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Inept posted:Why do you want to purchase a home that costs 5.5x your gross annual income? Why do you want to buy period? If you're 21-22, tying yourself to multiple properties will make it difficult to be mobile if you ever want to go somewhere else. Renting an equivalent property would cost me roughly 500$ per month then buying it, my downpayment is a gift. Doesn't make sense to rent. The houses im looking at are also in a desirable school district and I have younger siblings who could take advantage of my address. As for tying me down, I understand, although my job is mainly based in this city and I don't see myself finding something more lucrative anytime soon. Worse comes to worse I rent it out, but I think i'll be stable here for the next five years at least.
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Jan 12, 2010 05:39
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Leperflesh posted:I refer you to the long-term investing thread. Figuring out the best way to invest your money for long-term gain is not always straightforward. Thanks man.
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Jan 12, 2010 06:04
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Fun With Escrows Closed on my house back in August and it's been awesome, so good luck to everyone buying, but had an interesting little story to tell. Recently my escrow went under by about $2500. This caused the mortgage company to recalculate my payments to balance the debt and add enough to ensure it doesn't happen next year.. This raised my payments $500/m I knew this was wrong, and in researching, it turns out that the mortgage company paid my township almost $5000.00 for some unknown reason.. Many calls (including a 3-way call with the township) they determined nobody has any idea why that payment was ever made. So they need to reimburse me that money. 2 months later, still not reimbursed. In the mean time I have to pay the $500 extra a month since they can't recalculate until the reimbursement is fulfilled. Now I know, even when this does get fixed and they reimburse me, my account is likely to have excess, which will result in next year a smaller payment, which will result in a shortage causing the following year to go up.. Back and forth, back and forth. Got to love escrow accounts. Enjoy being homeowners! Moral of story, keep an eye on your statements, be persistent, and make sure you have money set aside for unexpected expenses.
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Jan 12, 2010 19:34
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Ha, and I thought it was annoying that I have to badger the title company to get more money from the seller since the property taxes went up this year, but their pro-rated payment at closing was based on last year's amount.
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Jan 12, 2010 19:38
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FidgetyRat posted:Fun With Escrows You must mean an impound escrow account for tax payment? That was standard when we bought the house 8 years ago (for which escrow closed yesterday YAY), but for our pending purchase they said they don't really do that any more unless you need it for some reason. I don't think we are going to do it this time around, but just pay our tax bills instead. Now if only the HOA matter can get cleared up on our purchase. We might close Friday!
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Jan 13, 2010 16:58
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belle of my ballz posted:Renting an equivalent property would cost me roughly 500$ per month then buying it belle of my ballz posted:Doesn't make sense to rent belle of my ballz posted:Worse comes to worse I rent it out, but I think i'll be stable here for the next five years at least.
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Jan 14, 2010 12:58
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Has anyone in this thread had experience with, and can offer advice on: 203K loans. Basically our realtor said that this can be an option if we really liked the house, but it really needed some work. I judged this to be as some sort of repair needed that is extremely expensive- like roofing, heating system, etc. I was curious if anyone has tried to deal with this. Apparently you need to find a lender with experience on 203Ks and an experienced contractor or else it ends up to be a big mess (i.e. the lender has to know how to file it, and the contractor not only has to know how to file correctly, but also has to know how to properly value the work) Short Sales. Our realtor said that in these instances, it usually takes a long time to close- or get info from the bank about trying to buy a short sale house. Like, after making an offer, it can take forever to get a response or to move the process forward. Is this usually the case? There's this new act (I forget the acronym, sorry) where it has some sort of regulation on how up-front the realtor/lender has to be on closing costs or something.
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Jan 14, 2010 17:07
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El Mariachi posted:Short Sales. Short sales usually take a while, the banks take forever to get poo poo done and approve them. You can score a good deal though, my buddy just bought a beautiful house in Phoenix for about 190K. It sold brand new in late 2006 for 420K. It took them over 60 days from offer to close, closer to 90 I believe.
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Jan 14, 2010 17:51
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It's possible for short sales to close within 4 weeks of an offer if the agent knows what he's doing and has a good relationship with the lender. The problem is that most agents don't have that kind of relationship nor know what they're doing to be honest. So a lot of short sales will fall through when they could have happened in a timely manner with the right agent, and many others will drag on for 3-4 months. The banks have gotten a lot faster at handling short sales, so things should move along faster than they did, say, 2 years ago.
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Jan 14, 2010 21:08
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More anectodes, but when we were shopping for houses last fall, our realtor told us about one client he had who had been fighting for a short sale house for over a year. He had a colleague who also had two clients working short sales, both of which took more than 6 months to close. It is possible to close a short sale in under 90 days of course, but it requires both skill and a great deal of luck. Remember that in a short sale, the seller is basically asking their lender to take a bath on the loan, and their willingness to do that (and by how much) can change from one day to the next; you cannot count 100% on a given bank accepting a given short sale price on a given day, no matter what they said beforehand. All that said, it's possible to get a fantastic price via a short sale, in part because they're such a pain in the rear end that most buyers avoid them completely.
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Jan 14, 2010 22:39
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Most short sales that close in extremely short periods of time have already had an offer submitted and approved by the bank, only to then have the contract fall through at the last moment. This is why it doesn't hurt to have your offer on a short sale be a backup offer. In fact, every time you DON'T get an offer accepted by the seller, ask if you can be 1st backup. You have no obligations, but if you have backup offers in on a few places, you might just get a call several months down the road once all the bullshit has passed saying "Hey, if you want the house, it's yours."
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Jan 16, 2010 18:30
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money.cnn.com posted:Homebuyer tax credit: No e-file and four-month delays Looks like long waits for those of us who closed after Nov 6.
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Jan 16, 2010 21:07
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IndyPunkOne posted:Looks like long waits for those of us who closed after Nov 6. This definitely sucks, but I don't need the money that bad. It's just going right back into the saving account to replenish funds I used for the down payment. The amount of scammers out there hosed it up for everyone.
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Jan 16, 2010 21:48
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I filed in September or so, so I was lucky. Ended up filing on paper anyway thanks to a Turbotax hiccup or something. Sucks to be you guys... seems like appliance dude might have jumped the gun a little, though, if he can't float it for 4 months.
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Jan 16, 2010 21:55
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I closed last February and I'm filing in this years taxes. We'll see what happens.
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Jan 16, 2010 23:34
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I filed in the fourth week of October and am still waiting.
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Jan 17, 2010 00:50
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Thanks for posting that, IndyPunkOne. I had been planning to file electronically as soon as we get our tax forms (should be by the first week of Feb).
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Jan 17, 2010 01:43
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IndyPunkOne posted:Looks like long waits for those of us who closed after Nov 6. I filed in August and still have not received anything from the IRS. I called a few times and a month ago they told me I am being audited and will get papers in the mail. Yeah, it takes a month to mail papers? Guess I need to call them again. I don't buy this "don't blame the IRS, blame the scammers" poo poo. When I filed my papers I was thinking: "Uh, so what proof do I need to send with this?" The forms didn't ask for anything. You're telling me it took scammers for them to realize they should require proof?
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Jan 17, 2010 03:17
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IndyPunkOne posted:Looks like long waits for those of us who closed after Nov 6. I closed on June 30 and filed an addendum to my 2008 filings on July 6. Got my check 4 months later to the day.
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Jan 18, 2010 16:39
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Mark Kidd posted:I filed in the fourth week of October and am still waiting. Same here. Was planning on calling soon.
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Jan 18, 2010 18:36
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Should I expect a similar delay for closing on our house in July? What a clusterfuck.
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Jan 19, 2010 14:20
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July 2009, right? If you haven't already filed for the credit, then yes, absolutely.
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Jan 19, 2010 23:47
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Hi all, I've read through the whole thread and been following it for a while and I just want to say that I've learned a lot. So far I haven't posted since all I really had to offer was my E/N bullshit rants about various things, but as of last night my wife and I are in contract for a house that we're both really excited and happy about. The big surprise of the story is that the house we ended up getting is about 25% below most of what we'd been looking at and been pre-approved for which is awesome. There's suddenly a new decision to make which is whether to stick to the 30yr mortgage we had intended on or move up to a 15yr loan (both conventional, 20% down). The upside of the 15yr is obviously that you save a ton in interest over the course of the loan. We're both very disciplined about our finances and I don't think there'd be any issue with paying down the principal significantly each month (possibly even paying the same amount as the 15yr) if we went with the 30yr. The benefit to the 30yr in my eyes is flexibility. Perhaps it's just first time jitters mixed with the current economic climate, but the option of having our minimum payment be 1/6 of our current gross income rather than 1/4 if times got tough is pretty tempting. That said, I was shocked to see the difference in interest rates for us was 3/4 of a percent between a 15yr and 30yr loan and with that much interest money on the table I think the 15yr may be just too tempting.
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Jan 20, 2010 03:07
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I notice Pen Fed is offering a 5/5 ARM at 4.0%. Worst case scenario on that is 6% in years 6-10, 8% in years 11-15, 9% thereafter. I have a 30-year mortgage that I'm paying on the 15-year schedule, but my minimum payment is already 25% of my gross income and I wasn't comfortable without the flexibility. But 3/4 of a point? Wow.
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Jan 20, 2010 03:21
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Yeah, that's a big enough difference to make me pause. If you have enough saved up as an emergency, I would probably be leaning towards the 15 year just because of the better rate. How long would it take you to save up 6 months - 1 year of payments? Do you have parents who would pitch in if anything happened like one of you lost their job? Would you be able to make the 15 year payments on only one income?
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Jan 20, 2010 03:55
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moana posted:Yeah, that's a big enough difference to make me pause. If you have enough saved up as an emergency, I would probably be leaning towards the 15 year just because of the better rate. How long would it take you to save up 6 months - 1 year of payments? Do you have parents who would pitch in if anything happened like one of you lost their job? Would you be able to make the 15 year payments on only one income? If we put 20% down I think we'd still have close to a years worth of payments saved up. Both our parents are very financially stable (although nearing retirement) and would certainly give/lend us money if we needed it (although my stomach churns thinking of hitting that point). One income would probably be tough at the moment, but in 18 months it will get much easier (Wife is currently finishing graduate school). We got more rates from our other lender option today and they're even better looking so I think that will clinch it.
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Jan 20, 2010 05:20
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Is there public access anywhere to data on mortgage delinquencies in a region? I am wondering if there will be a glut of foreclosures to come in the East Bay, CA region and whether I should wait a few months while those play out. Seems like most sources lead me to believe that there will be lots more homes foreclosed upon soon.
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Jan 20, 2010 06:57
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I don't know about your specific region, but this graph has been posted in the thread a couple times: We're looking at at least 2 1/2 years of new mortage defaults coming up.
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Jan 20, 2010 08:42
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 Waited over 30 days for the IRS to mail me a list of requested documents. Called today and they're going to "resend" within another 30 days. God bless America 
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Jan 21, 2010 03:46
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BorderPatrol posted:I don't know about your specific region, but this graph has been posted in the thread a couple times: It's an important chart to look at and good to keep seeing it, but, it should be understood that there is a huge difference between subprime mortgages and the other types, in terms of quality (that is to say, the rate of default we should expect). It is also the case that the resets of alt-a and option-ARMs are mitigated by the continuing very low interest rates. To me, a much larger input into the rates of mortgage defaults (and, by extension, housing prices, which respond to both in the same direction) is the unemployment rate. When someone loses their job, it doesn't really matter whether their mortgage was prime, subprime, alt-A, resetting, or whatever. When their money runs out and they can't afford to pay the mortgage any more, they're in default regardless. Unemployment is a 'trailing indicator'. While leading indicators seem to show improvement (technically, the recession has been over for some time now - the economy is growing, albeit very sluggishly), we can expect unemployment to be grim for a while yet, and so (based on that) I agree with the sentiment that there will continue to be high rates of default in 2010. All that said: something is fishy. The vast pool of "shadow inventory" that has been reported on for nearly a year now keeps failing to materialize. I've read, and posted in this thread, a number of articles warning about the huge numbers of mortgages that are way, way behind on payments, but (for reasons that seem increasingly uncertain) the banks have not yet put into foreclosure. But when are they going to show up in the market? In the East Bay, where I just bought a house in December (Concord, CA, specifically), my comps sheet and everything I've been able to turn up with my own research has shown a rapidly decreasing inventory all through the late summer and fall, such that by the time I made my offer in December, there was less than two weeks of inventory and many properties were going into escrow within a week of hitting the market. That is the opposite of what we should expect, if the warnings about high unemployment and tons of bad mortgages and all that shadow inventory are valid. So what's going on? Honestly I'm just not sure. Perhaps the statistics are off, flawed in some way. Maybe my area is exceptional (the Bay Area certainly is a unique market). Maybe all the banks are hanging on to inventory to avoid 'realizing' massive losses, preferring to have at least one or two "profitable" quarters on the books beforehand... but there is so much intense scrutiny of the largest banks right now, that that seems unlikely. Maybe they're all timing the market, hoping to recover value in these bad properties by holding them until the overall housing market improves... but that runs exactly counter to the universal explanation I've always heard, that banks "hate" to hold on to houses that aren't getting payments made, preferring to sell at a substantial loss rather than hold them. Has that changed so radically this year, and yet nobody has figured it out? So what I'm really thinking, when all of this comes together, is: maybe don't try to time the market here in the Bay Area. If you want a house, save up till you can afford one and then buy one. Maybe you'll miss out on prices that wind up 10% lower a year later, or maybe you'll be too late and wind up having missed the bottom 6 months earlier; but the simple truth is, nobody really knows, and even really, really smart people whose entire job is to figure this poo poo out, are throwing up their hands and admitting it's all pretty much unpredictable for the next year or two. You're not likely to do any better than the experts, and in all probability if you try, you'll do worse. If that scares you too much, then save your money and stay out of the market. If you aren't scared off by that, then jump in when you have the down payment and you're ready to pack up and move, and don't worry too much about timing the market.
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Jan 21, 2010 05:34
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Leperflesh posted:It's an important chart to look at and good to keep seeing it, but, it should be understood that there is a huge difference between subprime mortgages and the other types, in terms of quality (that is to say, the rate of default we should expect). Not really. Alt-A and Option Arms are a powder keg waiting to go up - for exactly the same reasons sub prime blew up two years ago. http://online.wsj.com/article/SB124657539489189043.html
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Jan 21, 2010 05:49
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Well, actually, I that article kind of reinforces my point. If most foreclosures are due to negative equity, than a given reset-date for an Alt-A or Option-ARM is irrelevant; those homeowners won't suddenly become underwater when their loan resets in July 2010, if they weren't already.quote:A significant reduction in foreclosures will happen when and only when housing prices stop falling and unemployment stops rising (see chart nearby). The corollary to this is that a significant increase in foreclosures is unlikely to happen unless housing prices suddenly fall more or unemployment suddenly rises more. If unemployment is flat for 2010 (where it was rising rapidly in 2009), then we should assume foreclosures will drop and housing prices will flatten, and (per the article) we don't really care that there are a bunch of resets coming up. Look at that chart again. It posits a huge increase in defaults for 2010, but it does so on the premise that ARMs and ALT-As will experience a sudden increase in foreclosures vs. 2009 and earlier, without regard to housing prices or unemployment. Your article says that just isn't the important factor. I'm agreeing and saying that I expect foreclosures might be flat or even down somewhat for 2010, because economic indicators suggest flat or improving employment, continued low interest rates, and no other external factor pumping up foreclosures... unless the "shadow inventory" suddenly materializes.
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Jan 21, 2010 06:26
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Leperflesh posted:July 2009, right? If you haven't already filed for the credit, then yes, absolutely. Yes, and damnit to hell. We don't NEED the money, but we're trying to pay poo poo off and it would certainly come in handy!
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Jan 21, 2010 14:55
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Update: Going to pick up the keys to the new house today, only ten days after we were originally supposed to close. Between the Appraisal issue on the sale and and the HOA and other issues on the purchase, it wasn't an easy process, but at least we're done. Now we have to figure out how to move in three days.  With all the delays with the tax credit, I'm thinking of holding off until 2010 tax time.
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Jan 21, 2010 17:49
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If you do decide to delay, you're basically giving the government a year of interest-free loan of that $8k. Why would you do that? Even if it takes them 9 months, you'd still get the money a lot sooner by filing for it immediately.
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Jan 21, 2010 23:23
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Leperflesh posted:If you do decide to delay, you're basically giving the government a year of interest-free loan of that $8k. Why would you do that? Because without it you can e-file your taxes, among other things. In my case, the reason I waited to file until this year is that I married my wife this past April - my individual income meant that amending my taxes to get the credit would have led to a reduced credit, but when we file jointly we get the whole thing.
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Jan 22, 2010 00:44
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That certainly makes sense, for you (the married part). I can't see e-filing being worth delaying $8000 by a year, at least to me, though. Even if you did nothing but stick it in CDs for a year, at 3% interest, it'd earn you $240 in that period.
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Jan 22, 2010 01:01
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geetee posted:
Wouldn't it be the same listed in the instructions for form 5405? http://www.irs.gov/pub/irs-pdf/i5405.pdf
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Jan 22, 2010 02:02
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Leperflesh posted:If you do decide to delay, you're basically giving the government a year of interest-free loan of that $8k. Why would you do that? My income in 2010 will be lower than 2009. Filing in 2009 probably means reduced or no benefit due to income limits, which will not be a problem for 2010 taxes (moving from two to one income household, and adding a dependent). If anyone is interested in a discussion on the way appraisals are handled in CA, I am happy to go into more detail now having gotten through everything.
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Jan 22, 2010 02:51
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IndyPunkOne posted:Wouldn't it be the same listed in the instructions for form 5405? Yep, probably exactly the same, but I can't send anything in until I get their request. It's beyond me why the original form didn't request proof. It's not rocket science, but it is the IRS after all...
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Jan 22, 2010 06:04
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