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Interesting, I didn't know VA loans were cheaper. Points wise, it's pretty easy to quickly figure out the opportunity cost vs. interest costs of not paying points, then it's just a matter of determining the duration of ownership. At the simplest level, $6000 invested has a minimum income generating value of roughly $240/year. If the difference in interest is more than that per year, it makes sense to pay the points.
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Jul 26, 2017 20:02
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I'm looking to buy in the Seattle area, and it looks like I just barely qualify to get a house through a community land trust called Homestead CLT. Anyone have any experience with those? Anything I should beware of other than the obvious (land use fees, reduced equity increase, etc.)?
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Jul 28, 2017 02:47
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So Ive goy my contract with the seller, have my mortgage locked in, and now I'm looking at insurance. Every place is asking all sorts of questions that I don't have the answer to. Do I have a water leak detection system. What % of the floors are what material. How many rooms have what kind of molding. My plan is to make a master list of what every place is asking and take it with me to the inspection on Tuesday. I assume the inspector will be able to answer most of these. The one item that I really don't know about is probably the biggest one, the home's replacement value. Is this something I'm supposed to estimate myself? The lender is going to do an appraisal, but those aren't the same thing. I know nothing about home building so I tried an online calculator and it estimated 650k, which for the home I'm paying 200k for just doesn't sound right...
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Jul 28, 2017 03:12
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Xenoborg posted:So Ive goy my contract with the seller, have my mortgage locked in, and now I'm looking at insurance. Every place is asking all sorts of questions that I don't have the answer to. Do I have a water leak detection system. What % of the floors are what material. How many rooms have what kind of molding. Are there not good pictures on Zillow or Redfin? Ask them to look at it there. Your realtor should be helping you out here as well. Rough estimates are fine. The insurance companies should be using estimation software which makes various assumptions. Do you have high end features, mid-range, or is it literally 100% ikea including stealing the drywall? Is the whole house carpet except the bathrooms? Take their number and gross it up a little bit. Replacement cost is CHEAP to buy.
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Jul 28, 2017 04:23
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H110Hawk posted:Are there not good pictures on Zillow or Redfin? Ask them to look at it there. Your realtor should be helping you out here as well. Rough estimates are fine. The insurance companies should be using estimation software which makes various assumptions. Do you have high end features, mid-range, or is it literally 100% ikea including stealing the drywall? Is the whole house carpet except the bathrooms? I tried 4 insurnace companies so far, and filling out thier questionaires I got replacement costs anwhere from 180k to 300k. It seemed from the ones that showed a price breakdown that the premium due to replacement cost was 85% or more of the total.
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Jul 28, 2017 04:47
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My offer on a 2-family was accepted and I was due to close on Aug 31st, but now a few days in the sellers want to extend the closing by 7 days to have more time to clean the first floor after the renters leave on the 31st. My agent was saying that's obviously advantageous if we hit any snags with the VA loan, but my lender says my rate lock (3.375) would expire and I'd need to pay 1/8 discount points (so about $1000) to extend it to the 8th. Plus my lease on the place I'm renting ends on the 31st so it's a bit of a hassle to move out my stuff and crash with friends for a week. Any advice? Maybe I could ask the seller to front the $1000, or to close on the 31st and I'll take the top floor while they clear the renters out? The renters are paying less that half of what market rent it, I'm curious if they're trying to resist leaving and the sellers are stalling to figure out what to do. It shouldn't take a whole week to deliver that floor broom clean.
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Jul 28, 2017 14:57
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Zero VGS posted:My offer on a 2-family was accepted and I was due to close on Aug 31st, but now a few days in the sellers want to extend the closing by 7 days to have more time to clean the first floor after the renters leave on the 31st. Close the deal on time, offer a short term rent-back to the seller at market rate.
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Jul 28, 2017 16:41
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Motronic posted:Close the deal on time, offer a short term rent-back to the seller at market rate. I dunno how much sense that would make because the sellers themselves don't live in the house and the renters are allegedly clearing out on the 31st... it seems weird to rent the owners the house so they can take a week to clean it... Maybe they're just trying to avoid the hassle of closing the house on the 31st and then doing all the cleaning on the same day, while the traffic is a mess because it's also student moving day. I'm leaning more towards asking the sellers to lower the price by $1000 to make up for my rate lock extension and call it a day.
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Jul 28, 2017 20:37
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Charging rent to extend occupancy is extremely normal. People do it all the time and it makes sense in your position to do it.
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Jul 28, 2017 20:52
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I've done it - closed the deal and then the soon to be previous owners needed an extra week so we negotiated a rate and done. It is very common and could be applied here even though the circumstances are slightly different. There's no reason you should have to be on the hook for a change in offer/closing terms. Though granted, people will try the "maybe they are a "nice guy" approach to shift costs.
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Jul 29, 2017 19:26
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Well, we're asking the sellers if they'll foot the rate lock extension fee, I paid like 70k over list price so they ought to be in a nice mood about it. By the way, the bank also said I could buy a rate discount point, it was something like $5000 to reduce the monthly payments by $50 per month. That would break even in 8 years, and we're definitely keeping the house for longer than that. In a vacuum it seems like a good idea, but shouldn't taking that 5000 and buying index fund stocks handily beat that out?
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Jul 29, 2017 19:55
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You will refi the loan in less than 8 years anyway. Not worth it.
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Jul 29, 2017 20:07
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I just made my own spreadsheet to calculate the value of a point and compare it to leaving it invested. For me they paid off even compared to investments after 5-10 years. Not sure why I'd want to refinance in 8 years since with 2.4 points I got a 3.25 fixed.
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Jul 29, 2017 21:20
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Xenoborg posted:I just made my own spreadsheet to calculate the value of a point and compare it to leaving it invested. For me they paid off even compared to investments after 5-10 years. Not sure why I'd want to refinance in 8 years since with 2.4 points I got a 3.25 fixed. Mind sharing it on Google Docs or something? Edit: Here's my math: I need to spend exactly $4,788 to lower my mortgage rate by 1/8% This will save me: $276 in 8 years ($5064 in interest savings minus the $4,788 I spent in the first place that I can't get back). $14202 in 30 years ($18990 minus the $4,788) If I take that same $4,788 and put it in the stock market, assuming it grows at the generally accepted rate of 7% each year, compounding annually, I would have: $8,227 in 8 years (remember, I only invested the original money instead of spending it, i.e. I can sell my stocks and cash it all out). $36,447 in 30 years Zero VGS fucked around with this message at 22:13 on Jul 29, 2017 |
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Jul 29, 2017 21:42
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Spermy Smurf posted:You will refi the loan in less than 8 years anyway. Not worth it. What are you basing that on? I don't think rates are going to be lower in 8 years so he'd be... paying a bunch of money to refinance into a higher rate for some reason? A more realistic assumption is that he'll be ready to move somewhere else before the end of 8 years
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Jul 30, 2017 00:32
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Zero VGS posted:Mind sharing it on Google Docs or something? I prettied it up a bit and tried to make it more generic. It doesn't support PMI because I didn't need it so didn't bother finding out how to model it. I also make no promises for google docs, I did it in Excel. It also supports having renter(s), if you don't have one set the rent percentage to 0 and ignore the renter columns. https://drive.google.com/file/d/0B_95DXwVaseRZ1VtUG5OUmk5elE/view?usp=sharing
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Jul 30, 2017 01:37
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QuarkJets posted:What are you basing that on? I don't think rates are going to be lower in 8 years so he'd be... paying a bunch of money to refinance into a higher rate for some reason? The average loan lasts about 8 years. The last decade and super low rates included. He may not refi, but moving would count toward that statistic. I said refi, but whatever.
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Jul 30, 2017 02:19
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I'm one of those idiots that bought a super expensive condo in 2006 in Los Angeles County and had to short sell 5 years later because my wife lost her job. We ended up moving to Chicagoland and due to circumstances ended up moving back to Los Angeles County this year (had a kid, wanted to be closer to my immediate family and friends). We've been living with my parents for the last 3 months and while I'm totally okay with it, my wife has been pretty adamant about moving out and buying a house. I"m still gunshy especially since housing prices now are even HIGHER than when we last bought and it's making me super nervous. We found a nice $800k 1600sqft corner lot 2 blocks from the freeway in a great area with lots of stuff to do and great schools. Also super close to my parents and my sister so it's basically everything I want. But holy poo poo 800k, which honestly isn't bad in the Glendale/La Crescenta area, but just the thought of the price alone makes my stomach hurt. But we have around 300-400k available cash and combined make over 200k a year so we can get the loan amount down to where we can get 3.25% interest for 20 years. It was a foreclosed property in 2011 and was sold for 400k. The original owners took out a total of 650K in loans to totally renovate the place. New roof at some point in the last 5 years, garage converted to a bedroom and a new HVAC put in this year (looks like they got permits for it so that seems okay maybe?). The lawn was taken out and filled with rocks so I don't have to ever mow the lawn and since we aren't in Illinois anymore I don't have to shovel snow so it is pretty great. Am I being stupid buying in this hyper lovely market in LA County?
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Jul 30, 2017 02:21
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cyxx posted:Am I being stupid buying Yes, always yes
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Jul 30, 2017 03:44
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QuarkJets posted:Yes, always yes Yeah I've always known that in my heart. But I guess I'm willing to pay a 500k premium for a smaller house than I can get in Illinois just to be closer to my family. 
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Jul 30, 2017 04:01
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cyxx posted:Am I being stupid buying I mean really though, let's parse this all the way down.
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Jul 30, 2017 07:34
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Zero VGS posted:Well, we're asking the sellers if they'll foot the rate lock extension fee, I paid like 70k over list price so they ought to be in a nice mood about it. There are good arguments to be made on both sides, and while personally I wouldn't take points if you're already below 4%, you're frankly fine whichever way you go (unless you have to sell before the breakeven point).
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Jul 30, 2017 08:09
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It is shocking how bad some real estate photography can be. My latest pet peeve with it is when people take pictures of furniture. I don't mean they are taking a picture of a room with some furniture in it, which is fine, I mean they are literally posting a close-up picture of their dining room table that takes up the entire shot and you can't actually see the room around it. Yes, your table is very nice, but I assume you are taking it with you, so I don't need details on the grain of the wood, I need to see how the room looks with a table in it. The other fun one is padding the list of pictures with a shot of a road sign so people know you're near a highway, or a park that's actually a half mile away and really has nothing to do with the house you're trying to sell. One person had a picture of a Metro train in a tunnel included in their pictures just so they got to that magical 30 picture number. In my area you're asking someone to give you nearly a half a million dollars on the low end, and you can't even be bothered to take some time out of your day to take some decent pictures of your house. It doesn't seem that hard to me, and is turning away potential buyers and bidders just because you're lazy.
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Jul 30, 2017 18:32
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cyxx posted:Yeah I've always known that in my heart. But I guess I'm willing to pay a 500k premium for a smaller house than I can get in Illinois just to be closer to my family. How many round trip flights can you take for $500k? Sounds to me like you could see your family like every other weekend for 20 years and still save money. (25 round trip flights per year @ $500 each = $12,500/yr x 20 years = $250k
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Jul 30, 2017 19:16
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cyxx posted:Yeah I've always known that in my heart. But I guess I'm willing to pay a 500k premium for a smaller house than I can get in Illinois just to be closer to my family. I live in the bay area. The secret to not buying a house in these insane markets is to think about all the places in the world you could straight up retire with the amount of money you'd have to put down to get even a lovely, "well, it'll do" sort of house in this state.
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Jul 30, 2017 19:30
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Sundae posted:I live in the bay area. The secret to not buying a house in these insane markets is to think about all the places in the world you could straight up retire with the amount of money you'd have to put down to get even a lovely, "well, it'll do" sort of house in this state. I've told so many people at my company some version of this. Sometimes you see a lightbulb go off in their heads, other times they are so stuck into "here and now" and/or have insufficient life experience to understand that this is not permanent (for gently caress sake, you are 25-30 years old - this is not how the rest of your life is gonna be, not how you will want it to be). One of the success tories of this was my employee who 2 months later asked me if he could move home halfway across the country to start a family and work remotely because that's where he could afford a house AND a family. I said gently caress yes and he's been "back home" for about a month now. He's happier and more productive. I don't expect this to change.
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Jul 30, 2017 19:41
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Zero VGS posted:I paid like 70k over list price so they ought to be in a nice mood about it. 
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Jul 30, 2017 19:46
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Motronic posted:I've told so many people at my company some version of this. Sometimes you see a lightbulb go off in their heads, other times they are so stuck into "here and now" and/or have insufficient life experience to understand that this is not permanent (for gently caress sake, you are 25-30 years old - this is not how the rest of your life is gonna be, not how you will want it to be). It's possibly a huge risk on his part. If he loses his job, can he land another that pays as well, and lets him work remotely?
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Jul 30, 2017 20:02
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I asked my friends for help with this, but they tried to encourage me, so I need someone in this thread to kick me in the balls. I work in MA in what we could charitably call 'Outside Boston'. I'm stressing out about moving closer to my job. Reasonably affordable home-type apartments aren't answering my emails (maybe they want to rent to students of a nearby college? I remember that happening near my university, but that is just a guess.) The actual apartment buildings are way more expensive and many are full and the others are also not answering me. I was hoping to leave this type of discouraging dismissal behind when I stopped looking for work, but I guess it's just everywhere now. So what is the reasonable reaction for a medium-level stressful situation? Look at the infinitely-more stressful world of home purchasing. It is 80% romantic; the idea of owning a home appeals to me. I tried to convince myself it's a bad idea with numbers. I'd see those little "estimated mortgage' on the pages and notice how they are about the same as most of the middle of the road rents, which stokes my curiosity, but I know inside that is almost certainly bullshit anyway. Still, I'll look at the calculators and some math and consider the amount I spend and save, etc, and the answers are murky but possible. So I couldn't squash that feeling myself. When I asked my friends to help me discourage this notion, instead they suggested going one step further and getting a multi-family unit for the purposes of becoming a landlord as a 'side hustle'. Not sure about that for various reasons, but they encouraged home purchasing overall. They focused on the positives. I believe my position and my company to be stable. I have excellent credit. I have a supportive family, not that I would leverage them into this unless they were also excited about the prospect. I probably won't lose money so long as purchase within my means. (Not sure about this one.) In addition, I am not being kicked out of my current place so there is no rush so I could try and find the right place. Also, being grounded to a place is not as big a problem because my workplace is reasonably close to a rail station, so if I had to change companies in the future, I could focus the search on Boston and not necessarily have to worry about being stuck there in the short term. I read the OP like three times. The two main glaring problems here are: I do not have enough for PMI, and I am a little baby chicken wimp. The PMI thing sucks but might be tolerable, and while cowardice is bad, caution is good, which is why I've been asking around. Someone please tell me I'm an idiot so I can quench this silly romantic notion, please and thank you. As I was typing this up, this was posted: Motronic posted:I've told so many people at my company some version of this. Sometimes you see a lightbulb go off in their heads, other times they are so stuck into "here and now" and/or have insufficient life experience to understand that this is not permanent (for gently caress sake, you are 25-30 years old - this is not how the rest of your life is gonna be, not how you will want it to be). Yeah, I'm just about to turn 34, but still maybe what I need to remind myself is that this is the first step and that there is no rush. I'm gonna try to tell myself that and see if it works.
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Jul 30, 2017 20:20
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Leperflesh posted:It's possibly a huge risk on his part. If he loses his job, can he land another that pays as well, and lets him work remotely? Absolutely not, and his raises are from here forward going to be "scale" for where he lives. We discussed this, all the way along me telling him he needs a CPA and fee only financial advisor. He's gotten both, but dude was pre IPO and hasn't touched anything of his options and RSUs.....he's doing this on salary. I told him it's time to cash out a nest egg. He was doing fine "at home" 4 years ago before he took the job here (stole him from a vendor) and they would love to have him back. But now he has a bunch of increased savings (which is enough on its own) as well as a bunch of way-pre-IPO-strike-price-options, which certainly makes this less risky......if his CPA/FA convinces him to sell some or all of them.
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Jul 30, 2017 22:14
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Motronic posted:dude was pre IPO and hasn't touched anything of his options and RSUs.....he's doing this on salary. I told him it's time to cash out a nest egg. This is simply smart regardless. He currently has all of his eggs in a single basket. Time for some diversification so a single change in fate doesn't remove both his stock and salary value.
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Jul 30, 2017 23:32
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H110Hawk posted:This is simply smart regardless. He currently has all of his eggs in a single basket. Time for some diversification so a single change in fate doesn't remove both his stock and salary value. Yes, yes, yes, yes. This is what I've been trying to council him on. "Would you buy this stock if you didn't already own it." "No." "Then sell it." This is almost always the answer for vested options, RSU, etc unless you happen to be a wealthy serial entrepreneur and this particular grant doesn't comprise 95% of your "portfolio."
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Jul 30, 2017 23:57
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As for spending a ton of cash and buying a house: Don't forget YOLO and also YMDAT (you might die any time). Yes be smart and set yourself up for a nice retirement, but at the same time if you want to do the smartest financial thing, youd be renting the shittiest studio apartment in Crackland for decades. The present matters just like the future in terms of happiness. Strike a balance.
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Jul 31, 2017 00:09
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Magnetic North posted:I asked my friends for help with this, but they tried to encourage me, so I need someone in this thread to kick me in the balls. I'm about the same age in you and also outside Boston, and got my offer accepted on a two-family. The top unit includes a large finished attic so it rents for a lot more than the somewhat smaller first floor, which I'm taking. My mortgage, plus insurance, plus property tax will be $4200 per month and my rent will be *at least* $3500/mo. Use Redfin and you can enter those stats to figure out the cash flow ratio in/out. Granted, I got a VA loan approved for 765k and I don't have to pay PMI even though I'm only putting 7% down. Still, while my deal is sweeter you can make it work too. The one thing you have to realize is there's investors/contractors with a fuckton of cash. Any multi-family that you can bid on for a fair price, they can bid the same, but any smart seller will take the cash offer, then the investor turns around and rents it to you to keep your rear end poor. I kept getting bid out, but the way I finally got a place was finding a house that was a nice place with a poo poo parking situation. That scared all the investors off, because they took one look and knew they couldn't park work trucks there. Then I was only up against other ordinary Joes with mortgages, so I bid up a little and wrote a letter to the seller I included with my offer, we love the place and I'm a disabled vet, getting the place for my Mom and I. That put me over the top. Magnetic North posted:In addition, I am not being kicked out of my current place so there is no rush so I could try and find the right place. Good, wait until winter. You're a month from moving day in Boston and it is complete pandemonium right now as rich students/faculty are getting places. Check in the winter where no one wants to freeze their asses off at showings, you'll have less competition and will have saved up more of a downpayment by then. One last thing, with multi-families pay special attention to whether or not the homes have basements/attics that can be finished. If you can say, take a basement and rent it to a friend or family member for some extra income as an "in-law apartment". Some might have an unfinished basement but they're still zoned for multi-family. That's another reason to spend more time saving up cash though.
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Jul 31, 2017 00:10
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Motronic posted:Yes, yes, yes, yes. This is what I've been trying to council him on. It hurts my head to think about this guy. He could pay down/off his mortgage, or have a long term nest egg to really let him take the next big risk, etc. Keep 10-25% of it if you insist. I'm leaving my current place in a week and won't be exercising more options because I'm already too "heavy" into this company with my very cheap options from years ago.
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Jul 31, 2017 01:09
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cyxx posted:Am I being stupid buying in this hyper lovely market in LA County? Hey buddy, I'm also in this situation in LA County. I'm out on the west side and we're in the ~$900k range with an accepted offer on a 4 bed/2.5 bath/2k sq ft place. The way I think about it is that I have a stable job that pays more than enough to afford it, a ton of savings, and lifestyle-wise it'll be much better (especially with a kid in the next year or so) than our current 2 bed/2 bath/1k sq ft place. Basically, decide how much house you can afford and the lifestyle you want to live and match the two up. I went through the NYTimes Buy vs Rent calculator and the new places works out to be equivalent to around $2.5k/month rent over the next 9 years, which is about $400 more than our current apartment. I'm willing to pay that much more for the increase in lifestyle.
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Jul 31, 2017 01:31
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H110Hawk posted:It hurts my head to think about this guy. He could pay down/off his mortgage, or have a long term nest egg to really let him take the next big risk, etc. Keep 10-25% of it if you insist. I'm leaving my current place in a week and won't be exercising more options because I'm already too "heavy" into this company with my very cheap options from years ago. It hurts my head too. But he's a good guy and not fluent on these matters, which is why I'm trying to steer him towards someone who is not his bass that can tell hm the same thing. He's been a guy working for an employer his whole life. He ended up at this startup because we pursued him and paid him more salary. Dude honestly doesn't' grock what he has now, or how ephemeral it may be unless he acts. He won a lottery he didn't willfully enter, and I want to make sure it pays out for him. I hate basic personnel management. When I can do something like this (forget even the money part, just being able to make someone work from half a county away to improve their life) management becomes worthwhile for just a brief second. I feel like my job is to do that and be a poo poo umbrella for my people to upper management. This means I will never get anywhere in management of a large company. I'm okay with that. Motronic fucked around with this message at 01:54 on Jul 31, 2017 |
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Jul 31, 2017 01:50
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Drunk Tomato posted:As for spending a ton of cash and buying a house: It's funny because I think it might be literally FOMO at work here. I see this place that is within my range, and is quite small but I don't need much. (No kids planned.) So I get worried because it won't be there later, which is true. But it's not like missing out on a soulmate or something; other great choices should come by if I wait... or will they? Something will be out there, and in the meantime I can accrue more savings and increase the breadth of what I could theoretically get. Hey, congratulations on getting accepted. Them thar prices are way out of my range, but then again, I'm like 30 miles outside Boston, so hopefully I can find something moderately less pricey. As far as your advice goes, maybe I'll try and hang on for a few more months. Or maybe I'll keep looking during that time and see if the right opportunity pops up.
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Jul 31, 2017 01:50
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Ashcans posted:Thanks for confirming that I'll never be able to buy a place in Boston. List prices are bad enough. The agent intentionally listed it for $50k under what they comped it at (my buyer's agent works in the same office as listing agent and gave me that insight). Usually you're not supposed to underlist, as it causes a lot more hopefuls and looky-loos to show up and wastes people's time, but it's such a seller's market right now that anything goes. But one look at what recently sold houses are going for in the Greater Boston Area vs their list price will show you it's usually going to take some extra unless it's a serious handyman's special or distressed.
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Jul 31, 2017 02:05
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Drunk Tomato posted:As for spending a ton of cash and buying a house: A YOLO attitude seems like it'd push you toward going on crazy trips and buying cool expensive things, not "I'm ready to settle down for 10-20 years of calm, domestic bliss"
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Jul 31, 2017 03:04
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