if you didn't think bush was an idiot before...

[Briansol]

renting IS a waste of money. After all you paid, you own nothing.
along the same lines, an interest-only loan IS a waste of money. after all you paid, you own nothing.

even if after 7 years, all you own is the front door, at least you own something

but if that's the case, you certainly did something wrong.

I've only been at my house since october, and i've already reduced my principle $3000. Doesn't seem like much, but when only $32 of my $2745 payment goes towards principle, i think $3000 is a solid figure

The zestimate (from zillow) is up $5k since i bought it, and is $5500 over my purchase price. While not 100% accurate by any means, i've earned about $8.5k in equity on my home in less than 6 months.

can't do that renting...

 

[totalburnout]

You don't own anything after paying for 5years, if you've lost all the equity in your home. This is yet another reason why banks are cautious with their mortgage lendings at the current time. No bank wants to take on the risk of a loan, when the collateral (the value of the house) is likely to all below the original mortgage price. Many people are upside down. You may not be upside down, but as I said there's a time and place to rent.

Your view of renting is skewed B, and it comes from a snobbish mindset. There's a time, place, and market to be in when you should consider renting and when you should consider buying.

 

[get_nick]

The zestimate (from zillow) is up $5k since i bought it, and is $5500 over my purchase price. While not 100% accurate by any means, i've earned about $8.5k in equity on my home in less than 6 months.

can't do that renting...

if i rent at $1400/month instead of buying at $2800/month for the same exact house. i save $1400/month.

1400x6=$8400.

Plus, i didn't have to pay a huge down payment, closing cost, upgrades, maintenence, or anything. I can't afford a big down, so it makes sense to rent. houses here aren't going up a huge amount. you cant sell a tree-house here right now.

 

[totalburnout]

if i rent at $1400/month instead of buying at $2800/month for the same exact house. i save $1400/month.

1400x6=$8400.

Plus, i didn't have to pay a huge down payment, closing cost, upgrades, maintenence, or anything. I can't afford a big down, so it makes sense to rent. houses here aren't going up a huge amount. you cant sell a tree-house here right now.

Plus that $8400 * 3% in a high yield savings account like ING, or * x% in the money market or * x% in the stock market as a long term investment or perhaps maxing out a 401k or other retirement plan.

The opportunity cost of that $8400 is quite large and very few people are intelligent enough to look at what they could have done with the money had it been available.

 

[Briansol]

Your view of renting is skewed B, and it comes from a snobbish mindset. There's a time, place, and market to be in when you should consider renting and when you should consider buying.

you're missing my point.... the time to buy IS now.

rates are stupid low
houses are cheap because people were stupid and now they can't afford them, thus it's a buyer's market.

if you're renting right now and not looking to buy, you're only going to pay more later, or rent the rest of your life/until this happens again (which it probably won't)

 

[totalburnout]

you're missing my point.... the time to buy IS now.

rates are stupid low
houses are cheap because people were stupid and now they can't afford them, thus it's a buyer's market.

if you're renting right now and not looking to buy, you're only going to pay more later, or rent the rest of your life/until this happens again (which it probably won't)

...and if you read the logic behind all my other posts, I would tend to agree. I said I would be buying a house a year down the road, if I was financially capable.

Current conditions are right to buy a house, because it fits the buy low, sell high philosophy.

Problem right now, despite rates being low, is that you need excellent credit history, a good debt ratio, and a substantial down payment in order to secure a loan. Lending standards have tightened significantly.

If you can buy now or in another 6 months when the market has bottomed out, then I would definitely argue that now is an excellent time to pull the trigger.

 

[Briansol]

Problem right now, despite rates being low, is that you need excellent credit history, a good debt ratio, and a substantial down payment in order to secure a loan. Lending standards have tightened significantly.

credit history, no one looks at. all they pull is your score. While history may make the score, you could have some bad notes out there and a decent score...

debt-to-income ratio: They want to see 40%. At 40%, you're an ideal client. at 50%, they don't really want to talk to you.

I went in with 58%. The problem being that i can't document/account for a good portion of my income, nor my rent from E. They wouldn't even LOOK at my 1099's. all they wanted to see was my W2. After my 1099's and rental income, i'm down to the 35-40 range or so.
I also put 0 down.

So, because i wasn't ideal, i ended up with a higher interest rate... 7 3/8% on a 40yr fixed.

Next month, I'm going to re-fi. I've already talked to a couple places, and they all want 6 month residency.
At 6.5% on a 30yr, my payment won't move. Effectively, i will be able to take 10 years off my mortgage.

If you can buy now or in another 6 months when the market has bottomed out,

IMO, it already has bottomed out. things are rising already.

mainly, winter is nearly over.

most houses list in spring time, close/move in june-july, market's done before school starts. not too many families move mid- school year.

 

[reckedracing]

IMO, it already has bottomed out. things are rising already.

a huge chunk of variable mortgage rates were going to reset in March of 2008 for the first time
the housing market crash hasn't even really started yet

i've been seeing a heavy influx of foreclosures on the market and they just keep coming

 

[totalburnout]

a huge chunk of variable mortgage rates were going to reset in March of 2008 for the first time
the housing market crash hasn't even really started yet

i've been seeing a heavy influx of foreclosures on the market and they just keep coming

werd.

We're not nearly bottomed out yet. We had the first wave of foreclosures, which really was a tiny percentage of home sales. Now in the last quarter we've seen a bigger second wave, but there will be at least one much larger wave to come.

Certain areas of the market may have bottomed out, like Nevada or other small pockets around the United States, but as a whole the housing market still has a ways to come down.

Funny that I read ING's email right before I hopped over here. It was about the company not being effected by the subprime mortgage crisis because of their continued promise between buyer and lender, that people should only buy homes they can afford.

 

[Sabz5150]

you're missing my point.... the time to buy IS now.

rates are stupid low
houses are cheap because people were stupid and now they can't afford them, thus it's a buyer's market.

if you're renting right now and not looking to buy, you're only going to pay more later, or rent the rest of your life/until this happens again (which it probably won't)

Give it till the mid/late summer... let another seasonal energy crunch tighten the thumbscrews.

 

[totalburnout]

Give it till the mid/late summer... let another seasonal energy crunch tighten the thumbscrews.

cue another threat from Venezuela to cut off oil shipments, and a middle eastern conflict. If the Saudis don't start offsetting the lack of production, then we're only going to see those oil prices increase. OPEC isn't too happy about the "over production" in Saudi Arabia; essentially oil experts have all concluded that the Saudis have intentionally overestimated their oil supply, so OPEC would allow for greater production capacity in the present time.

 

[Celerity]

Next month, I'm going to re-fi. I've already talked to a couple places, and they all want 6 month residency.
At 6.5% on a 30yr, my payment won't move. Effectively, i will be able to take 10 years off my mortgage.

Boy, I hope they kissed you first.

 

[Briansol]

i just threw that number out there. i have no solid figures for what i'm going to get. i'd LOVE to see 5's but i think its wishful thinking.

i got double the mortgage you have, which automatically puts me at higher risk 'according to them' to fail, which means i don't get the best rate.

 

[Celerity]

You have a 480k house ?

 

[Briansol]

double house != double mortgage

 

[endlesszeal]

i think in some parts of sacramento and the bay area, gas as hit $4.00. Average is around $3.60.

but yeah, speaking of homes, one of my roommates is trying to get a house and because we're paying like $1400 in fucking rent alone, she figured we can just help her pay mortage. doesnt bother me because i rather live in a nice house than the crappy apt we're in right now.

 

[totalburnout]

WSJ article on potential regulation of credit industry;

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