House-buying thread - Why is everyone involved in this process so deeply stupid?

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > House-buying thread - Why is everyone involved in this process so deeply stupid?

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swenblack: Jan 14, 2004

QuarkJets posted:

*shrug* You say that my advice is bad, I say that your advice is bad. At least you admit that your entire opinion is based on nothing but an anecdote.

Of the quotes that I received for extended title coverage, none of them were even close to costing double that of the minimum, mandatory coverage required by the bank. It was closer to 20%, the net additional cost being a tiny fraction of the closing costs.

Are you just anti-insurance in general? It's okay if you are. I'll also say that home warranties are garbage because they really don't ever pay out for anything, unlike title insurance where there are many, actual, real, documented cases where people successfully filed title insurance complains. But whatever dude, it's cool if you think it's a bad deal or whatever

No, I have no involvement in any insurance or real estate industries. But I do a lot of statistics, professionally, so I understand that there's a difference between "my dad said that he has never personally dealt with a case where title insurance was useful" and "title insurance is never useful, ever, despite documented cases showing otherwise". That seems to be where we disagree, and I'm fine with leaving it there.

You come across as extremely hostile and condescending. I'd highly encourage everyone to google what the commission is on owner's title insurance before they make a decision. Also, if you do statistics professionally, what would value would assign to an insurance product that pays out 4% of it's value in claims? You know, like owner's title insurance.

Please don't construe me as anti-insurance. I have a high opinion of lender's title insurance. It's actually quite comparable to auto liability or medical insurance. Buying an additional policy as an owner is usually completely redundant. The overwhelming majority of title defects are discovered and fixed via lender's title work. If the title work isn't spot on, the bank that writes the mortgage can't resell it at full value on the secondary market (that's a big deal). I'd challenge you to find an example of an owner's policy preventing someone from losing their home that isn't sponsored by a title insurance company.

Also, I never said title insurance is never useful, ever. I simply encourage people to talk to people they trust, do their own research, and make their own decision, instead of blindly buying the most expensive owner's title insurance possible, like you advocate.

# ¿ Jun 13, 2015 04:45

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# ¿ May 14, 2024 13:05

swenblack: Jan 14, 2004

QuarkJets posted:

I'm not sure where you're getting your numbers, but according to the NAIC it looks like typical loss ratios are closer to 8-11%. That's pretty low, which isn't surprising for a form of insurance where most claims are prevented with careful research, making it a bit unlike most forms of insurance. This is confirmed by looking at expense ratios, which have been 102-110% every quarter in the report; no surprise there, title companies spend more money investigating and preventing title issues than they do in paying out claims, which is arguably a very good thing.

You should understand what you post before you post it. That document references title insurance as a whole. We're specifically talking about owner's title insurance, which is mostly redundant for the reason you stated about careful research preventing loss.

QuarkJets posted:

If you want to argue with me the least you can do is not strawman like this. I'm in full support of people shopping around, doing research, and arriving at their own decision. This is completely compatible with me giving my opinion on whether someone should buy an extended policy.

QuarkJets posted:

The 'Eagle' policy (I assume from First American?) that you're talking about is basically a full Owner's policy. You should get it.

I'm not constructing a strawman argument here. You blindly advocated that Jose Cuervo get enhanced owner's title insurance.

Speaking of strawmen though:

QuarkJets posted:

there's a difference between "my dad said that he has never personally dealt with a case where title insurance was useful" and "title insurance is never useful, ever, despite documented cases showing otherwise". That seems to be where we disagree, and I'm fine with leaving it there.

# ¿ Jun 13, 2015 14:13

swenblack: Jan 14, 2004

gwarm01 posted:

I didn't see it in the OP, but what is the general consensus on online refinancing? Who are the most recommended lenders for this? I'm sitting on a 6% interest rate from 2008 and I really would like to lower my monthly payment.

Stefan Prodan posted:

What's the gimmick with the no closing cost refinance loans I hear advertised on the radio? If they can offer a total thing that ends up being a smaller monthly payment is there any downside to doing it?

I just closed on my third refinance in three years--here's my experience.

All three times I started working with a major bank (Wells Fargo/USAA/Navy Federal) and ended up closing with a random mortgage broker I found on Zillow. Instead of clicking on the contact me button, I just called the broker directly and got a better rate than shown on Zillow. I actually ended up being a big fan of independent brokers because they're highly motivated to close.

All three times, I took a slightly higher rate to cover my closing costs and a few thousand dollars of my principle. All three times, my interest rate, payment, and loan balance went down as a result of the refi. The term was reset to 30 years each time, which is a little bit of a "catch." The other downside is that refinancing is a complete pain in the rear end and takes over a month of tracking documents and calling people. Of all the people I worked with, USAA was by far the worst. They missed three closing dates and then wouldn't give me back my deposit when I took my business elsewhere.

Going from 6% to 4% would save you about $250/month on a $200k mortgage. That's a huge deal.

# ¿ Aug 2, 2015 02:24

swenblack: Jan 14, 2004

Harmburger posted:

When's the right time to shop around for lenders? I had a pretty good quote from Navy Federal that I got pre-approval through,(3.5%) but worth checking out other rates I suppose. Looking at VA 30 year fixed if that makes a difference. We found a place we liked and submitted an offer already.

edit: Lender's fees is 1% origination, with a 2.15% VA funding fee rolled into the loan, though I'm hoping to get the 3.25% with 1 point/1% origination also advertised.

3.5% + 2 pts could be great or just average depending on your situation. Check Zillow for comparison purposes. Also, paying 4.15 total points to close on top of all the other closing costs is pretty steep.

# ¿ Aug 6, 2015 02:00

swenblack: Jan 14, 2004

Elephanthead posted:

Toronto has high rates, similar to Detroit where the average rate is $10,000 a year. Yes that amount is right. Detroit is over double the nearest most expensive US city. Toronto averages $2,000 but young males typically pay double the average.

WTF, dude. Detroit is the highest in the country, but Google is telling me you added zero. It's really just over $1000. The national average is $800. A quick Google search also turns up that $400/month for car insurance in Toronto is actually a fairly average rate.

# ¿ Jan 13, 2016 02:40

swenblack: Jan 14, 2004

Andy Dufresne posted:

Yeah no way I was buying 10k per year in a region with such depressed wages. That would mean the average person had $7kish in claims per year? That's probably the median vehicle value.

Yeah, the per capita income of Detroit is around $15k/year. It just doesn't pass the sanity test.

# ¿ Jan 13, 2016 03:32

swenblack: Jan 14, 2004

kys posted:

So, we're under contract for a house in Northern Virginia and I am shopping between lenders. Where is the point of no return with Lenders? We have a locked-in rate of 3.75% with a local lender who supposedly ordered an appraisal (VA) and who we feel tied to because our realtor says "can close fast." Quicken Loans is offering the same rate with much less in closing costs, according to both of their Loan Estimates. We haven't signed the Residential Loan Application with either of them. 30 days to close, which may be extended due to repairs needed from the Home Inspection.

Go on Zillow and request a mortgage quote. Call the company that gives you the lowest quote directly and ask for their best deal. 3.75% is a lovely rate, BTW. You'll end up overpaying by $43k for a median price home. The going rate for a 30 year fixed rate VA loan in NoVA is 3.25% with cash back at closing, as long as you have good credit. Also, keep in mind that your realtor gets a couple thousand dollars if they refer you to someone who sells you an overpriced mortgage.

# ¿ Jan 16, 2016 21:49

swenblack: Jan 14, 2004

kys posted:

Do Jumbo Loans generally get better rates? Does cash back at closing mean 0 closing costs? It seems like were getting swindled here and I already applied for a lender from zillow and the Interest Rate it quoted me at is 3.25%. Granted the interest rates have lowered some since we locked in, but that is a huge difference.

In NoVA, a VA loan needs to be over $729k to be a jumbo, IIRC. Jumbos usually are little more expensive than conforming loans, but not by much. You can't actually get cash back at closing from a VA, but you can use the money to populate your escrow account.

# ¿ Jan 17, 2016 18:46

swenblack: Jan 14, 2004

kys posted:

Update: This is the e-mail I got from my original lender after I confronted him with a better Loan Estimate from a competitor:

"I have requested another concession from our pricing desk but have not heard back yet.

I don�t understand the continuous shopping I beat Quicken�s deal and locked you in so I thought I had a commitment from you. Also, I would like to point out that internet lender�s are often bait & switch. I would be very skeptical."

Do Never Trust or Buy

Wow... Just, wow... The guy is actually trying to shame you into going through with a scam that costs you tens of thousands of dollars?

# ¿ Jan 21, 2016 01:01

swenblack: Jan 14, 2004

DaveSauce posted:

So far the only places I've checked for mortgages are our credit union, and a bank recommended by someone at work.

Are these online lenders really worth looking in to? Yes, we got the line "ooooh don't go giving your information to everyone that's how you get junk mail!!!" from the bank we're talking to primarily. Our credit union is hard to talk to, but only because the mortgage person assigned to us was out on medical leave or something for a while.

The rates we're being quoted by both are on the low end of what's CFPB.gov is listing for rates in our area/credit score. Is that the end of it, or should we start looking at other lenders?

Just go on Zillow, get an anonymous quote, and go with the one that gives you the best rate/closing costs. I've closed three refis through brokers I found on Zillow with no problems at all.

# ¿ Jan 22, 2016 02:42

swenblack: Jan 14, 2004

DaveSauce posted:

Don't forget about roofs...seems like every house we've been interested has a roof that is nearly due for replacement.

I'm amazed at the precision of shingle manufacturers. My subdivision was built 23 years ago with the cheapest (20 year) shingles possible. More than half of the roofs have been replaced in the last 3 years, including mine ($8k). It kills me that 50 year shingles are only $600 more. Seriously, the builder could have charged $600 more for the house and I wouldn't have had to pay $8k. Fuckers.

Also, my garbage disposal exploded three days after closing. Literally exploded. The blades in it "liberated" according to the plumber. That was $600. Do never buy.

# ¿ Jan 23, 2016 23:25

swenblack: Jan 14, 2004

sadus posted:

Found an interesting house for a decent price in an awesome spot, but the listing warns "ALL BEDROOMS ARE NON-CONFORMING". One upstairs loft style bedroom and another tiny guest bedroom in the basement. "Makes a wonderful summer retreat or possible to convert to full-time residence." Are you somehow allowed to legally stay in a "summer retreat" with non-confirming bedrooms, but not live there full time? Or is it just a fire/safety thing in general but not illegal to live in? I was already a little suspicious because it's been listed for 9 months now but I'm guessing this is why.

In my neck of the woods, "summer retreat" means un-insulated.

# ¿ Feb 16, 2016 00:45

swenblack: Jan 14, 2004

emocrat posted:

So, whats up with these super low/no cost refinance loans? Based on some suggestions from this thread, I took a look at the Mortgage section on Zillow, put in my info and have a pile of quick estimates now. My understanding was that the no cost programs were paid for in 1 of 2 ways. Either they just roll the fees etc into the loan, or you end up with a higher rate than you would otherwise get and that difference is the cost. But Ia m looking at these, and seeing $1 in fees, with nothing added to the loan balance, and rates as low as I can find on any loan without buying it down. What am I missing?

Zillow quotes don't include escrow expenses (taxes and insurance), local transfer taxes (if applicable), or daily interest payments until the first mortgage payment, all of which will require you to bring a check to closing or need to be rolled onto the loan.

Zillow also defaults into showing you zero point loans. You can see more loans by clicking the filter option on the top right and selecting 1 or 2 point loans for a lower rate.

I know that seems too good to be true, but I've refinanced three times through Zillow brokers and always gotten slightly better than the quoted rate.

# ¿ Feb 18, 2016 01:05

swenblack: Jan 14, 2004

QuarkJets posted:

I think this thread has proven that your best option is almost definitely going to be "you'll be happier and richer if you rent"

QuarkJets posted:

More often I think the thread offers a pretty positive vibe with a lot of cautionary advice (aka be aware of this, that, and the other)

Well, which one is it?

# ¿ Feb 29, 2016 05:57

swenblack: Jan 14, 2004

ShadowHawk posted:

Do you really think rents will generally rise at over 4% above inflation per year, for 20 years? That's more than aggressive growth stock funds are expected to typically get.

I think he just misused the term "real," given that he said the fixed mortgage costs would be 1.00 - 1.5x implying zero inflation. Historically home prices and rents have increased slightly more than inflation in most markets.

# ¿ Mar 3, 2016 14:43

swenblack: Jan 14, 2004

DaveSauce posted:

We wrote off our credit union last night. They've been pretty awful in terms of responding to us. They're slow and don't really answer the questions we ask. They just want to fill the paperwork out and get things moving. Which is too bad...their rate is a tad higher, and their closing costs are much higher, BUT we'd be eligible for a bonus dividend every year based on how much interest we paid on the loan...which for last year was about $200. That adds up quick. Plus, we already bank with them, so paying them is dead simple, and being that they're a credit union they're unlikely to sell the loan.

So I spoke with the 2 recommendations that my agent gave us. They're both correspondent lenders. One was pretty good to talk to, the other was being a little pushy and kept asking "what do you need to think about? What's stopping you from going with us right now?" So he's toast...his rate was higher anyhow.

is there anything sketchy about a correspondent lender? I never heard of that until yesterday. The downside is that they sell the loan instantly, but other than that they seem like they're going to give us the best deal in terms of both the rate and the closing costs. Is there anything I should watch out for? The main reason this guy was recommended by our agent is because he's worked with him for a long time and has a history of working closely with our agent and closing on time with no issues. Our agent claims there's no kickbacks, but even if there were I can't see how we will get screwed by this. If we don't close, our agent doesn't get anything, so he has no reason to recommend bad lenders.

Our other option is a direct lender that we've been working with for pre-qual stuff since October. This lender claims to retain 90% or more of the loans they originate. He's been really responsive and great to work with, so we hate to ditch him, but he really can't compete with the offer of the correspondent lender. I don't look forward to having our loan serviced by Big Bank Conglomerate Inc., but for the $3,000+ we're about to save on closing costs and the lower rate, I think we'll survive.

Two quick points:

1. Your loan will likely be sold within a week of being originated no matter who you go with.
2. Check rates on Zillow. 0.125% difference on a $200k mortgage is $5k over the length of the loan.

# ¿ Mar 5, 2016 22:51

swenblack: Jan 14, 2004

Pryor on Fire posted:

Just tell us what the economy of St. Louis is based around and we can tell you if it's a bubble or not. How many Apple watches do you see per capita?

The easiest way to tell a bubble is to look for unexplained growth. Look at this chart of the Case-Shiller Index for Miami. Home prices almost tripled over the course of five years. Compare that to Denver. St. Louis actually has a fairly large federal government sector, which might explain why it weathered the Great Recession so well.

# ¿ Apr 13, 2016 01:43

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# ¿ May 14, 2024 13:05

swenblack: Jan 14, 2004

chupacabraTERROR posted:

Well if we're being Chartists, what do you make of this one? https://research.stlouisfed.org/fred2/series/SDXRSA

Huge bubble, slight overcorrection, possible second bubble. Prices seem a little high relative to their historical norms, but it is San Diego. Who doesn't want to live in San Diego?

# ¿ Apr 14, 2016 00:20

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > House-buying thread - Why is everyone involved in this process so deeply stupid?

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