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Baruch Obamawitz posted:We've already got the title company in the ratified contract. Right now it's just the loan to figure out. Here's what I got: Option 1 has a ridiculously high appraisal fee - is there something incredibly weird/unique about the property or are you having to have 2 appraisals done for some reason?
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Apr 5, 2013 06:06
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Captain Windex posted:Option 1 has a ridiculously high appraisal fee - is there something incredibly weird/unique about the property or are you having to have 2 appraisals done for some reason? 2 appraisals. It's a flip and so he's under the impression that the underwriter will require it. e: 1st offer is from my realtor's suggested lender who did the pre-approval and is local. 2nd is from some internet lender
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Apr 5, 2013 12:59
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Baruch Obamawitz posted:2 appraisals. It's a flip and so he's under the impression that the underwriter will require it. That lender probably has a flip overlay then, it looks like you're going conventional since it's 20% down and Fannie/Freddie don't have automatic 2nd appraisal requirements on flips like FHA does.
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Apr 5, 2013 15:13
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I'd like to get some opinions about something, if you all don't mind. Some info about me and my partner: Grossed ~200k last year, should probably do about 190k this year (Steady base of 175k, 125k me and 50k her) FICO ~715 for me, high 600s for her Total monthly debt payments: ~2300 (so ~16% DTI) 30 years old Currently have a lease through the middle of next year at $1400 a month Have access to about $10k in cash right now We found an amazing house not far from us. It's a huge 100 year old colonial that sold for an insanely high price during the bubble and now is bank owned and asking $139k. It's in surprisingly good condition, just dated and needs a lot of cosmetic updating. We don't want to flip it, we want to buy it and take our time remodeling it to ultimately move in next year. This is one of those dream homes for us, 3200sqft, 3 stories, 5 bedrooms of brick goodness. Obviously we could easily cover the mortgage, taxes (~3k a year), insurance, and utilities in addition to our current lease, but we don't want to significantly deplete our cash on hand. So the current asking is $139k, and tax assessment is $349k. The average price for a house like this in the neighborhood is ~300k in much better condition, so I would imagine that after some cleaning up, painting, yard work, etc we would have some solid equity. We don't want to do more than pay for closing costs, and maybe a few thousand down. Given that, is this worth pursuing? Does this look like something an underwriter would go for? Edit: Would potentially buy out of our lease early, or at the very least double our payments once the lease was over. Jealous Cow fucked around with this message at 17:53 on Apr 5, 2013 |
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Apr 5, 2013 17:40
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I'm always utterly shocked by how little to no savings people with incomes I'd consider "rich" have. Don't consider anything until you get it super inspected. A house that old could have hundreds of thousands of dollars worth of fun surprises waiting for you. It might be super cheap for a reason.
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Apr 5, 2013 17:43
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Baronjutter posted:I'm always utterly shocked by how little to no savings people with incomes I'd consider "rich" have. I know, it bothers me to, but at this point we have our debt very low and paid off a lot of stuff we accumulated in our early 20s. Our cash reserves will start growing pretty quickly. 3 years ago she was making 20k and I was at 80k, 5 years ago our combined income was less than 60k, we also moved a lot for jobs which is very expensive. Edit: We lived in two different states for 3 years. I was in NYC for a job and that is a very expensive place to live.
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Apr 5, 2013 17:49
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Baronjutter posted:I'm always utterly shocked by how little to no savings people with incomes I'd consider "rich" have. Eh he's only 30 and it's possible (likely, in fact) that he hasn't been pulling in that amount of cash for very long. If he's been paying off large amounts of student loans rather than hoarding cash it might make sense. Also, there's more types of savings than just cash reserves. Additionally, most of the kinds of places where you can earn 100k+ before 30 are pretty drat expensive places to live. I do pretty well - though not quite as well as this guy - and I only have about 10k of cash on hand as my cash cushion/emergency fund. I spent the first couple years of making a good salary obliterating my student loans rather than saving it all. It may not have been the objectively best financial decision, but paying off a mountain of 6.6% loans was certainly not a bad decision and it was a really great mental/motivational victory.
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Apr 5, 2013 17:59
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Guinness posted:Eh he's only 30 and it's possible (likely, in fact) that he hasn't been pulling in that amount of cash for very long. If he's been paying off large amounts of student loans rather than hoarding cash it might make sense. Also, there's more types of savings than just cash reserves. Additionally, most of the kinds of places where you can earn 100k+ before 30 are pretty drat expensive places to live. Basically this.
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Apr 5, 2013 18:12
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Right, I always forget about student loans and such. Education in the US is hosed. We only make about 60k combined in a good year and are looking at 250k places... but housing is hosed here. But with no student loans we've got about 60k in savings after 3 years of saving. Condo prices keep going down slightly and everyone says the bubble is going to pop soon so we keep saving and hoping prices keep going down. By the time we buy maybe we'll be paying cash haha.
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Apr 5, 2013 18:30
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My broker is quoting me 3.5% for a $148,000 loan, 30 year fixed, on a $187,000 house. Can I do better?
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Apr 5, 2013 18:33
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Insane Totoro posted:My broker is quoting me 3.5% for a $148,000 loan, 30 year fixed, on a $187,000 house. What does your credit look like? How many points are you paying? What are the origination fees? (probably not)
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Apr 5, 2013 18:40
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Robo-Pope posted:What does your credit look like? How many points are you paying? What are the origination fees? Credit score is 767. No points. $795 in fees.
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Apr 5, 2013 18:56
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Jealous Cow posted:Basically this. I get the living in an expensive place thing and I'm not jumping down your throat but $2300/mo in debt payments seems pretty high not even taking into account a mortgage. At your income level you should be able to wipe out most debt and then save up a nice downpayment for a house in a year or two. Are you sure you're done moving, you've done a lot of it over the last couple of years?
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Apr 5, 2013 18:59
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That's... a lot of debt payments already. Are you sure you want the expense and risk factors of a house when you've not really managed to put together much in the way of savings as-is yet? To be fair, your income is quite good. If you're going to pursue a house like this, make sure to have a very knowledgable Realtor and inspector to get the most accurate idea of the hidden costs because there are going to be mad hidden costs.
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Apr 5, 2013 19:05
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I just put in an above list offer on a below market value house yesterday; after three days on the market the winning offer was higher than mine and not contingent on an inspection. I do regret not putting in a (slightly) higher offer, but I can't imagine buying without an inspection.
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Apr 5, 2013 20:04
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It blows me away that offers without inspection contingencies have become A Thing now. It's pretty much become SOP in the Seattle area for a winning bid to be list price + 5% in all cash and no contingencies. And many of these homes are near 100 years old with god knows how many lurking issues. Who the gently caress are these people buying century-old, $500k+ homes without any inspections AND in all cash? How the hell is an ordinary person actually looking to buy a first house to live in supposed to compete? Edit: And apparently "cover letters" for offers are becoming A Thing now, too. gently caress everything about that. Guinness fucked around with this message at 20:20 on Apr 5, 2013 |
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Apr 5, 2013 20:13
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Guinness posted:How the hell is an ordinary person actually looking to buy a first house to live in supposed to compete? Us ordinary people buying starter houses end up living out in the bumfuck areas and buy $50k century-old crappy small houses and put $20k+ in renovations into it, because that's literally all we can afford. I could move closer to "civilization", which has restaurants and a Wegmans and a Wal-mart and is actually useful, a 10 minute drive, and pay $130k to start with for an equivalent crappy small house, or move closer to the city (a 20 minute drive) and pay $250k+ for the same crappy small house... The ones I see that are anywhere near a sane place to live and are less than 100k are all pre-foreclosure or foreclosures. Oh, you want a decent house in decent condition in a decent area? Got a half mil just to start with? They're called starter homes for a reason, and they're not to be found inside what we would call "civilized" areas. 
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Apr 5, 2013 20:40
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Baronjutter posted:I'm always utterly shocked by how little to no savings people with incomes I'd consider "rich" have. As people's income goes up, they feel they deserve more nice things. I wish I could find this, I think i saw it on Reddit's /r/frugal, but it was an article in some rich people magazine about how a family of 5 making $250K was 'barely getting buy', and it breaks down their expenses to include things like "5 Smart Phone - $5,400 year". Meanwhile I'm getting by using an iPod Touch and using a free wireless 4G hotspot from Freedompop to get by without having a smart phone for as long as I can. Edit: Not the one mentioned, but here is an equally as ridiculous article about it http://www.freemoneyfinance.com/2011/04/is-250000-really-not-enough-to-live-on.html
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Apr 5, 2013 20:41
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That article is nuts because those people spend ridiculous amounts of money on really dumb things, like $500/mo on parking and $425/mo on cleaning. However, it seems like most people I know that make a decent amount ($150-$200k) are in rough spots because their home is too expensive. $3000/mo mortgage is painful.
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Apr 5, 2013 20:50
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Astro7x posted:As people's income goes up, they feel they deserve more nice things. I wish I could find this, I think i saw it on Reddit's /r/frugal, but it was an article in some rich people magazine about how a family of 5 making $250K was 'barely getting buy', and it breaks down their expenses to include things like "5 Smart Phone - $5,400 year". Meanwhile I'm getting by using an iPod Touch and using a free wireless 4G hotspot from Freedompop to get by without having a smart phone for as long as I can. Good article, but this line made me want to punch the author in the face: "Student loans are $6,000 per year. If both parents earn about the same amount, it looks like the loans were well worth the cost. If one makes the lion's share of the income, the lower-earner didn't do a great job of matching college debt with potential post-college income." Oh yes, I'm sorry that 17-year-old me with literally everyone pressuring me to get a college degree decided to go to college. How ever can I live myself and my terrible financial decision that is destroying my family.
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Apr 5, 2013 20:52
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Astro7x posted:As people's income goes up, they feel they deserve more nice things. I wish I could find this, I think i saw it on Reddit's /r/frugal, but it was an article in some rich people magazine about how a family of 5 making $250K was 'barely getting buy', and it breaks down their expenses to include things like "5 Smart Phone - $5,400 year". Meanwhile I'm getting by using an iPod Touch and using a free wireless 4G hotspot from Freedompop to get by without having a smart phone for as long as I can. It looks like all these examples are including ~50K per year in future savings for retirement and college though. Capping out all 401ks and IRAs available is hardly "barely getting by".
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Apr 5, 2013 20:57
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Robo-Pope posted:Good article, but this line made me want to punch the author in the face: Sorry? But spending $100k to get an art degree is not a wise financial decision, while spending $150k to get a degree in aircraft engineering might be a fantastic decision. The article is absolutely correct that people who made the former decision "didn't do a great job". It's not saying you're a worthless human being, it's pointing out that the cost of a degree is not automatically coupled with potential earnings, so people have to make those decisions themselves. My wife thinks her MFA was worth the $50k she borrowed to get it, even though she's been unable to land a teaching position (the last five years have been brutal for art teachers). "Worth it" from a non-financial perspective, anyway. Financially? It wasn't a great move and it's not wrong to point that out.
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Apr 5, 2013 21:05
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This thread always makes me feel so poor. So many people with 6 figure incomes yet living in places with houses under 500k. Oddly enough on the savings angle most of my friends often have people here beat when they announce how much they have for a down-payment. I don't know a single person making more than 50k a year yet just about everyone I know has 10-20k or more squirreled away. I guess when you're poorer you have a better idea how important savings are. A rich person can just downsize their house or sell off some of their gold plated iphone cases if they were out of work for too long, while we'd be out on the street. And yeah I remember reading some article "proving" how the rich and upper middle class were over-taxed and they used some rich 200k a year family of 5 as an example and showed how stressed and barely getting by they were. They were going into debt and need a tax break!!! With the payments on their million+ dollar house, 3 luxury cars, boat, house cleaning, pool cleaning and upkeep, gardener, eating out (because who has time to cook these days??), and their kids private school and ridiculously expensive weekly activities, and expensive vacations, they were going into debt. Thanks Obama!!! Their heating/electric bill was higher than what I could even get approved of for mortgage payments too, because their giant stupid McMansion was made out of paper or something.
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Apr 5, 2013 21:08
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Leperflesh posted:Sorry? But spending $100k to get an art degree is not a wise financial decision, while spending $150k to get a degree in aircraft engineering might be a fantastic decision. The article is absolutely correct that people who made the former decision "didn't do a great job". It's not saying you're a worthless human being, it's pointing out that the cost of a degree is not automatically coupled with potential earnings, so people have to make those decisions themselves. I have a friend who got an undergrad degree in aero engineering from a top 5 engineering school, couldn't find a job, got a masters in aero, then found a job starting him at 30k. After 5 years he's up to 50k salary. So yeah, this is a derail, but good god it's annoying to see people think an engineering degree is a magic wand.
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Apr 5, 2013 22:08
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Guinness posted:It blows me away that offers without inspection contingencies have become A Thing now. It's pretty much become SOP in the Seattle area for a winning bid to be list price + 5% in all cash and no contingencies. And many of these homes are near 100 years old with god knows how many lurking issues. Who the gently caress are these people buying century-old, $500k+ homes without any inspections AND in all cash? How the hell is an ordinary person actually looking to buy a first house to live in supposed to compete? Cover letters have been A Thing for quite some time in that they're good for convincing that little old lady who loves her house that it is going to a Good Home and that you aren't trying to screw her over. Consider how emotional people get about their homes, then consider how nice it is to have someone write you a letter about how not only did they do their homework and this is why their offer is at this specific amount, but This is what they are Planning to Do with the house and How Great it will be For My Kids To Grow Up In. It makes a big difference for some people. I'm especially careful to do this if I've actually met with the owner at some point, and I want to remind them who I am and what we talked about when my client and I were looking at the house. It's good for establishing a personal connection and reminding a seller why you/your client should get the house over someone else who is just a faceless, heartless buyer.
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Apr 5, 2013 22:21
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Baronjutter posted:Oddly enough on the savings angle most of my friends often have people here beat when they announce how much they have for a down-payment. I don't know a single person making more than 50k a year yet just about everyone I know has 10-20k or more squirreled away. I guess when you're poorer you have a better idea how important savings are. A rich person can just downsize their house or sell off some of their gold plated iphone cases if they were out of work for too long, while we'd be out on the street.  "I'm told a bank is where poor people keep money that isn't properly invested." No but seriously, if you've got more than about 10k cash lying around it's just losing real value. What is surprising to me is when people have more than just 10-15k in cash on hand unless they're looking to close on a house in the near future.
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Apr 5, 2013 22:27
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I Love You! posted:Cover letters have been A Thing for quite some time in that they're good for convincing that little old lady who loves her house that it is going to a Good Home and that you aren't trying to screw her over. Consider how emotional people get about their homes, then consider how nice it is to have someone write you a letter about how not only did they do their homework and this is why their offer is at this specific amount, but This is what they are Planning to Do with the house and How Great it will be For My Kids To Grow Up In. Yes, this. I'm having to sell my childhood home that my parents built when I was only 4 and my ears perked up each time my agent told me about the couple/family who were sending in offers. I mean, when it comes down to it you have to go by the strength of each offer but if it's a toss up then I will lean toward the one who is interested in reviving my sad little flower beds. Selling your home is much more emotional than bailing on an apartment when your lease is up; much more than I would have expected. :-/
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Apr 5, 2013 22:47
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Leperflesh posted:Sorry? But spending $100k to get an art degree is not a wise financial decision, while spending $150k to get a degree in aircraft engineering might be a fantastic decision. The article is absolutely correct that people who made the former decision "didn't do a great job". It's not saying you're a worthless human being, it's pointing out that the cost of a degree is not automatically coupled with potential earnings, so people have to make those decisions themselves.
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Apr 5, 2013 22:53
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Guinness posted:
It's called an emergency fund. A 6 month emergency fund is easily more than 15k
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Apr 5, 2013 23:17
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Guinness posted:No but seriously, if you've got more than about 10k cash lying around it's just losing real value. What is surprising to me is when people have more than just 10-15k in cash on hand unless they're looking to close on a house in the near future. It's almost like different people don't have different cash needs at different points in time! This is kind of a limited mindset, dude
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Apr 5, 2013 23:24
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Dik Hz posted:Aerospace Engineering is a pretty terrible example of a worth-it degree currently. For government funded companies yes, but commercial aircraft companies are posting record sales.
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Apr 5, 2013 23:43
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I Love You! posted:Consider how emotional people get about their homes... Oh god, this. Our attorney sent a letter to the seller with a few requests. I think their lawyer did a horrible job by directly quoting the seller on a few concerns. For example... In response to requesting a lock be put on a window on the first floor so that the home is secure between now and closing, the owner says "the window is virtually impossible to open in its current state, a lock is not necessary!" We'll... We could open the window during inspection. There was a screen on the other side of it. Looks like that drat screen is going to make it virtually impossible to open the window. Go put a two dollar lock on your home for crying out loud, every safety concern we had was pretty much countered with "it has not been an issue as long as I had the house". Granted, they are minor things, but dude was getting really defensive over it.
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Apr 6, 2013 00:22
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Dik Hz posted:Aerospace Engineering is a pretty terrible example of a worth-it degree currently. Yeah I just tried to pick something more practical than an art degree or a history degree or whatever. Let's pretend I said a degree in advertising instead, or whatever.
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Apr 6, 2013 00:43
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Sorry for somehow derailing the thread.
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Apr 6, 2013 01:17
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slap me silly posted:Unfortunately the easiest numbers to get (APR and total cost over 30 years) are kind of useless for comparing loans, because you will most likely not have the loan for 30 years. I personally know the owner of Amerisave and used to work in same building. They rely on the internet shopper. The guy or girl that rather get 15 quotes from websites then talk to anyone. Their gimmick is to rely on technology to structure the loan and to pay young kids with no experience to process the loan. If your situation falls into an easily defined set, they can be good if ultimately more expensive option. Sadly, that often won't be the best solution for most people. Maybe you qualify for down payment assistance? Maybe you are eligible for a special loan because you are a veteran, firefighter, cop, teacher, nurse, disabled, or low income? Maybe the property is in a rural location and qualifies for USDA loans? Maybe the property is in a special loan tract in a city? Maybe you can't find the perfect house and could really use a loan that gives you extra cash to renovate it? A major bank can do all that and show you that you have that option. Amerisave will give you one hell of a flashy shopping experience online if your looking for a standard loan. Owner's sister is slamming hot though and smart as whip.
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Apr 6, 2013 04:45
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Insane Totoro posted:Credit score is 767. No points. $795 in fees. I really need to make a guide to understanding fees, GFE, etc.
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Apr 6, 2013 04:50
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Guinness posted:No but seriously, if you've got more than about 10k cash lying around it's just losing real value. What is surprising to me is when people have more than just 10-15k in cash on hand unless they're looking to close on a house in the near future. Oh god I have a lotttt more than 10k laying around in a savings account. The thing is I don't really trust investments that much. I've had 20k put away in some sort of fund for the last 3 years and after that It's down about $100, while my savings is making reasonable tiny interest. My parents lost a bunch on their "safe conservative" fund. I honestly just don't have any trust for the financial class, they seem to just take poor people's money, lose a bunch of it, then give them selves huge salaries for their service to society. I'd rather not support those crooks and I don't have the financial education to "properly" play the market. Hell I'd have it all tied up in gold and canned food if I had more space under my bed.
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Apr 6, 2013 08:11
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....aaand you have a different kind of limited perspective. The way you are comparing your "fund" and your savings account and gold makes absolutely no sense. I suggest you do some reading so you can understand various kinds of risk better and become less fearful about money. Ooh, sorry, thought this was the newbie thread for a second there! The reading I suggest is in the OP of the newbie thread 
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Apr 6, 2013 16:14
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Baronjutter posted:Oh god I have a lotttt more than 10k laying around in a savings account. The thing is I don't really trust investments that much. I've had 20k put away in some sort of fund for the last 3 years and after that It's down about $100, while my savings is making reasonable tiny interest. My parents lost a bunch on their "safe conservative" fund. I honestly just don't have any trust for the financial class, they seem to just take poor people's money, lose a bunch of it, then give them selves huge salaries for their service to society. I'd rather not support those crooks and I don't have the financial education to "properly" play the market. Hell I'd have it all tied up in gold and canned food if I had more space under my bed. Hey I totally agree with this guy, maybe I just don't understand money at all though. Actually it is very fair to say that I don't understand any sort of investments other than putting money straight into my own bank account. I'd rather have money in a savings account and earn my $10 bucks a month in interest, than invest it in some... something where my money could just poof, be gone because some dude made random hand gestures and pushed a button on Wall Street that day.
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Apr 6, 2013 17:41
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Read the Long term investment and retirement thread, please. Even if you are certain you would never trust any investment. There are options which will help protect your savings from the ravages of inflation, but which are extremely safe. It's good to understand that your wealth is held in the form of a currency, and currencies themselves are not perfectly safe. There is no way to hold onto your wealth that is perfectly safe. So, understand what the different levels of risk of various options are... or be ignorant and let fate decide what happens to your money. Just ferexample: razz posted:something where my money could just poof, be gone because some dude made random hand gestures and pushed a button on Wall Street that day. There are options which do not involve Wall Street. There are options which are backed by the full faith and credit of the United States of America (just as your physical dollar bills are). At the very least, you guys ought to understand the principle of diversity, and how that principle acts to protect and secure your wealth better. Having all your eggs in one basket increases your risk without increasing your potential earnings; and yes, a savings account counts as one basket.
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Apr 6, 2013 18:43
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