[48Laws]

HOA fees on top of property taxes.

[MediaArtist]

Originally Posted by 48Laws

The delinquency regarding FHA loans isn't as cut and dry as you make it.

Oh really. Then what's the truth behind FHA delinquencies increasing 27%?

Again, PMI is to offset the lack of equity in a new home which is something lenders want to safeguard. I recommend 3-15% down and the rest for emergency funds. Why throw all your money into a liability anyway? Bad advice. Lol

That makes no sense. PMI doesn't exist to "offset the lack of equity", it's a premium charged to cover the risk of a borrower defaulting on a high LTV loan which is guaranteed by FHA, and IMO, it isn't enough because FHA is still failing and severely insolvent. Paying 3% on a home and financing the rest simply doesn't work, it's as dangerous as the 0% loans that wiped out the sub-prime market. If 3% down worked, FHA would be solvent, and wouldn't be at risk of failing. There's a reason why the private lending industry won't do 3% down payments, it's because they know it doesn't work. If you can't afford 20% down, and reserve funds, then you should be looking at a smaller, or less expensive house. Your advice is absolutely horrible.

[MrRoboto]

Originally Posted by ABQ325i

I would make sure that my buyers agent was not the sellers agent also, even better if they didn't work for the same company. Referral's are the best bet.

Actually double agency arrangement can work in your favour. Often the agent is more willing to take less commission to make the sale. Helps in your negotiation.

[48Laws]

Originally Posted by MediaArtist

Oh really. Then what's the truth behind FHA delinquencies increasing 27%?



That makes no sense. PMI doesn't exist to "offset the lack of equity", it's a premium charged to cover the risk of a borrower defaulting on a high LTV loan which is guaranteed by FHA, and IMO, it isn't enough because FHA is still failing and severely insolvent. Paying 3% on a home and financing the rest simply doesn't work, it's as dangerous as the 0% loans that wiped out the sub-prime market. If 3% down worked, FHA would be solvent, and wouldn't be at risk of failing. There's a reason why the private lending industry won't do 3% down payments, it's because they know it doesn't work. If you can't afford 20% down, and reserve funds, then you should be looking at a smaller, or less expensive house. Your advice is absolutely horrible.

Yes it does. The less you put down, the higher risk you are to a lender. 20% is a sizeable amount to put into a home that's worth $300k. That's called EQUITY! That's less of the lender's money they have to risk on your ass if you die, default or otherwise on your newly acquired home. A PMI covers them.

Regarding your FHA comments: the increase in FHA delinquencies is on par with the rate of increase in delinquencies with conventional loans. Lol. and???


Income/debt ratio is the biggest determining factor on affordability of a home, and not a big down payment is which does little to
Affect your monthly expenses. Cash-on-hand is what most Americans don't have. Throwing $60k away on a liability like a home when that money can secure your mortgage for a few years alone is just plan stupid. Pay yourself first. You have 30 years to worry about your mortgage, then your lifetime to pay taxes.

[momentum]

1. if you are getting a loan- put as little down as possible. less risk for you and more risk for the bank.
2. look for a realtor that know HUD foreclosures.... i buy almost all my houses at HUD forclosures.... HUD is govt own properties.. Govt dont care what they sell the houses for.... a computer not a person that set prices- which mean sometime you get super discount...
www.hudhomestore.com
3. and yes i am a millionare... i just contracted a house today for $12900 and sold it in one hour for $30000.

[JasonCSU]

Originally Posted by MediaArtist

If you can't afford 20% down, and reserve funds, then you should be looking at a smaller, or less expensive house. Your advice is absolutely horrible.

I don't understand why this advice is absolutely horrible. How many people really have 20% in cash to put down on a house? For an example, let's take a 200k house which would require $40,000 down (a large amount of money for most people). Now, would it be in a buyer's best interest to deplete their savings account and put that full 20% down, or say only put 10% down leaving the buyer with some cash on hand to deal with emergencies or other financial issues. Home ownership seems to incur other expenses unexpectedly, so wouldn't it be smart to keep some cash available? For instance, the home inspection may say the furnace is in ok condition, but what if it ends up failing in the middle of winter? Replacing a furnace is not a cheap expenditure.

I'm guessing you'll probably say that one should still save up 20% in addition to some reserve cash. The thing is, there are some housing markets in which it is a good time to buy. While waiting longer to save that larger down payment, home prices and interest rates could rise forcing you to wait even longer and save more.

[momentum]

most cosumers think to put as much $$$ down as they can into a house for the long run.... well in today situtation, if you lost your job or anything- you lose your house too.... now knowing that, its best if you only had a very little $$ in the house, you can walk away and not lose much..... and remember you can always paydown the principle anytime...

a business man would hold as much cash as he can for a rainy day.

[momentum]

townhouses are cheap to live in and later makes lots in rental income to pay for your new BMW... Rental properties are renting at super high rate now...
in houston, tx, you can buy a $25000-$35000 townhouse and rent for $1200 which mean you can afford a 2013 M3 at $65000 and a monthly payment of $1200..... and after 5 years that same townhouse can pay for another M3 and so on.....

[JasonCSU]

Originally Posted by momentum

in houston, tx, you can buy a $25000-$35000 townhouse

Wow, what kind of condition are those places in? That's incredibly cheap.

[momentum]

most are have minor problems that a little $$$ can fix....($5000)
paint, carpet, tiles, applicants

[48Laws]

I'm so glad people are not losing sight of my advice. Believe me, cash in the bank is your best security. Your mortgage will be there no matter what. Always pay yourself first. Nothing feels better than having $40k, for example, when your furnace blows up and your wife is home expecting.

[momentum]

if i cant fine a buyer to sell them "as is" then i fix them to sell or rent... cheap properties r easy to sell because most people have $20000-$40000 in bank.... any higher they would have to get a loan- and thats a diff can of worms.....

the BEST tip for the day is try to save $$$$ and buy a cheap house or townhouse to live- when its time for upgrade, sell the cheap houses for a profit..... that mean you live in the house for free and make $$$ when you leave....

i started with a cheap house, upgrade, upgrade, until now 4000 sqft house

[MediaArtist]

Originally Posted by JasonCSU

I'm guessing you'll probably say that one should still save up 20% in addition to some reserve cash.

Exactly.

We're on a forum we're people are driving $35,000 cars, and complaining about being able to save $40,000.

Somewhere, priorities are mixed up.

[MediaArtist]

Originally Posted by 48Laws

Regarding your FHA comments: the increase in FHA delinquencies is on par with the rate of increase in delinquencies with conventional loans. Lol. and???

Actually you are being dishonest, in the very link I posted earlier in the thread:
http://money.cnn.com/2012/07/09/real...cies/index.htm


... it shows that Fannie/Freddie, and privately held bank mortgage delinquencies are actually dropping (probably because their underwriting standards have become more strict since the economic collapse in 2008). FHA held mortgage delinquencies are rising extremely fast because they allow people to only put down 3.5% on a $300,000 home like YOU are suggesting. Putting down 3.5% on a $300,000 home is insanity. If you can only save up $11,000, you shouldn't be buying a home worth $300,000. The statistics undeniably show that people taking YOUR advice simply don't know what they are doing, and end up in foreclosure.

You can claim otherwise, but the data shows that FHA loaners are increasingly defaulting. FHA is going to implode fairly soon with people who acted on advice like you have given out. It's knuckle-headed, consumerist, garbage, that got many people in trouble from 2002-2008. Simply, some very horrible advice.

[MediaArtist]

Originally Posted by momentum

well in today situtation, if you lost your job or anything- you lose your house too.... now knowing that, its best if you only had a very little $$ in the house, you can walk away and not lose much...

a business man would hold as much cash as he can for a rainy day.

Yes, people can walk away from the house, and from their debt obligation, so that the rest of the U.S tax payers can pay for their idiotic decision to buy a home they couldn't really afford once FHA needs a bailout.

America. Yeah!

[ABQ325i]

Originally Posted by MediaArtist

Yes, people can walk away from the house, and from their debt obligation, so that the rest of the U.S tax payers can pay for their idiotic decision to buy a home they couldn't really afford once FHA needs a bailout.

America. Yeah!

I agree with MA here.

It's that kind of mentality which has attributed to the current economy. Get the biggest, most expensive house you can buy with little to zero down, don't worry if you can't afford it, someone else will take the hit if you stop paying.

That poster probably tells people who have negative equity in their property to stop paying because the bank will take a long time to foreclose and they can live for rent free.

[MrRoboto]

Originally Posted by MediaArtist

Exactly.

We're on a forum we're people are driving $35,000 cars, and complaining about being able to save $40,000.

Somewhere, priorities are mixed up.

Agree++

[IFX]

Originally Posted by MediaArtist

Exactly.

We're on a forum we're people are driving $35,000 cars, and complaining about being able to save $40,000.

Somewhere, priorities are mixed up.

lol. so true. I think too many people put a bit too much value into their cars.

[fitchesbass]

Originally Posted by MediaArtist

The Median household income for Washington D.C is $58,526, that's not extremely high, or even much higher than the national average of around $52,000.
http://quickfacts.census.gov/qfd/states/11000.html

The median sold price for a home is $449,000. We're talking a 7.6x income multiplier here.

Washington D.C is completely overpriced, and not a great deal according to empirical data, and economic fundamentals.

LOL. I didn't reference Washington DC - I referenced areas in the Washington DC Metro area. A lot of people live in the surrounding areas outside of the downtown Washington D.C in Northern VA and Maryland.

For example - I referenced Loudoun County. From your the same census date source the median income is $115,574. A lot of people that people that work for the government or support the government in some capacity live outside of Washington DC itself. Hence you have instances like Loudoun, Fairfax, and Howard counties where the incomes are very good.

Likewise for Loudoun the median sold price for a home was 495,000. That's a factor of 4.3. (http://quickfacts.census.gov/qfd/states/51/51107.html)

But aside from the pure numbers... there is more to doing analysis of an area than just looking a couple numbers from the census. Just looking at numbers and not knowing the context or area can be a dangerous thing. Some people look at data like that and take it like it's gospel. Not to mention that census data source has housing values that span the housing market collapse (2006 to 2010)... which I'm sure skews the statistics itself.

Biggest risk to DC area is government jobs. If the government starts cutting programs and positions.. this area could be hurting big time. Government related jobs are in large part what maintain the income around the DC area.

[fitchesbass]

Originally Posted by MediaArtist

Exactly.

We're on a forum we're people are driving $35,000 cars, and complaining about being able to save $40,000.

Somewhere, priorities are mixed up.

Won't disagree with you here! Though those 35k cars probably have a lein on them too.

[xtac]

The argument that you shouldn't put 3.5% down because you can default is moot.

There are reasons to put less money down, as there are reason to put more money down. It's a case by case basis.

In order to qualify for the FHA you first need a solid credit report/history as well as decent income. These same people putting 20% down could default as well. Sure data might show that those who have 20% down won't default at a rate of fha borrowers, but that's moot for the topic on hand.

We're now discussing personal investment situation, why buy a house anyway if you want to go there? it's just like the whole rent vs buy.

Yes, I agree many people do overextend themselves, it's human nature, and the practices of the bank didn't help. Greedy is what greedy gets.

OP said he does not have 20%, so I would still ask you to reconsider if what you are doing it right for you, given the homes are only 100k supposedly which is incredibly cheap compared to where most of us live it seems.

I myself don't like the idea of even taking a mortgage out, I'm one of the few who believe if you can't buy the house outright in cash you shouldn't buy it. But peoples have diff needs, and they don't teach these things in school.

Buying a big ass house can feel like a dream, until shit goes bad and you don't even enjoy it. i've seen to many people go through this.

Priorities need to be set up properly, but this is not the topic of discussion however these questions tie in greatly with other aspects of ones financial capabilities.

OP as you see, if you really want us to decide the best course of action for you we need details, employment, income, some background, credit history/scores, buying a house is not a simple thing, finding a house is just the beginning, the steps to buying a house begin with personal fundamentals, and it seems like you didn't ask yourself these questions so we can either stay on topic or simply hijack it with personal finance discussions.

[JasonCSU]

Originally Posted by MediaArtist

Exactly.

We're on a forum we're people are driving $35,000 cars, and complaining about being able to save $40,000.

Somewhere, priorities are mixed up.

While I still think not every home purchase necessarily requires 20% down (case by case basis as someone mentioned), I'll certainly agree with you on that point. I'd suspect many of those $35,000+ cars out there are on leases as well. Figuring out financial priorities seems to be a widespread problem for people across the US, most likely because they have never really been educated on it. Would it be that difficult for high schools to require students take a personal finance class?