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We had saleswoman (?) come in for a mortgage company talk in our hospital today. The focus of the talk was aimed at first time homebuyers/young doctors. Thinks I learned: 1) ARM mortgages are great 2) Real estate is a great investment 3) Renting is throwing money away. 4) On a 200k mortage, the break-even point for buy versus rent is right around 2 years. It's like she was out of a mid-00's time machine.  Thanks for educating me House thread!
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Feb 21, 2012 23:31
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ObsidianBeast posted:Did she show the math on this? I'd love to see the assumptions that were made to come to that conclusion. No, it was her answer to the question I asked. I was curious because when I've run some numbers for my area through the NYT calculator, it always comes out to approximately 5-6 years or so on rent vs buy. She made it sound like a no-brainer.
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Feb 22, 2012 23:13
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Quick question about my situation: Age 25 (soon to be 26). I'll be spending the next 5 years in Madison, WI, earning 52k the first year, going up 2k/year, after which my income should go up by a decent amount. It looks like I could get a house for around 160k or rent for about 700/month or so. I don't plan on staying in Madison long term. The NYT calculator has the break-even point at right around 4 years or so. Still DO NEVER BUY right?
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Mar 21, 2012 00:08
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Dead Pressed posted:One year difference, no...I wouldn't buy. Unless your job is secure and they'll pay to move you if you'e definitely leaving after 5 years, or think you might be there for a while, I wouldn't really consider it, especially if you've never lived there. I personally think its a good idea to rent for at least year and really discover which parts of town you do or don't want to live in. The job is extremely secure and my next employer is likely to pay for moving costs, if that changes things. The part of living there for a year before buying does make sense however.
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Mar 21, 2012 00:44
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archangelwar posted:Just because someone offers relocation does not mean that they will provide you a means to escape your mortgage. Five years is too short, and I guarantee the calculator probably did not factor in everything necessary to pinpoint the breakeven point (most of these are sponsored by realty companies who have a vested interest in getting you to buy). I would always recommend someone rent for a year in a new location no matter what, just to become familiar with the area. Buying a house under a time crunch to have some place to live can easily result in compromises you would otherwise not make. It's just the NYTimes calculator, not one sponsored by a broker. Either way, you guys have convinced me that 5 years isn't enough time to take the risk of home ownership when the break-even point is 4 years. I'll say whenever I hear young doctors complaining about how poor they are they're inevitably still paying off their first mortgage on the house they bought during residency. Thanks dudes
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Mar 21, 2012 23:11
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Could someone reinforce the idea in my mind again that buying a house is stupid in my situation? 200k in med school debt (will be under IBR for the next 5 years, ie ~$400/mo) ~10k in savings, could probably get a loan from my parents for another 10k No other debt, single I'm moving to Madison, WI for the next 5 years to begin residency with my income starting at 52k and going up 2k/year. After that I will be earning significantly more barring major changes. I'd be looking at condos for around 150k. The current plan is to split an apartment with a roommate for at least the first year ($850/mo with parking). I know that I should get the idea out of my head but a few friends are buying homes in cases where they'll be somewhere for less time (3-4 years). Some are looking at so-called "physician loans" with nothing down, 5/7 year ARMs, no PMI, and other creative things. Now if I were to do it I'd look at something more traditional like a 30-year fixed (at least for the first 5 years), but could you guys remind me why it would still be a terrible idea to buy even if I were to sell it after leaving in 5 years? Or if I could pay it off relatively easily afterwards? edit: Renting an apt in the building would be about $1100/mo, although I'm living with a roommate for at least this year at 1/2 that price. Residency Evil fucked around with this message at 03:30 on Apr 2, 2012 |
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Apr 2, 2012 03:16
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Thanks guys, I forgot about the closing costs associated with selling a place on leaving and the knock it has on equity. To play devil's advocate, if I planned on keeping the place as a rental property for the future would that change things? Still a stupid idea?
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Apr 2, 2012 04:27
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CanadianSuperKing posted:As another medical student looking to buy a condo for residency, I don't think the question is really whether or not you could afford it. Despite your massive loans, yeah you can afford that kind of mortgage payment for five years, and even if you didn't really make the dent you want to in your student loans, you'd be able to make up for it surely afterwards (especially since I think you're going into rads?). It's just not necessarily the most financially savvy move to make if you're going to sell and move in five years. With all the costs of selling and everything you might break even or come out a little ahead, or you might be out some cash, or stuck with a place you can't get rid of. It's a bit of a liability to have in a period of your life where you might not really need it. Close, I'm going into radonc. Whenever I run the numbers it looks like the break-even point on buy versus rent is right around 4-6 years, even if it doesn't rise in value at all. I figure if anything I'd buy it and hold on to it as a future rental property, but then I run into the issue of whether I want to be a landlord that lives 2000 miles away. Even though it's a condo and not a house I imagine issues pop up. Anyone else want to chime in here?
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Apr 2, 2012 04:57
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sheri posted:Why do you want to purchase a condo for somewhere you are going to be for a short amount of time? I don't know if you have provided an answer for that. The way I see it, if it goes up in value over 4/5 years I'll have the the option of selling it and making money. If it stays the same/goes down, I can always hold on to it and rent it out in the future.
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Apr 2, 2012 15:25
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Bovril Delight posted:This is a bad idea. People have told you it's a bad idea. If you're going to make a terrible financial decision, just do it, but don't try to justify it when people have told you it's a bad idea. Seriously, a bad idea. People above have posted reasons that it's a bad idea over the short-term (5 years or so). If you take selling the apartment in 5 years out of the equation, is it still such a bad decision/gamble? Especially if I'll be able to pay it off afterwards? Again, I'm also against buying and have been for a while. I've got 200k in student loans, and I was hoping to have them paid off within 2 years after finishing residency. Paying off a mortgage in that time as well might not be possible. I'm just trying to float some ideas here.
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Apr 2, 2012 15:44
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Bovril Delight posted:This is a bad idea. People have told you it's a bad idea. If you're going to make a terrible financial decision, just do it, but don't try to justify it when people have told you it's a bad idea. Seriously, a bad idea. gvibes posted:You would need it to go up in value at a pretty high rate (for real estate) to make any money, once you consider transaction costs. How many times do I have to repeat that I'm pretty set on not buying? sheri posted:And you are absolutely correct in being "against buying." Your posting in this thread seems to indicate you are looking for any (small) reason to justify buying, and there just isn't one in your case. I wasn't going in to this assuming I'd buy it and sell after 5 years, but that I'd hold on to it for a while and rent it out down the road. Nevertheless, with the breakeven point being right around when I'd leave I'm not losing out by not buying. Thanks for the help!
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Apr 3, 2012 02:15
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Question about a standard 30 year fixed vs 7/1 ARM loan. We're weight the pros and cons of each. It looks like my APR on a standard 30 year fixed is 5%, 4.4% on a 7/1. That makes me think that the better option is the 30 year fixed, correct? I'm not sure what direction interests rates are going to be in 7 years, and the spread doesn't seem huge. Am I thinking about this the right way?
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Oct 29, 2018 21:47
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H110Hawk posted:The fed is pretty open about the direction of rates. (up) Lock it in now. If they drop you can always refinance. Ok, that's the impression I was under, as I understand the fed does try to give people a fairly good idea of where they want to go. Now to convince myself that buying is a good idea.
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Oct 29, 2018 22:26
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With regard to the 7/1 ARM versus 30 year mortgage option, does the thought regarding 30-year vs 7/1 change if we're planning on paying it off in under 10-15 years?
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Nov 1, 2018 11:47
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EAT FASTER!!!!!! posted:I don't think home sellers realize how much increasing interest rates are devaluing their homes. Yup, we're seeing this too. Anecdotally, my wife and I spoke to a real estate agent from NYC on vacation a few weeks back who said the housing market there has slowed down significantly. Between interest rates and the cap of the mortgage interest deduction, I think it's going to spread. We put a lowballish offer in on a house that got denied two weeks ago. Our realtor is telling us to sit tight and wait since the market is incredibly slow and we can potentially scoop something up for cheap(ish) relative to where things were a year or two ago.
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Nov 8, 2018 20:27
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Question about negotiating etiquette. We're looking at potentially buying a house, and have put an offer in that's admittedly a bit low (150k below their asking price, and 100k below what they paid for it). The sellers are working on a bit of a deadline, as they want to move to a bigger house and need to close on this house first. They declined our initial offer, but we're the only ones making an offer on this house, and they have a deadline. Should we be negotiating against ourselves here?
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Nov 21, 2018 14:52
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Gotcha. There is back channeling going on and it sounds like they will accept 50k below what they paid, but I'm not sure why they didn't formally counter.
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Nov 21, 2018 16:45
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H110Hawk posted:Probably wrote you off as a time waster. How does your -$150k asking compare to comps? We're above recent comps as far as price per square foot, which is why we/our agent thought their asking price was ambitious. Our agent working with us suggested the -150k offer.
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Nov 21, 2018 18:52
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silvergoose posted:That sounds like they vastly overpaid for their house and are trying to escape it without having to bring money to the table. Yup, I think that's the case. SpartanIvy posted:Or they dont actually want to sell but if an idiot comes along they'll go with it. My old CEO perpetually had his mansion listed for an extra couple million in case a football star or whoever decided they just had to have it. Apparently they need to sell this house so they can move to some even more expensive house they want.
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Nov 21, 2018 19:53
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silvergoose posted:Oh oh and also they probably got an interest free loan or thereabouts so the rate is gonna balloon soon so they *really* have to move. When did the house last sell? 2014
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Nov 21, 2018 20:09
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silvergoose posted:Yep, checks out, 5 years is the usual timeframe, so they want to get out without losing tons of money before the rate jumps. Motronic posted:lol, 5/1 ARM expiring. B-Nasty posted:This is the danger when people play the 'maybe a sucker will pay' excessively-high-price game. It's natural, and oftentimes correct, to look at a high DOM and wonder why nobody else snatched it up. It could be some hidden horror, or it could be that people have made offers, but the sellers are stubbornly clinging to a dream price. Either case can be a costly time-waste for buyers, especially in a hot market, and many will just pass altogether. Thanks for the help guys. Our agent is pretty helpful and thinks our offer is fair, fwiw. They've also replaced all of the windows during their time and have kept up with upkeep apparently. The red flags from the inspection 4 years ago were all addressed. We'll see what happens. Fwiw, it last sold in October 2014. Our offer is 200k below the "zestimate." Presumably those are useless? Residency Evil fucked around with this message at 22:05 on Nov 21, 2018 |
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Nov 21, 2018 22:03
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Residency Evil posted:Thanks for the help guys. Our agent is pretty helpful and thinks our offer is fair, fwiw. They've also replaced all of the windows during their time and have kept up with upkeep apparently. The red flags from the inspection 4 years ago were all addressed. We'll see what happens. Welp, looks like we may be getting the house for -170k below the "zestimate," -70k from what they paid. gently caress this may be happening. 
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Nov 24, 2018 17:21
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Spring Heeled Jack posted:Well I think I'm gonna be looking at houses soon. Been in our current house 3 1/2 years now and the wife wants to move back to PA (currently in MD near the border). Houses are generally cheaper but the taxes look to be double what I pay now. As someone who's currently benefiting from a situation like this, apparently pretty hard.
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Nov 24, 2018 21:46
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There is something extremely gratifying about sending off a BCC e-mail to fifteen mortgage brokers and just waiting for the responses. We signed our end, just waiting for the sellers. Since our price is so far below what they were expecting to sell the house for they're trying to work the sellers of the house they're buying to give them some assistance. Hopefully this ends up happening: we signed our end on Saturday and keep on hearing that they're going to co-sign "today."
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Nov 26, 2018 22:46
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Christ this drama continues. We agreed on a price and signed off on what we thought was our final offer on Friday, with the sellers supposed to cosign on Saturday. Nothing Saturday. Then it turns out they were on a ski trip and would sign Sunday. Nothing Sunday. Then it turns out they were on a ski trip AND waiting to talk to the sellers of the house that they're buying to get an extra 10-20k in assistance in closing costs to try to make up for the selling price of their home. This is not going to end well.
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Nov 27, 2018 12:30
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Residency Evil posted:Christ this drama continues. We agreed on a price and signed off on what we thought was our final offer on Friday, with the sellers supposed to cosign on Saturday. Nothing Saturday. Then it turns out they were on a ski trip and would sign Sunday. Nothing Sunday. Then it turns out they were on a ski trip AND waiting to talk to the sellers of the house that they're buying to get an extra 10-20k in assistance in closing costs to try to make up for the selling price of their home. This is not going to end well. Holy poo poo they signed; right before midnight before their other contract expired!
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Nov 28, 2018 12:28
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EAT FASTER!!!!!! posted:Homeownership is eternally questioning - do I own this, or does it own me? I wonder if my wife and I can hide that we bought a home from everyone at work.  Got a 4.25% 10/1 ARM. Hopefully this works out well. Residency Evil fucked around with this message at 23:01 on Nov 28, 2018 |
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Nov 28, 2018 22:57
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Is title insurance a common thing they want to screw you on? The estimate by my mortgage guy is thousands more than the estimate my broker gave me...
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Nov 29, 2018 03:04
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B-Nasty posted:Thousands in difference sounds awful high. I recently paid about $2800 for all the lender's title insurance F U fees and $500 on my (optional) title insurance on about a half-million property. Yeah, I was surprised too. I'm getting quoted almost $6k which sounds insane. Looks like I'll shop a bit.
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Nov 29, 2018 03:28
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Motronic posted:Absolutely. Thanks man. Is this something I should have a lawyer take a look over? The title insurance company has an arbitration clause in the agreement: I assume that's pretty standard?
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Dec 4, 2018 23:15
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Hoooly poo poo the $195 I spent on having a camera put down the drain is the best 200 bucks I've ever spent. The terracotta pipes outside the house to the sewer are filled with tree roots. We'll see how this goes over with the sellers. Other stuff included some leakage issues around the chimneys, some potential wood damage to the garage on one side, and some minor roof repairs. Pretty positive news except for the drain. We'll see what these sellers say.
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Dec 6, 2018 19:53
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One last thing: do I definitely want enhanced title insurance? It's about $500-600 difference.
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Dec 7, 2018 15:48
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gtkor posted:Yeah the enhanced one is the one that actually covers you not the lender. Ideally youll never need it, but it falls under incredibly well spent extra 600 bucks if you ever did. Sorry, the standard one covers me as well, doesn't it? Enhanced includes things like inflation protection.
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Dec 7, 2018 16:14
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On the topic of homeowner's insurance, is my best bet to give State Farm/Geico a call and go from there?
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Dec 8, 2018 22:40
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Should I be getting another housing inspection after the sellers fix the things we agreed to after the inspection?
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Dec 16, 2018 23:36
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Motronic posted:You should have specified licensed and bonded contractors + their detailed receipts as part of this process so that you don't really need to get a second inspection. Of course if there is cause for concern you can always request another walkthrough/inspection before your final (which should be literally right before closing......like after the seller leave and on your way to the closing table) and bring someone along who can verify the work. We did specify licensed/bonded contractors/receipts, but there are levels at which work can be done, right? I've seen that mortgage rates have dropped a bit over the past few weeks since we've gotten approval for a loan. Are we locked in to our interest rate?
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Dec 17, 2018 13:30
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Closing still scheduled for early January. What a market to buy in. 
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Dec 24, 2018 19:30
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We're (likely) closing on our house next Thursday. I sent an e-mail asking our mortgage guy about rates since they've dropped over the past month or so. This was his response:quote:Rates have gone a bit but not enough to get a lower one. I will double check but rates typically have to drop .5 in rate in order to renegotiate. They have not dropped that much. Is this true or just BS? We're potentially talking about tens of thousands of dollars here even with a relatively small drop.
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Jan 3, 2019 00:21
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Andy Dufresne posted:You have no commitment to your current mortgage guy. Shop others and see if his attitude changes. They get mad because they have to pay for your lock, but it's a cost of doing business like any other. Is this doable by next Thursday?
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Jan 3, 2019 01:01
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H110Hawk posted:Not really, and he knows that. You would have to get an extension on closing and risk the whole deal. Blah. Well, at least I can try I guess. On the topic of our house, we ended up having to get three appraisals. We're just waiting for the sellers to accept the final sales price adjustment. They've made all the repairs and are essentially moved in to their next house so I think we should be ok. Residency Evil fucked around with this message at 01:13 on Jan 3, 2019 |
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Jan 3, 2019 01:11
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