about home prices in his area after reading through this thread... If I had gone with a 30-year instead of a 15-year, my monthly payments would've been over $100 less than my rent was for a place that's almost twice the size. Hooray for living in a place no one would ever want to move to! ... 
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Aug 23, 2009 18:49
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Leperflesh posted:Single family houses in Oakland, Hayward, San Leandro, San Jose, East Palo Alto, and a scattering more. At this moment, for under $250k I get 81 listings for Hayward, 289 listings for Oakland, 10 in San Leandro, 161 in San Jose, 34 in East Palo Alto, and so on. This is realtor.com, single family houses only (no condos, no townhouses). Leperflesh posted:Could you elaborate? This thread seems to be full of some pretty good advice. I realize it's not the "house selling megathread" but everyone who buys a house should know what will go into selling it, since the possibility of needing to at some point is probably there for most people. - realtor costs (used to be 6%, which is split among both the selling and buying agent) - excise tax (paid to govt) - any improvements that a potential seller will ask of you as a contingency (could be something small or something radically huge like a new roof or something) - potential lowering of value due to your negligence as a homeowner in maintenance issues (intentional or not, it's still negligence) - lowered property values due to macroeconomic or local market conditions (see: everyone that bought in Michigan in the 80s that didn't sell in the mid-90s thinking it'd recover now struggling to get what they paid for in the 70s) This comes all right out of that "equity" that real estate agents loved to espouse during the past boom (which was actually not as huge of a topic until the relaxation of loan requirements in the early 2000s - typically real estate agents only talked about cutesy crap rather than the business end with potential clients). If you buy a house on a 30-year fixed rate, you get jack poo poo for equity over the first 5 years - almost all of it is interest. For example, I had a $285k loan in 2007 that I have now gotten down to $5k. In the meantime, I've paid about... $75k in interest, taxes, and HOA fees. I have gotten tax deductions for a lot of it, but (depending upon your tax bracket) that's probably only about a 25% "discount" with the "discount" at maybe 35% if you're one of the top 1% richest in the country. If you're cool with possibly moving and losing potentially half or more of your 20% down in 8 or so years, that's the price of ownership you have accepted. I accepted that risk myself and have been burned because I have to move for completely unexpected circumstances that I'm trying to fight with the IRS about. Personally, I now think that mortgages are loving terrible and it's probably in one's best (purely financial) interest regardless of the kind of economy to just buy a home with cash or at least 40% or more down (if you're not that sure about a home, you shouldn't buy it). I feel that the kind of security that comes with actually owning your home is worth the wait for my family versus the basic, minimal security of pseudo-ownership that comes with a mortgage. In a lot of metropolitan areas, I think finding a drat good place to rent is better off than paying exorbitant prices merely to say "I own this place." The American Dream (tm) is not a home mortgage, it's owning your home, and I think it's a pipe-dream that's been marketed by bankers, politicians, media, and real estate agents blindly for decades without really being critical about what it means. With that said, there are risks of renting, too! If the place you're living has a big boom of some sort and it's sustainable, you're going to have rent increases everywhere - permanently. Also, in some areas it is really hard to find anything but disgusting old houses with terrible maintenance available for rent (Seattle area) due to sheer lack of supply, so the incentive to buy becomes partially about health and safety, but it still means increased cost over renting. Above all, remember that a house is like a car that you live in - it deteriorates, it requires maintenance, and resale value is important. A lot of people have this entitlement complex where they think they should be living in a house they own just because they make decent money and aren't "poor" or something, but that's not really a good reason to just buy a house to me, that's just being a selfish, self-important bitch. Leperflesh posted:I don't understand how a short sale is possible if the couple is selling the house for more than they owe on it. Hopefully someone will explain.
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Aug 23, 2009 23:12
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What have people's experiences with inspections been? My wife and I had an inspection for a house we were really excited about. It had almost no visible problems, so we were hoping the insides of the house were taken care of just as well. Unfortunately, some big ticket items needed to be replaced, including the roof, second story deck, attic ventilation, and boiler. Then there were lots of smaller issues as well. We're not even going to bother with getting quotes for all those, as it'll total at least $50,000 and that's not even including the minor items.
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Aug 24, 2009 01:11
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We had a good inspector and agent. After our inspection was done and a few medium-sized problems were identified, we were able to get the seller to lower the price by $10K from our already-accepted offer, and got our lender to keep the $10K in the loan so we'd have money available to get the work done. If you've just started looking, or don't really love this house in particular, I'd say to walk. But if you, as you said, are really excited about it, play hardball! Get quotes! Then talk to the seller about all the work that the house needs. They'll have to come down on price - any other buyer is going to have an inspection done and find all the same problems.
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Aug 24, 2009 03:32
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DerbyTime!!! posted:We had a good inspector and agent. After our inspection was done and a few medium-sized problems were identified, we were able to get the seller to lower the price by $10K from our already-accepted offer, and got our lender to keep the $10K in the loan so we'd have money available to get the work done. Can you make these types of negotiations when dealing with a bank-owned property? Everything in my price range is bank owned, foreclosure, or short sale, and it's my understanding that you make an offer and it's either accepted or rejected - no room for bargaining. Has anyone had a different experience with bank owned properties? Much to my surprise, and shock, I was told last week that the bank had accepted the offer I put in on a house and literally gave me 24 hours to sign off on the contract. My head was spinning from the whole ordeal, and I wasn't happy with the monthly payments after crunching the numbers, so I backed out of the deal. But I'm wondering if I should have had the inspection done anyways and tried to haggle on the sales price. It was a multiple-offer foreclosure (I think roughly 15 other offers), so I imagine if I tried to haggle they'd just go to the next buyer. I also learned an extremely important lesson. Don't bid on a house unless you are 100% sure you can afford it should your offer be accepted. In my defense, I viewed the home at 10am on a weekday and the bank wanted the offers in by noon the same day. I was in such a hurry to get a bid in that I forgot to take into account the tax rate on the property, which was 4.6% of the list price and priced me thoroughly out of my comfortable monthly payment range. I couldn't stomach paying more for property taxes on a house than I pay in rent for my entire apartment. The Shep fucked around with this message at 07:54 on Aug 24, 2009 |
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Aug 24, 2009 07:49
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Cmdr. Shepard posted:Can you make these types of negotiations when dealing with a bank-owned property? Everything in my price range is bank owned, foreclosure, or short sale, and it's my understanding that you make an offer and it's either accepted or rejected - no room for bargaining.
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Aug 24, 2009 16:10
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DerbyTime!!! posted:We had a good inspector and agent. After our inspection was done and a few medium-sized problems were identified, we were able to get the seller to lower the price by $10K from our already-accepted offer, and got our lender to keep the $10K in the loan so we'd have money available to get the work done. Thanks for the response. It's also really good to know we can keep the money we negotiate in the loan, since there's no way we'd have $50k lying around for the repairs.
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Aug 24, 2009 17:30
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Cmdr. Shepard posted:Can you make these types of negotiations when dealing with a bank-owned property? Everything in my price range is bank owned, foreclosure, or short sale, and it's my understanding that you make an offer and it's either accepted or rejected - no room for bargaining. My wife and I interviewed two realtors this weekend. I asked exactly this question of both, and their answers were basically the same (and surprising to me). -It used to be (2+ years ago and more) that with REOs, the bank would not negotiate further on price, regardless of condition. However, with the huge flood of forclosures, some banks are willing to do that and others aren't. Both realtors said they'd closed multiple properties where the buyer asked for price concessions based on condition problems that were revealed by inspections post-bid; but that other banks simply weren't interested in doing that, even if it meant losing the sale and having to put the house back up. Surprisingly (to me, anyway), they said this was not the case with short sales (or at least, much less so). One realtor said negotiating on short sales was far more difficult; usually the seller accepts your bid, sends it along to their bank along with all kinds of other paperwork, they sit on it and do nothing at all for a month or three, and then all in one day, stuff goes through or gets rejected. At no time in that process is it easy to change what your bid was... your bid may get sent back to the bottom of the stack (which the seller doesn't want) or it may simply be rejected outright. Worse, with short sales, sometimes the bank's left hand doesn't know what the right hand is doing; a house up for short sale, with an accepted bid, sits there waiting for bank approval for two months with no progress... and then suddenly the bank initiates forclosure on the seller, which yanks the rug out from under the short sale (and makes zero financial sense for the bank, besides). I'm kind of pleased, because I was worried about bidding on the bank-owned properties, thinking that if my inspections showed lots of bad problems, but the house still appraised high enough to meet the bid amount, I'd not be able to get any concessions on price and potentially be stuck eating the cost of the repairs. Knowing that that is unlikely (I can pull out if the bank won't budge) makes me a feel a lot better about bidding on some of these houses, particularly since most of the ones I'm looking at were built either in the 1950s, or the 1920s. As for keeping the money you negotiated in the loan, Strict 9, I would check carefully about whether there are any tax or legal consequences of that. I know the FHA has a fix-it loan category, but my financier guy explained that when you do those, the work is monitored by the FHA, they write the checks directly to the contractors, and you probably never see the cash yourself. They don't want people taking the extra money supposedly part of a secured mortgage, and blowing it on a speedboat or a cruise to alaska or hookers or whatever. It does make sense for a lender to be willing to do it, though, when you think about it; it's a secured loan, with the property as the security. If a small extra investment makes that security more valuable/more likely to retain its value longer, that makes their own loan less risky. It also says good things about the buyer that he is interested in maintaining and improving the property. Edit: Oh, another thing. If a buyer bids on a forclosure, does inspections, and then backs out of the purchase (for any reason), the results of those inspections are still public records. I asked because it seems to me, a house that's had that process is more attractive to me; I'll know the condition before I make a bid, so I can more accurately assess what I'm willing to bid for it. I had thought maybe those records disappeared with the buyer dropping out, or that the bank would prefer to keep them secret if they're bad news, but evidently not. Which is cool. Leperflesh fucked around with this message at 18:35 on Aug 24, 2009 |
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Aug 24, 2009 18:32
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I still don't understand how you're seriously considering buying with 5k in savings, 13k in CC debt and 40k in student loans. Also, your posts are long.
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Aug 24, 2009 19:16
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Mostly because, with the right price (below $250k), I will actually be reducing my monthly costs for housing. It is literally cheaper for me to buy than rent. And that monthly cost includes mortgage, the FHA insurance that is instead of PMI, state and local taxes, insurance (including earthquake insurance), AND a generous allotment for maintenance and upkeep. And higher utilities. Secondarily, because I'm sick of renting and I don't have to any more. Is it a risk? Yes, a substantial one. I feel I am at an age (34), employment status (senior level in an in-demand career, 5+ years at the current job, etc.), and financial profile where the benefits outweigh the risk to me. Yes, I could lose every dollar I spend on this house, and then some. We've got our eyes wide open on that. And yeah I post long posts. Relatively speaking. I could take the time to carefully edit them down I suppose, but this isn't exactly a formal/professional format. Edit: An interesting thing. The California 90-day "moratorium" on foreclosures (which was largely toothless, since banks could still foreclose if they had a program in place to assist underwater owners re-negotiate their mortgages) is set to expire Sept. 15th. Since it appears from various news stores that "most"(?) banks qualified for the exemption allowing them to process foreclosures anyway, there shouldn't be a sudden huge flood on Sept. 16th of fresh foreclosures. But... I wonder. We may hold off making any offers until after that date just to see what happens. Leperflesh fucked around with this message at 22:26 on Aug 24, 2009 |
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Aug 24, 2009 22:11
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What do you think your monthly payment on a $250k house will be-- all things considered. P+I, insurances (FHA, homeowners, earthquake, etc) and property taxes? Why wouldn't you focus on paying down your current debt instead of taking on more? The mere fact that you have 13k in credit card debt tells me you don't have the money to purchase and own a house.
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Aug 24, 2009 22:39
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Well, it seems to me that I can do both... but it is a good point. I suppose because we are not sure if this might be our only opportunity ever to afford a house in the bay area. Not that prices are going to get back to what they were for a very, very long time (if ever), but houses below $200k here really does seem like a short-term artifact of the crazy-bad mortgage crisis, and not at all a reflection of supply vs. demand once that backlog of bad debt is cleared out. I realize a lot of folks are sure that things are going to get much worse before they get better (and that's certainly a possibility). A more likely scenario is that prices continue to decline at the top of the market ($500k+) here for another year, two at the most, and then hit a stagnated spot for another 5+ years where prices become fairly stable, maybe rise enough to keep abreast with inflation, and that's it. Even if that happens I expect $200k houses to be gone in a year, unless you move out to Antioch, Pittsburgh, Tracy, and Sacramento suburbs. Frankly I'm looking at houses within 20 minutes of San Francisco or the Peninsula, and that's just always going to be a premium. Even so, even so. It's a risk. We go back over the numbers every couple of days and remind eachother that we can always back out, that waiting a year isn't a bad idea, that we're in a good spot right now and we'd be comfortable not buying yet. We're moving forward with getting a realtor and getting inside some of these $200k places, but if we're not excited about what we see, then it's not gonna happen. I sorta feel like I've been dominating this thread recently and not really contributing much. I'll continue to answer questions if people want to ask me stuff, but I'm not sure I'm a good example of a typical buyer; advice that is right for me probably isn't right for a lot of other people, especially people not in the SF Bay Area Halo of Weirdness.
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Aug 24, 2009 22:52
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There's no guarantee that housing in CA won't stay down for an extended period of time, just look at Michigan.
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Aug 24, 2009 23:38
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Mister Fister posted:There's no guarantee that housing in CA won't stay down for an extended period of time, just look at Michigan. I hope I've been totally clear in what I've said before, that I am fully aware of this as a risk factor. That said: California and Michigan are very, very different. Demographically, economically, climate-wise... really, totally different in so many ways. And of course we can only make educated guesses at what Michigan's real estate market will be like in 2014.
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Aug 25, 2009 01:36
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Leperflesh posted:Mostly because, with the right price (below $250k), I will actually be reducing my monthly costs for housing. It is literally cheaper for me to buy than rent. And that monthly cost includes mortgage, the FHA insurance that is instead of PMI, state and local taxes, insurance (including earthquake insurance), AND a generous allotment for maintenance and upkeep. And higher utilities. You pay $1650 in rent now. You seriously think that it will be cheaper than that for you to own a house with a near-$250,000 mortgage, of which you put nothing down? I don't know why I'm wasting the time to type this since you seem retarded but here goes. $1250 : Mortgage payment for 30 year loan $225,000 @ 5.33% $200: Property Tax (CA seems to be 1%) $50: Average Insurance -$79: Fed Inc Tax Savings (.25*(($3200CAtax+$11992int)-$11400standard))/12 $50: "Increased Utilities" $75: "FHA Insurance" $30: Garbage $20: Water Total assuming nothing ever breaks, ever: $1596 poo poo that breaks monthly-ized: $40: HVAC System (Replace every 15 years for $7000) $5: Water Heater (10 Years, $600) $42: Kitchen Appliances (10 Years, $5000) $58: Roof (10 Years, $7000) Garage door opener, sump pump, windows, insulation, electrical panel, carpeting replacement/cleaning, painting the walls, plumbing problems, tools to do all these things that you never needed before, lawnmower, driveway shoveling, siding, lawncare, plants, driveway repaving/resealing.......... I gave up thinking of stuff but it is almost endless. And it doesn't even matter since your budget leaves a "generous allotment" of $54 a month in it under the best scenario before you ever bothered to remember that stuff stops working eventually. And all these numbers are just for a $225k mortgage at a good rate, which you probably won't even get because you have no downpayment and tons of debt and little income. Just because you're 34 doesn't mean life gives you financial stability and a house. You still have to put forth effort to achieve it. Or you could buy the house and hope for another round of federal homeowner bailouts in a few more years.
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Aug 25, 2009 04:03
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Actually, checking my own spreadsheet, at $250k the costs worked out to closer to $1800. It's the run at $200k that is cheaper; we went up to $250k because I have that room in my budget. I could nitpick your laundry-list of costs (some won't apply, others will be a bit cheaper for various reasons) but I won't bother. The gist of it is "home maintenance is loving expensive" and that's pretty much true. This, however: Droo posted:... for a $225k mortgage at a good rate, which you probably won't even get because you have no downpayment and tons of debt and little income. I am already qualified for a good rate; I am putting down a downpayment (although I guess maybe by "no downpayment" you were denigrating the minimal downpayment; if so, fair enough), and "little income" is just plain wrong. I don't think life owes me a house. I have financial stability and have had it for upwards of ten years. I've never been in any serious financial risk since I graduated from college, and I've never had a bad credit score either (I check annually). Yes, I have more unsecured debt than I ought to. It's a salient point. I think your post is hyperbole though, I guess because this is SA and obviously goons always ignore advice and I'm in a well digging a tunnel or whatever. Tonight I talked to the wife and we agreed $250k was too high. We're gonna aim at $200k, maybe go to $210 or $220 if we can get something in very good condition for that.
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Aug 25, 2009 04:32
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Droo posted:-$79: Fed Inc Tax Savings (.25*(($3200CAtax+$11992int)-$11400standard))/12 Not to derail your discussion, but I just wanted to say thanks for this formula. I had no idea it was so easy to at least approximate tax savings for owning a home. Plus I assume the additional expenses you can list when you itemize (like medical) would only add to those savings.
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Aug 25, 2009 15:32
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Strict 9 posted:Not to derail your discussion, but I just wanted to say thanks for this formula. I had no idea it was so easy to at least approximate tax savings for owning a home. Plus I assume the additional expenses you can list when you itemize (like medical) would only add to those savings. Way off topic but you can only list your medical expenses that exceed 7.5% of your gross income.
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Aug 25, 2009 23:41
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Does anyone have familiarity with 1031 exchanges? (yes, I know the actual process requires a CPA, attorney, realtor, intermediary, and certified shaman with appropriate spirit animal, but just putting out feelers here) I was under the impression that one could do the following: - Sell a rental property for $600,000 - Pay off existing mortgage of $300,000 (Net $300,000 from transaction) - Purchase new rental property for $500,000 I have someone (who is only slightly familiar with the rules) who says that the new property has to have a purchase price at or above the selling price of the original, regardless of the amount of existing loan. Is this true?
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Aug 26, 2009 00:07
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The introductory text on this page pretty much outright says that that is not true.some website posted:The two major rules to follow are: You should probably check with a tax attorney before seriously considering such a thing though, to make sure you qualify and there are no niggling exceptions that would rule something out.
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Aug 26, 2009 00:16
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moana posted:Yeah, that takes a lot longer than you'd think. We closed end of May and haven't gotten our rebate - we called the IRS and they said there's a huge backlog. Uggh, I just filed my amended return - I'm wondering if I just shouldn't have bothered and waited until my 2009 taxes - It sounds like there will only be a 1 or 2 month difference...
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Aug 26, 2009 01:03
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Does hand money go towards closing cost or the total loan amount?
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Aug 26, 2009 17:29
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Pondering at the moment if it is worth getting into a house at the end of this year (probably try to get that housing credit as well). Fiancee and I are going to move in together next year no matter what, so weighing the options and trying to get a few approvals and what not. Financial situation: 24, no debt, 15,000 for a downpayment, 750 credit score, 2500 a month for expenses including rent, Fiancee has some car debt, and about half that for down payment. The guide on the first page is loving great, I was looking around for a step by step guide and checklist on everything (especially the linked 38 page one). Does anyone have any good ways of picking a decent Realtor? We've been doing a lot of good research and found some places that look nice, what else is a Realtor going to do for us really (other than place bids and poo poo) than we are doing ourselves, online and what not?
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Aug 27, 2009 05:52
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