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Welcome to home ownership.Elephanthead posted:I have a 1970s built 6000 square foot house Your house is four times the size of mine... and I have a three bedroom house. How big is your family? That just seems cavernous to me.
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Aug 16, 2012 23:25
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Finished signing the refinance papers today! Only going to end up paying $2100 instead of $1900 per month and that's switching from 30 yr to 15 yr. I first contacted loandepot on July 21, which was... three weeks ago? Not bad!
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Aug 17, 2012 05:09
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Apparently my credit union has been under the impression that they're waiting on me to have an appraisal done, while I've been under the impression that I'm waiting on them to finalize the paperwork, and it looks like I'm going to miss my lock-in date. Since rates seem to be back up above 3%, should I just accept it and take the higher rate, or is it worth calling it off and waiting to see if rates dip back down again?
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Aug 17, 2012 17:06
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I probably need someone to tell me not to even think about buying a house right now, so that's why I'm posting. Everyone else in my life (especially parents) are URGING me to. Or else perhaps you guys will tell me it's doable so I can get started with the money pit! My fiance and I are expecting a (surprise) baby in February and our current living situation is a 1-bedroom apartment, so we definitely need to move somewhere larger. A 2 bedroom apartment would be doable, but having a third bedroom would be so much more convenient with the likelihood of our parents visiting often to see the baby, and 3 bedroom places to rent are very expensive compared to 2. We live in North Austin and plan to stay here indefinitely. I make 39k and he makes 50k (we both get a few bonuses but not including that in my considerations or our budget). I have a 13k car loan and 14k in student loans and he has a paid-off truck and 19k in student loans. Those debt payments add up to $750/month. Neither of us have credit card debt but both have some credit available in case of emergencies. Our wedding is going to be a BBQ at his parents' lake house so no worries with big expenses on that front. We have only been saving for a little while now, not thinking we'd have to leave this nice cheap $700/month apartment for a year or two yet. OOPS, A BABY! We have a little over 10k in savings and are saving about 1k a month at least. The houses I'd consider would be in the 140-170k range, preferably low square footage for savings on electric bills in this hell-climate. I know it looks like we'd need to try for a low down payment (FHA?) loan, which I realize would incur PMI. That seems like a drop in the bucket, though, compared to the 2.75% average property tax rates I've been seeing. It's hard for me to figure out what our monthly payments would be and whether we'd be better off renting and trying to save a little bit more for now (although the savings will slow as our rent increases). Any advice would be appreciated! Edit: We are both putting 5% in 401k and getting that matched, and also thinking about paying for childcare when I go back to work makes me want to vomit a little bit. very sparkly fucked around with this message at 17:37 on Aug 17, 2012 |
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Aug 17, 2012 17:08
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By even conservative guidelines, I think you would technically be able to afford a home of less than 2x your annual salary. But, I have some concerns. What sort of cash buffer do you have? It sounds like you don't have much for a down payment. Home ownership entails the potential of big unexpected expenses, so you have to be prepared for that. Personally, if 2 bedroom apartments are reasonable (say, 1000 or something like that), I would to rent a while longer to build up a buffer. e: Well, I suppose you will also need to factor day care into your budget. That can be expensive depending on where you live (most people I know pay over $20k a year, but I live in a big city). gvibes fucked around with this message at 17:43 on Aug 17, 2012 |
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Aug 17, 2012 17:41
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Austin sort of defies the "do never buy" advice because the market here is (or was) the 2nd fastest growing real estate market in the nation and Williamson County was the fastest growing county in the nation at some point, so prices are still going to be increasing and Apple is bringing a bunch of new jobs to town in the near future. However, like the disclaimers always go, past growth is no indication of future performance. Most houses you look at if you use the right sites will have exactly what they were assessed for and owed in property taxes on a year by year basis. Zillow lists it, just off the top of my head. Austin/Texas property taxes are extremely high. I looked at buying once and in the area we looked at, property taxes would be $300/month on top of house payments. Personally speaking, I'd be leery of buying with a kid on the way since you have no idea how much you're going to be spending on kid stuff and the last thing you need is a bunch of unexpected baby expenses and a bunch of new housing expenses on top of that. I wouldn't sign onto an expense I'm stuck with for the next 30 years when I have no idea what my budget will look like. Austin Energy is raising their rates fairly soon, too, so you'd want to check into that when trying to figure out utilities. Have you looked further out? Georgetown, Cedar Park, etc., are still relatively reasonable, rent-wise. Dr. Kyle Farnsworth fucked around with this message at 18:32 on Aug 17, 2012 |
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Aug 17, 2012 18:30
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very sparkly posted:I probably need someone to tell me not to even think about buying a house right now, so that's why I'm posting. Everyone else in my life (especially parents) are URGING me to. Or else perhaps you guys will tell me it's doable so I can get started with the money pit! Having a baby is a big risk. As an expecting parent I'm sure you're already being immersed in all the horrible nightmare scenarios you'd rather not think about, but I'm going to be honest instead of sparing your feelings. What if you have a special-needs baby? What if you have complications during birth? What if you or your spouse winds up needing to take several months off of work in order to take care of your newborn? It doesn't even have to be a terrible scenario: my stepmother was stuck in bed for the last 5 months of her second pregnancy, the birth was fine, her daughter was fine, but it meant she couldn't work at all for that time. It's not all that uncommon. Given that you have an unknowable financial risk pending, I think you absolutely should not compound your risk by taking on a new financial burden that will A) consume all of your savings, B) represent additional financial risk going forward, and C) add an enormous amount of stress to your life. Because buying a house isn't just expensive, it's super-stressful. On the flip side: You don't actually "need" more space when you have a newborn. It's really really nice, sure, but for the first few months you or your spouse will be waking up and getting up whenever your infant wakes up anyway... you might as well put the crib right in your bedroom. Makes for less fumbling around in the dark. And an infant's clothes don't take that much space. A changing table is nice but not required. Think of it this way: two or three billion people worldwide make do with one and two-room dwellings, in which they raise large families. You can handle it for six months. Once you have your healthy baby and get past the highest-risk portion, and also deal with any post-partum depression and stress, and get into the zone where you and your partner are actually getting a reasonable night's sleep every night? Well, then you'll be in much, much better position to plan your immediate financial future. The houses aren't going anywhere, even if the market has "hit bottom" already it's not going to shoot up like crazy. One thing though: if your parents are hassling you to buy immediately, tell them to pay for it. I mean, you can be nice about it, but basically put it on them: "listen we're having a baby this could be horribly expensive. If you think we can't wait a year, then please feel free to front us $20k (as a gift, not a loan) and we'll go for it. Otherwise, we'd rather wait till we're sure our baby is healthy and we're past the highest-stress zone before we start looking." Also you may qualify for better terms once you've paid down some more of your debt. Not sure, your debt-to-income isn't horrible, but it's significant enough to possibly matter. I'd keep making your regular payments, try to save as much cash as you can (always a good plan when you're expecting anyway), make sure your living situation is as stable as possible by January 1st (premature is always possible!), and don't put yourself in any pressure to even start looking/thinking about a house until maybe next July or so at the earliest. e. Oh and also of course all the regular caveats apply too: you should only be buying if you're sure you'll be staying in the same area for the next 8 to 10+ years, for certain. No career changes, no lifestyle changes, no job opportunities somewhere else. And of course, you'll need to be happy with the elementary schools in the area in which you buy, so you'll have to do your homework and evaluate those as you shop. You'll need to consider your finances not only in terms of "can we afford this now" but also "can we afford this when our child is 8, and we're having to feed, clothe, school, etc. as well as save for both our own retirement, and perhaps start a college fund, oh and are we planning on more kids? Or risking unplanned additional kids?" All of that stuff gets factored in when deciding whether or not to buy. Your parent's generation grew up in a world where people were much more likely to have a stable career at the same employer for 30 years... these days, people are more mobile in their employment, more likely to move, and frankly, for the middle class it's just a tighter financial picture all around (cost of living increase has outpaced real wage increases for decades). Many of them bought when they were in their mid-20s and it worked out great. Many others (like my parents) didn't buy till their early 40s, and now deeply regret not having bought much earlier. They grew up in the era where home ownership was the ultimate symbol of having firmly entrenched yourself in a "decent middle class lifestyle", and they probably are being heavily influenced by that idea when they urge you to buy now. They also are likely of the generation that saw houses go from maybe $30k during the sixties to $300k in the 90s/aughts... for their generation, home ownership wasn't just a lifestyle goal, it was a key to prosperity and some semblance of wealth. We live in a different world than they did and have to deal with different realities. It's much less likely for us that houses will go up in value tenfold over the next thirty years. Our generation is far more likely to change jobs two or three times per decade. We have tighter budgets and lower incomes compared to the cost of living. It's just not the same any more, and we need to be much more cautious about tying ourselves to a piece of property. Leperflesh fucked around with this message at 19:19 on Aug 17, 2012 |
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Aug 17, 2012 19:06
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Yeah, I'd move into a 2-bedroom and wait a couple of years. Once you have some savings built up, you can afford to conduct an extended search, waiting and watching the market until the right house in the right neighborhood comes along. It's a lot easier on kids to move before they start school rather than after, so you want to make sure the house you buy is one you are willing to spend decades in.
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Aug 17, 2012 19:23
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Konstantin posted:Yeah, I'd move into a 2-bedroom and wait a couple of years. Once you have some savings built up, you can afford to conduct an extended search, waiting and watching the market until the right house in the right neighborhood comes along. It's a lot easier on kids to move before they start school rather than after, so you want to make sure the house you buy is one you are willing to spend decades in. Do this. You will be a far more informed real estate shopper if you can be patient about it. Make it sort of a hobby. Go to open houses without the expectation of moving, and resist the urge to jump on a property because it's perfect or the best you've seen yet. We took this approach and it paid off in a big way. We basically sat down and came up with our (realistic) dream house, and started watching a few towns. Every 6-12 months we'd go through the "how close are we financially" exercise as well as getting back into the search/open house thing. This has been going on for 5-6 years now, starting right after we got married. In the meantime we've had our first child, and now that he's a year and a half old, we went through the exercise again. This time, we found we were very close to "there" financially. We happened to luck into what we think is a great deal that gives us almost everything we were looking for, and affordable enough that we were all the way there financially. Just bought it and expect to be there for 30+ years with no regrets and raise 2.3 kids there, etc. I'm sure I'll post in six months when I find out we're on a Native American burial ground or nuclear waste dump or whatever, but that's independent of recommending a slow, steady approach to finding and buying your dream house.
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Aug 17, 2012 19:41
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SlightlyMadman posted:Apparently my credit union has been under the impression that they're waiting on me to have an appraisal done, while I've been under the impression that I'm waiting on them to finalize the paperwork, and it looks like I'm going to miss my lock-in date. Since rates seem to be back up above 3%, should I just accept it and take the higher rate, or is it worth calling it off and waiting to see if rates dip back down again? There really is no reason to believe rates are dipping back down.
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Aug 18, 2012 04:06
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Thanks to everyone, especially Leperflesh, for the replies. I think I'll feel much more comfortable trying to save up for a while longer before we look into buying, especially until after the baby and daycare come into play. This made me feel better and gave me some things to talk over with my fiancé and our parents.
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Aug 18, 2012 05:15
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Gave my dad POA last week so he could put in an offer of $160k with a max of $200k on a house I haven't seen since I am away till late September on work. House is bank owned, priced at $250k, they have dropped the price by $50k in July. Located near downtown in a historic district. Asbestos siding, needs a new roof, no foundation, in an earthquake zone, is a historic building. Its two units with a total area of around 3500sq ft. Hope to get it for $200, spend another $40k for the basics to get it tenant ready (safe, new kitchen, bathrooms, roof). I will take the tax write off. Value is expected to depreciate rapidly.
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Aug 18, 2012 09:46
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lightpole posted:Asbestos siding, needs a new roof, no foundation, in an earthquake zone, is a historic building. Its two units with a total area of around 3500sq ft. Hope to get it for $200, spend another $40k for the basics to get it tenant ready (safe, new kitchen, bathrooms, roof). I will take the tax write off. Value is expected to depreciate rapidly.
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Aug 18, 2012 14:22
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gvibes posted:Maybe things are cheaper by you, but I don't think I could do asbestos removal, new kitchen, new bathrooms, and a new roof for anywhere near 40k (assuming you are doing the work yourself). Don't need to abate till I want to sell. Tenant ready is $40k, sale ready is $200k. If I start ripping in to siding we would probably see extensive dry rot.
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Aug 18, 2012 18:11
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gtkor posted:There really is no reason to believe rates are dipping back down. There's no reason to believe they're going back up either though, is there?
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Aug 20, 2012 16:08
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There are always "reasons" to think anything. If you stake out a particular position it's very easy to then selectively find reasons that support your position. The issue is that based on a whole lot of very sound research it's clear that people are really bad at correctly forecasting the timing of stuff like this. So you can guess, but the smart choice is to make no assumptions. E.g., rates might go up soon, or they might not. Rates cant fall very much lower than where they are, because they're incredibly low already and there's an absolute bottom (0% = free money!) that we're not far off from. But yeah they can still fall a bit and maybe they will. Better to make plans based on your own personal situation, which you can predict with a lot more accuracy. E.g., get your ducks lined up, and when you are ready to refinance and will get a savings by doing so, seek the best deal you can get. Don't fret too much about whether you'd have gotten a better rate 4 months ago or in 4 months if you waited.
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Aug 20, 2012 20:06
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Yeah, I guess the difference between 2.75% and 3.00% is only about $20-25/mo, it'll just bug me if I missed out on a better deal because my credit union screwed up.
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Aug 21, 2012 00:01
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SlightlyMadman posted:There's no reason to believe they're going back up either though, is there? Bond market repriced last week and news out of Europe is not that bad. There literally is no reason to assume things are going back down given that during election cycles you see an increase in domestic confidence. Yes if Europe decides to go the other way, things might get back down to where they were two weeks ago. But if you didnt do it already, you missed the well probably. Its not a huge deal, it simply is still an incredible market to be doing something.
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Aug 21, 2012 02:29
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If anyone could help provide some insight about my situation, I would greatly appreciate it! We are in the process of a buying a short sale house, one that we made on offer for on March 1st. After negotiating the deal with the bank, and waiting A LOT, we finally have a closing date for this Wednesday (two days from now). The short sale was approved by the bank, and everything seemed to be going okay. Regarding the finances of the transaction, the lender was providing a credit of 3% of the purchase price, but we were told that this credit could not be greater than the final closing costs. The closing costs on the good faith estimate were roughly $10k (a lot property taxes and other items in a worst case scenario brought it up to 10k), but when we finally got the HUD-1 it showed closing costs much lower at about $4,500. This was great news, but the 3% credit we were getting from the lender is about $7,000. The HUD-1 reflected this credit, despite it being larger than closing costs. The HUD-1 was sent to, and approved by, the seller's bank. So to the problem: The underwriter submitted the HUD-1 for a correction, because the credits were larger than closing costs. My agent had a conversation with the seller's agent and the lender, and the seller's agent is saying that the seller's bank will not approve a new HUD-1. They won't accept corrections - we got one shot at it, and they screwed it up. That's what the seller's agent told my agent and the lender. Does this possibly make sense that the seller's bank would, seemingly arbitrarily, not accept a new HUD-1? That they'd rather blow up this whole deal over a HUD-1 that needed to be corrected? I can't think of a rational explanation for this, other than that the seller's agent doesn't know what he's talking about. If anyone has any insight into this, good news or bad news, it would be very helpful to hear it. We've put a lot of time and money into this house already, which is another story, so we're freaking out.
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Aug 21, 2012 03:15
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A few days after securing financing and thereby waiving the last contingency, we find out that the golf course that sits at the back of our (soon to be) house is looking at turning itself into condos. So much for quiet green space! DO NEVER BUY!
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Aug 22, 2012 20:27
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It's been about 4 months since we started looking at floor plans on the internet and talking to potential builders. So far I've spent about $8,000 and no actual physical labor has taken place.. until today!. Gentlemen... behold! A water meter!  (This cost me $4,000 and I can't even use it yet.) On the bright side (Literally)  This is the view in my future back yard nearly every evening and it's so drat quiet out here. I'm hoping to be sipping a beer right here on my back porch in 4 months.
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Aug 23, 2012 02:55
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DO NEVER BUY After living in my new place for 2 months I find out that I'm going to be out of the country for a year for work. Since I have an FHA loan I'm unable to rent for another 10 months. Are there any exceptions to this rule? I've been searching online, but haven't turned up anything about rental exceptions. Due to being in a managed condo building it would be nearly impossible to try and rent on the side to a friend without being noticed so that's not an option at all.
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Aug 23, 2012 20:28
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Aredna posted:DO NEVER BUY House sitters don't count as renters. No lease, no rent. Of course if your friend trashes it you're hosed.
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Aug 23, 2012 23:55
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Errant Gin Monks posted:House sitters don't count as renters. No lease, no rent. Of course if your friend trashes it you're hosed. And, you know, what's a little cash between bros here and there?
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Aug 24, 2012 00:24
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So I'm just starting to think seriously about buying, but I'm still AT LEAST a year out, probably more like two or three, before actually getting the process truly started. Obviously a lot can/will change in that period of time, and I don't really have any specific questions but I guess I just kind of want some vague opinions on my situation/thinking. If it is something I want to get serious about, it's something I would like to start planning/preparing/saving for now. I live in Seattle (the central urban part, not the 'burbs) and I really don't foresee moving away anytime soon. But the rental market has gotten absolutely stupid here. Year over year rents have been going up across the board $100-200 minimum for the past several years. It's at the point now where I'm paying $1400/mo for a ~500 sqft 1-bedroom place. It's reasonably nice, but not "luxury", though it is top floor with a good sized deck and city view, and that includes garage parking and w/s/g, but it's still just getting to the point where it's getting really hard to ignore that the same $1400/mo would go a long long ways towards a mortgage payment on a nicer place. I really enjoy urban living and have been renting condos for several years now so I'm pretty well acquainted with what the day-to-day living in a condo is like, but obviously have no experience with actually owning one. I'm a little bit leery of buying a condo due to all the HOA crap, possibility of assessments, being stuck with a hard-to-sell unit, etc. but there's just no possible way I could afford to buy even a small, nice house in the centralish part of the city (realistically, 450k+ for something that isn't a total fixer-upper) anytime soon, whereas nice/luxury 1-bed condos are in the 200-300k range from listings/sales that I've been scanning a bit. Someday I'd probably like to own a house, but for the foreseeable future the central urban/dense location and relatively low maintenance aspect of a condo is appealing (it's certainly one of the big enjoyment factors of renting). For a rough idea of my financial position, I'm 25, single, excellent credit with a pretty good/stable job making ~95k/yr and my only outstanding longterm debt is the ~9k left on my car note (3.5%). I recently paid off all my student loans and not counting retirement accounts have about 30-35k in savings/investments. Ideally I'd like to put that magical 20% down on anything I buy, but not at the expense of wiping out all of my non-retirement savings. I guess what I'd like to know is peoples' general feeling on the condo market in high-demand urban areas. I've been looking through recent sales of condos in the neighborhoods I'd be interested in and there's been A LOT of sales and most of the nice buildings have pretty high occupancy rates. Would I be totally stupid for buying into a condo, assuming I found one with a fiscally-sound HOA and good construction? Should I just keep renting, even at ridiculous prices, until I could realistically buy a house in 5-10 years? I would be viewing a purchase as a home, not necessarily an investment, but I don't really want to be stuck with a depreciating, unsellable boat anchor 10 years down the line either. Thoughts? Guinness fucked around with this message at 00:53 on Aug 24, 2012 |
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Aug 24, 2012 00:43
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Shipon posted:And, you know, what's a little cash between bros here and there? Or, in other words, defrauding a federal agency. I think the best option is probably to attempt to refinance into a conventional loan, one which would allow you to rent. Failing that, you may have to face whatever penalties the FHA imposes, which might be financially worth it to you if the alternative is having to sell or not taking that job.
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Aug 24, 2012 01:03
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Guinness posted:Thoughts? I hate condos. That said, I think that, financially, you're in good shape to buy in a year, assuming your income is stable. I think the biggest problems with the idea are your age, and the fact that you're single. Typically the time horizon for not getting totally hosed when you sell is to occupy your home for at least 8 years, and 10+ is better. Given that kind of time frame, what do you think the odds are that you might meet someone you want to live with and/or marry, might decide to have kids, or might decide to have a significant change of job or career? It could really suck facing the need to sell in 4 years because your new wife's job is outside the city and there's not really room in your condo for the kid that's on the way, and/or the school district sucks, and/or you get a good job offer in Spokane or Portland or something. Or maybe you decide to go back to school for an advanced degree, and you get into Columbia University? It may be that it's worth it to you to preserve your savings and keep paying high rent in order to leave your options for major life changes open for a few more years. Only you can really assess that. e. woops didn't mean to double-post, sorry.
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Aug 24, 2012 01:09
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Guinness posted:Thoughts? Your situation is pretty similar to mine when I bought my condo, low/no debt, solid income for my age, and a chunk of non-retirement savings. I bought a sweet 1 bedroom condo in a fun area of the city with a strong rental market. I was basically paying the same for a mortgage that I would for a rental but was living in a nicer space for what I was paying. It was supposed to be my bachelor pad as I had just gotten out of a long term relationship and was planning on working at the same place for 5ish years. A few things to think about : I signed my contract and ended up meeting a girl 1 month later (oops). About a year later she moved in with me. Luckily we are both OK with cohabiting a 600 sq ft place. I highly recommend you have enough space for a significant other to move in. The rental market in my area is great. Most units in my complex are owner occupied but any that get rented out are snatched up within a couple weeks. I've had interviews in other cities and would still be able to afford to hold onto my condo at the rental rates. Having a good HOA/property management will make this infinitely easier because I wouldn't need to shell out extra to a rental management company. If you are leery about being able to sell, make sure you will be able to easily rent it out with low effort. Carefully assess the property as a whole and find out if there are any special assessments being discussed by the HOA. A few months after I moved in I found out that the community wanted to replace wooden stairs with composite and I ended up having to shell out $1500 for that. I would avoid a condo with an elevator unless complete replacement has been considered and the HOA is sitting on the cash to do it. My condo has enough problems keeping the loving gated parking working so I can't imagine how much an elevator would cost. Unlike Leperflesh, I like condos because I'm lazy and would rather pay someone else to take care of mundane poo poo than spend a few hours a weekend on house repair/chores.
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Aug 24, 2012 19:11
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resident posted:Unlike Leperflesh, I like condos because I'm lazy and would rather pay someone else to take care of mundane poo poo than spend a few hours a weekend on house repair/chores. There are reasons to prefer a condo to a house, but this isn't one of them. In a condo, your condo fees are paying someone to do this poo poo. If you buy a house, you can still pay money to have someone do this poo poo. There are gardening/lanscaping companies and there are housecleaning companies and of course there are plenty of contractors to do home repairs too. Obviously if you want to do lots of gardening and maybe have three cars you're working on, a house beats a condo hands-down, but if you're a hands-off kind of person that doesn't mean that you necessarily have to get a condo.
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Aug 24, 2012 19:31
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Leperflesh posted:There are reasons to prefer a condo to a house, but this isn't one of them. The HOA property manager is a single point of contact for all of these tasks so that eliminates me having to hunt around for qualified, competent, and cost efficient people to do them. That is how the condo saves me time and effort. I didn't mean to imply that that was why you didn't like condos, just that I do prefer condos as opposed to you. I definitely agree that hobbies requiring space are pretty much out with a condo. I do know people that split garage time and tools for auto work though. The more important aspect of condo living for me that I should have mentioned is the social aspect. You can have fun neighbors in a house that you like to hang out with, but at age 25 you will be much less likely to be living near your peers in a house. The majority of the people living in my complex are mid 20s to mid 30s. I've made about a dozen very good friends in my condo and always have someone to hang out with, be it a weekday or weekend.
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Aug 24, 2012 19:48
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Guinness posted:So I'm just starting to think seriously about buying, but I'm still AT LEAST a year out, probably more like two or three, before actually getting the process truly started. Obviously a lot can/will change in that period of time, and I don't really have any specific questions but I guess I just kind of want some vague opinions on my situation/thinking. If it is something I want to get serious about, it's something I would like to start planning/preparing/saving for now. Ha! I'm in the exact same age/area situation as you. Though I've been thinking about a 2 bedroom condo instead so I could have a guest room as well. Rental prices are absurd here in seattle.
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Aug 25, 2012 04:01
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There is a house across the street that is abandoned, and from what I can tell it is a foreclosure situation or pre-forclosure. It is not being maintained by the mortgage-or, although for a least a month there has been a sign on it saying that they have been notified the the building is abandoned and intend to maintain it. My wife and I would be interested in buying it at the right price. Can we just call up the mortgage company and ask how much they want for it or make an offer? Should we ask a realtor to do this for us?
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Aug 28, 2012 00:34
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therobit posted:There is a house across the street that is abandoned, and from what I can tell it is a foreclosure situation or pre-forclosure. It is not being maintained by the mortgage-or, although for a least a month there has been a sign on it saying that they have been notified the the building is abandoned and intend to maintain it. My wife and I would be interested in buying it at the right price. Can we just call up the mortgage company and ask how much they want for it or make an offer? Should we ask a realtor to do this for us? You can definitely call the seller's agent and find out what the asking price is. You should almost certainly get a realtor. It is free (to you) (assuming you're in the US), and the realtor can help you through the process. You should definitely also go look at other houses. Unless you've looked at lots and lots of empty houses before, you have no real skill at assessing a property to decide if it's right for you or not. After you've seen a dozen places you start to get a better idea of what kind of layout, features, and quality considerations are actually important to you. Also you can begin to get an idea of what is a reasonable price. But before you do any of that, you should certainly take a hard look at your finances, your life situation, and your long-term plans for the future. Don't buy a house on impulse.
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Aug 28, 2012 00:48
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Leperflesh posted:You can definitely call the seller's agent and find out what the asking price is. I guess I wasn't very clear. The house is abandoned and in some stage of the foreclosure process but does not appear to be listed yet. We know about how much we can get approved for (I'm a banker and have submitted the required documents to a mortgage broker who gave us a number). We have an idea about what it would take to fix it up ( I have seen the inside). Of course I would want to get an inspection and have someone who knows more about construction look at it with me. We have a place to live while we fix up any potential property as well, and it is literally across the street from this house. We have already lived in the area for years and my wife grew up in the neighborhood. My question is really more around figuring out how to approach the bank that owns the property since it doesn't seem to be listed yet. Or for that matter find out which bank owns it.
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Aug 28, 2012 16:53
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Locking on my re-fi today. Rates are lowest they've been in 5 days and no guarantee that Jackson Hole is going to change things. I originally bought for 612k in 12/2011 at 4.325%. I only put 15% down because I wanted to keep some reserves (family member with cancer and medicare is sketchy). Family member has since passed and I need to dump the $340/month in PMI. I hope my appraisal comes in higher (as is, I need to feed around $20k to get to 80% LTV. Each .125% is going to take me around 52 months to recoup (before factoring in tax credit for prepaid interest - more like 38 months when you factor in taxes) so I think I'm going to buy it all the way down to 3.625% Anyone else been waiting for the right time to lock? Even if today isn't rock bottom it seems to be a decent enough dip to take the plunge. Also, does anyone here have a solid understanding of why the 1/8 point to drop me from 4.125 to 4 is so much more expensive than the 3/8 between 4 and 3.625? I think it probably has to do with the fact that it's prepaid interest and a tax deduction but I'm not sure.
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Aug 28, 2012 19:24
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It's totally dependent on the rebate for placing the loan. A wholesale mortgage broker makes money 2 ways. Charging you fees and upfront points, and making a point/percentage based commission on the back end for placing the loan. Looking at a random rate sheet for today a 4.125% loan is paying 3.1% commission, 4.0% 2.2, 3.875% 1.3, and 3.75 0.5%. So if your mortgage broker is making less commission on the backend, they charge you more in up front points/fees to make up the difference. The sheet I'm looking at right now is showing 3.625% as costing the broker 0.17% to place, so they'll make no commission on that loan.
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Aug 28, 2012 20:05
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Interesting - thanks. I really like/trust my mortgage broker but it's good to have better color on how he's getting paid. It's interesting to me that moving from 4.125 to 4 actually costs me so much more ($3500) than dropping from 4-3.875, 3.875-3.75, and 3.75-3.625 which all cost me between $1800-$2000 per hop. My "base" is 4% with a $380 credit if that makes any difference. Each "hop" results in the same reduction in monthly p&i of about $35 but for some reason the first hop is way more expensive. The rusty math geek in my head tells me I should either take the $3800 loan credit and run with 4.125 or go full bore and buy it all the way down to take the prepaid tax credit. It feels like I'm missing a crucial piece of logic though.
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Aug 28, 2012 20:16
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You are missing a crucial piece of logic...the brokers compensation. It would be so much easier for the broker to say... I need 1.5 points on your loan to make a reasonable profit. (Salary, overhead, taxes, etc.) Those points can come from anywhere. If you want to take a higher rate, I'll take it on the back end. If you want the lowest rate you have to pay me cash up front to buy down the rate. Either way I need to make 9K on this deal to turn a profit. Big profits are obviously easier on more expensive mortgages. 3 points on a 100K house is nothing compared to 3 points on a 600K house. The problem is mortgage brokers tend to be greedy. There's no education requirement really, and the money can be really good so Your refinancing will get rid of PMI right?
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Aug 28, 2012 21:01
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Yep - that's the big reason I'm doing this now (also the rates are nice). Even if I don't get the "best" rate I can get out of PMI without waiting for January. There's some rule that I can't get out of PMI until I've paid 12 months worth - I'd have to pay down to 80% LTV in January and then apply to have PMI removed. This way I can just re-fi with 80% LTV from the beginning and dump PMI right away. Just the PMI savings over the last 4 months of 2012 will account for about 1/3 of my closing costs.
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Aug 28, 2012 21:11
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Spamtron7000 posted:Yep - that's the big reason I'm doing this now (also the rates are nice). Even if I don't get the "best" rate I can get out of PMI without waiting for January. There's some rule that I can't get out of PMI until I've paid 12 months worth - I'd have to pay down to 80% LTV in January and then apply to have PMI removed. This way I can just re-fi with 80% LTV from the beginning and dump PMI right away. Just the PMI savings over the last 4 months of 2012 will account for about 1/3 of my closing costs. Are you sure this isn't a prepayment penalty they are going to make you pay the prorated PMI off of?
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Aug 29, 2012 02:19
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