OT - Anyone realtors or mortgage lenders on the board?

[huskerfan1414]

Moved since rates went up. Got a 6.75 rate and left 3%. Couldn't pass up the home and I figure I can refinance in a few years to 5 or so. Good news is we had a lot of equity in old home that I cashed in. Well over 100% of original purchase price. Paid for down payment and then some. Made the interest change hurt a little less.
For me, and my advice would be, it all depends on your emergency savings fund being able to accommodate for your new expenses with a higher mortgage. Will you have 6 months emergency fund, factoring in your new mortgage payment, after the sale of the previous house and the purchase of the new one? If so, go for it.
If I didn't have that, I would not have bought the home.

 

[RedBaloneyPony]

Moved since rates went up. Got a 6.75 rate and left 3%. Couldn't pass up the home and I figure I can refinance in a few years to 5 or so. Good news is we had a lot of equity in old home that I cashed in. Well over 100% of original purchase price. Paid for down payment and then some. Made the interest change hurt a little less.
For me, and my advice would be, it all depends on your emergency savings fund being able to accommodate for your new expenses with a higher mortgage. Will you have 6 months emergency fund, factoring in your new mortgage payment, after the sale of the previous house and the purchase of the new one? If so, go for it.
If I didn't have that, I would not have bought the home.

We are on the same page. Margins will be tighter but, I’m currently living under our means house wise and that’s how I’ve always intended to keep it, but I got the opportunity and I feel I will always regret it if I don’t go after it. New mortgage will be about 27% of our monthly income, no other debt but want to pound cash into IRAs and college funds as well.

 

[huskerfan1414]

We are on the same page. Margins will be tighter but, I’m currently living under our means house wise and that’s how I’ve always intended to keep it, but I got the opportunity and I feel I will always regret it if I don’t go after it. New mortgage will be about 27% of our monthly income, no other debt but want to pound cash into IRAs and college funds as well.

Good deal. 27% is high but there are other factors that should be weighed.
Of course emergency savings need to be kept separate from retirement, spending, and education accounts. And I know I've suggested this before, but I advise people to be sure they are funding their retirement first over their kids' college.
The best thing fathers can provide kids is 1) to Love the wife, 2) to Love the kids, 3) a roof over their head with food in front of their face and no threat of losing either and 4) Freedom in adulthood without having to take care of parents financially later in life. College education won't make up for missing any of those four above.

(I would personally have faith as #1 but that is not as statistically studied as #1 and is controversial and I'd rather not start that.)

 

[RedBaloneyPony]

Good deal. 27% is high but there are other factors that should be weighed.
Of course emergency savings need to be kept separate from retirement, spending, and education accounts. And I know I've suggested this before, but I advise people to be sure they are funding their retirement first over their kids' college.
The best thing fathers can provide kids is 1) to Love the wife, 2) to Love the kids, 3) a roof over their head with food in front of their face and no threat of losing either and 4) Freedom in adulthood without having to take care of parents financially later in life. College education won't make up for missing any of those four above.

(I would personally have faith as #1 but that is not as statistically studied as #1 and is controversial and I'd rather not start that.)

All good points. What’s a good percentage for a mortgage? When I say 27% that’s including taxes/insurance if it mattered. Obviously 0 % is my goal someday!

 

[TampaBaySkers]

Lenders are having to get creative to get people to buy sooner instead of waiting for rates to come down. Good relationship builder.

Of course lenders want to sell you a “free” refinance.. pay nothing but interest for 3 years then do it all again for another 5 years.. 8 years of payments going to pretty much all interest and no principal. Sounds like a huge benefit 🤣🤣

 

[TampaBaySkers]

All good points. What’s a good percentage for a mortgage? When I say 27% that’s including taxes/insurance if it mattered. Obviously 0 % is my goal someday!

27% of gross or take home income?

 

[Denvrhuskr]

Of course lenders want to sell you a “free” refinance.. pay nothing but interest for 3 years then do it all again for another 5 years.. 8 years of payments going to pretty much all interest and no principal. Sounds like a huge benefit 🤣🤣

Don't know what you are talking about? These loans aren't interest only, the rate is bought down by seller contribution. There is principle and interest being paid. Then the lender refinances you at no charge. You are looking for a negative where there isn't one. The lenders need the business now so they are willing to do some business later at no cost. When rates come down, there is very likely going to be a pretty good amount of buyers back in the market. Demand has been artificially held down by high rates, so they will be busy and making some decent money again. By the way not a lender. So if I am not explaining this well enough, maybe talk to a lender and have them do a better job.

 

[dsmalls3]

Like many have said, don’t be shocked if there’s 5% rates later next year. If the economy starts showing serious recessionary signs (no where near yet), the fed wont cut 50bps, they’ll cut 200bps and you’ll immediately have 5% 30yr mortgage rates again and can refi

If we see a serious recession next year, home prices will go down a good chunk and you’ll lose money. If we don’t see a serious recession rates will stay locked 7 or higher and home prices will stay flat for long periods of time and you’ll still lose money.

Macroeconomic factors will lead to a decade or more of high inflation and high interest rates. Buying a home long right now you are almost guaranteed to get rekt.

Buying a home today is an investment with a negative ROI and the risk adjusted returns are horrible. Correction: they don’t exist. Primary residences were breakeven to begin with even in this last 3 decade regime of low inflation, low interest rates. And that regime is gone for good. Rent for a year or two, pay half what you would on your mortgage, and invest the other half in crypto (I’m serious). Sell crypto top on 2025, then reevaluate at that time. Every mortgage payment you will make is gone, with risk to lose more. Might as well pay 1/2 that amount for rent and invest in something with real returns (by real I mean it net beats inflation). If SPX hits 4550, dump into a market melt up, if not short it by holding liquid money market funds and have dry powder for an equities correction. Once 10-15% down move comes, load up on tech equites with a focus in AI.

Buying a family home has many life benefits that are fantastic, so if you buy today, do it for that reason. But unless you are finding something below FMV maybe….nm, if you buy a home with the plan to hold for a decade right now, you will almost for sure get rekt. We might have one more bull left this decade, but after that it is nothing but bad news.

So don’t try and talk yourself into thinking you are making a good financial investment. You are not. Lifestyle sure. And that can be fine, but important to understand and be honest with yourself.

 

[dsmalls3]

Don't know what you are talking about? These loans aren't interest only, the rate is bought down by seller contribution. There is principle and interest being paid. Then the lender refinances you at no charge. You are looking for a negative where there isn't one. The lenders need the business now so they are willing to do some business later at no cost. When rates come down, there is very likely going to be a pretty good amount of buyers back in the market. Demand has been artificially held down by high rates, so they will be busy and making some decent money again. By the way not a lender. So if I am not explaining this well enough, maybe talk to a lender and have them do a better job.

Great financial advice - talk to a lender who has seen like an 80% drop in his loan business the last 2 years and is trying to sell you a loan…😅

There are two actual negatives here:
1) rate cuts due to recession also means risk of home prices dropping. Who cares if your rate is cut 2% if you’ve lost 50-100% or your down payment equity and have to pay to refinance. And would you even be able to refinance with 10% or less equity in the home?
2) Recession does not come and so Fed keeps prime rates at 5% or worse for the rest of this decade

Also demand is being driven down by high rates, but so is supply. You are right though, loan activity would increase with lower rates. But still risk of 1.

 

[TampaBaySkers]

Don't know what you are talking about? These loans aren't interest only, the rate is bought down by seller contribution. There is principle and interest being paid. Then the lender refinances you at no charge. You are looking for a negative where there isn't one. The lenders need the business now so they are willing to do some business later at no cost. When rates come down, there is very likely going to be a pretty good amount of buyers back in the market. Demand has been artificially held down by high rates, so they will be busy and making some decent money again. By the way not a lender. So if I am not explaining this well enough, maybe talk to a lender and have them do a better job.

You obviously don’t know how a 30 year mortgage is amortized.

 

[dsmalls3]

You obviously don’t know how a 30 year mortgage is amortized.

“There is no such thing as a free lunch” applies here.

These “free” refinances are being paid somewhere, possibly not by the home buyer. But if the home buyer is not paying the actual loan origination fee, they are “paying” for it with a shit load of risk

 

[dsmalls3]

I had to move this year.

Sold a house I bought in 2016. It got in a bidding war.

Was somewhat fortunate to move to place with new houses being built. Builder paid down the rate to 4.75%

I left a 3.5% rate.

I think I did about as well as I could.

3.5 to 4.75 ain’t bad at all.

Curious….how many years are builders buying down the rates?

 

[drubendall]

3.5 to 4.75 ain’t bad at all.

Curious….how many years are builders buying down the rates?

You’re the guy who pontificated about Covid vaccines ad nauseam, correct?

 

[RedBaloneyPony]

27% of gross or take home income?

Take home

 

[RedBaloneyPony]

If we see a serious recession next year, home prices will go down a good chunk and you’ll lose money. If we don’t see a serious recession rates will stay locked 7 or higher and home prices will stay flat for long periods of time and you’ll still lose money.

Macroeconomic factors will lead to a decade or more of high inflation and high interest rates. Buying a home long right now you are almost guaranteed to get rekt.

Buying a home today is an investment with a negative ROI and the risk adjusted returns are horrible. Correction: they don’t exist. Primary residences were breakeven to begin with even in this last 3 decade regime of low inflation, low interest rates. And that regime is gone for good. Rent for a year or two, pay half what you would on your mortgage, and invest the other half in crypto (I’m serious). Sell crypto top on 2025, then reevaluate at that time. Every mortgage payment you will make is gone, with risk to lose more. Might as well pay 1/2 that amount for rent and invest in something with real returns (by real I mean it net beats inflation). If SPX hits 4550, dump into a market melt up, if not short it by holding liquid money market funds and have dry powder for an equities correction. Once 10-15% down move comes, load up on tech equites with a focus in AI.

Buying a family home has many life benefits that are fantastic, so if you buy today, do it for that reason. But unless you are finding something below FMV maybe….nm, if you buy a home with the plan to hold for a decade right now, you will almost for sure get rekt. We might have one more bull left this decade, but after that it is nothing but bad news.

So don’t try and talk yourself into thinking you are making a good financial investment. You are not. Lifestyle sure. And that can be fine, but important to understand and be honest with yourself.

I’ve got 40-50 years left on earth, I’m buying this place to live a life with my family. Not going to worry about counting crypto with my kids shivering in some cracked out rental lol

 

[TampaBaySkers]

3.5 to 4.75 ain’t bad at all.

Curious….how many years are builders buying down the rates?

They were just buying down the rate for a few years … that doesn’t work anymore so they are doing these terms at 30 year fix rates. Median sale price on a new home is DOWN 16% from last October 😱

 

[TampaBaySkers]

Take home

That ain’t a bad spot to be at all. A lot of todays buyers are closer to 40-50% which is just crazy.

 

[litespeedhuskerfan]

That ain’t a bad spot to be at all. A lot of todays buyers are closer to 40-50% which is just crazy.

I do not believe banks such as FNB would even approve you at this level of debt to income...

 

[TampaBaySkers]

I do not believe banks such as FNB would even approve you at this level of debt to income...

My lender gave me the green light up to 50%. No way we would do that .. granted we don’t have any other debts

Housing Costs Now Make Up Almost 40% of the Average Household Income

Home affordability has hit all-time lows. Here are practical steps you can take to reduce housing costs.

www.fool.com

 

[litespeedhuskerfan]

My lender gave me the green light up to 50%. No way we would do that .. granted we don’t have any other debts

Housing Costs Now Make Up Almost 40% of the Average Household Income

Home affordability has hit all-time lows. Here are practical steps you can take to reduce housing costs.

www.fool.com

Wow...skimmed that article...wild.

I think more people are comfortable carrying debt levels we'd never consider....as in I wouldn't be able to sleep.

I've only used First National so I can only speak to that experience....but if our debt to income would have been at the levels you're talking about in that article they wouldn't have even answered our ph calls.

 

[RedBaloneyPony]

That ain’t a bad spot to be at all. A lot of todays buyers are closer to 40-50% which is just crazy.

Yeah no way I would do that. I’ve always tried to stay under 25% take home. Hoping that as we grow in our careers we will advance

 

[TampaBaySkers]

Wow...skimmed that article...wild.

I think more people are comfortable carrying debt levels we'd never consider....as in I wouldn't be able to sleep.

I've only used First National so I can only speak to that experience....but if our debt to income would have been at the levels you're talking about in that article they wouldn't have even answered our ph calls.

People have bought into the realtor/lender mantra of marry the house & date the rate. We’ll see how it turns out, but if rates don’t drop over the next couple years + unemployment going up above 5% then we should see some distressed sellers

 

[Huskers123456]

I’ve got 40-50 years left on earth, I’m buying this place to live a life with my family. Not going to worry about counting crypto with my kids shivering in some cracked out rental lol

100% this. I don't get why everyone these days thinks their primary residence has to be a huge money making investment. People have gotten greedy.

 

[TampaBaySkers]

100% this. I don't get why everyone these days thinks their primary residence has to be a huge money making investment. People have gotten greedy.

2008 changed people’s perceptions… your primary residence can wipe you out if you’re too foolish.

 

[dinglefritz]

If we see a serious recession next year, home prices will go down a good chunk and you’ll lose money. If we don’t see a serious recession rates will stay locked 7 or higher and home prices will stay flat for long periods of time and you’ll still lose money.

Macroeconomic factors will lead to a decade or more of high inflation and high interest rates. Buying a home long right now you are almost guaranteed to get rekt.

Buying a home today is an investment with a negative ROI and the risk adjusted returns are horrible. Correction: they don’t exist. Primary residences were breakeven to begin with even in this last 3 decade regime of low inflation, low interest rates. And that regime is gone for good. Rent for a year or two, pay half what you would on your mortgage, and invest the other half in crypto (I’m serious). Sell crypto top on 2025, then reevaluate at that time. Every mortgage payment you will make is gone, with risk to lose more. Might as well pay 1/2 that amount for rent and invest in something with real returns (by real I mean it net beats inflation). If SPX hits 4550, dump into a market melt up, if not short it by holding liquid money market funds and have dry powder for an equities correction. Once 10-15% down move comes, load up on tech equites with a focus in AI.

Buying a family home has many life benefits that are fantastic, so if you buy today, do it for that reason. But unless you are finding something below FMV maybe….nm, if you buy a home with the plan to hold for a decade right now, you will almost for sure get rekt. We might have one more bull left this decade, but after that it is nothing but bad news.

So don’t try and talk yourself into thinking you are making a good financial investment. You are not. Lifestyle sure. And that can be fine, but important to understand and be honest with yourself.

You lost me at the Crypto comment. Crypto is a speculative vehicle with no actual value basis other than other people pouring real dollars in to it.

Homes have never been a great investment but for some people it’s the only way they would have enough discipline to invest in anything. There’s also the quality of life factor that home ownership can afford families. It’s a more complicated subject than strict ROI. IF it makes you put money away that you would otherwise spend on cars and other toys it’s probably a great investment.

As we’ve seen the past 5 years one positive of home ownership is a hedge against inflation. Right now there’s a large shortage of the 3 bedroom starter home and experts see no way that changes any time soon. Rents are ballooning and we’ve let over 3 million illegals in to this country many of whom are sucking up low end housing.

 

[redli]

I would say that almost no one ever makes money on a house, especially if you factor in opportunity cost. Buy it because you want to live there, raise a family there, like the neighborhood, etc. but if you buy with an eye towards making money and you really do the calculations, you won't be making any money. Maybe look at it like a forced savings account as you build equity, but don't even start to think about it once you factor in maintenance.

 

[BTF69]

Homes are a great investment for the next generation. Which is totally fine because the home also serves a purpose for the current generation.

My parents house will always be "my home" and when they die it will be hard to sell in the sentimental sense but it will create wealth for me and my siblings.

My parents house was bought for 70K and will be sold for 400-450k. But that is not profit that they will ever see, nor do they want it, that house was purchased to raise a family.

Also, stop investing in crypto. With that said, Crypto is a wild ride!!!


NVDA, that is the stock. That ****ing thing will hit 5000.

 

[litespeedhuskerfan]

I would say that almost no one ever makes money on a house, especially if you factor in opportunity cost. Buy it because you want to live there, raise a family there, like the neighborhood, etc. but if you buy with an eye towards making money and you really do the calculations, you won't be making any money. Maybe look at it like a forced savings account as you build equity, but don't even start to think about it once you factor in maintenance.

I guess the 90k I made on my last house in a 4 year period wasn't real. Weird.....because First National accepted that for a deposit and credited my account for it.

No idea what opportunity cost means but I do understand you yave to live somewhere and apartment rents now equal a house payment so when you factor in how the real world works....it's a great investment...but investment doesn't have to mean just dollar signs. Better quality of life...raising a family with a yard to play in just to name a few.

 

[BTF69]

I guess the 90k I made on my last house in a 4 year period wasn't real. Weird.....because First National accepted that for a deposit and credited my account for it.

No idea what opportunity cost means but I do understand you yave to live somewhere and apartment rents now equal a house payment so when you factor in how the real world works....it's a great investment...but investment doesn't have to mean just dollar signs. Better quality of life...raising a family with a yard to play in just to name a few.

I think this is where people get lost. I totally agree with you.

 

[HBK4life]

I guess the 90k I made on my last house in a 4 year period wasn't real. Weird.....because First National accepted that for a deposit and credited my account for it.

No idea what opportunity cost means but I do understand you yave to live somewhere and apartment rents now equal a house payment so when you factor in how the real world works....it's a great investment...but investment doesn't have to mean just dollar signs. Better quality of life...raising a family with a yard to play in just to name a few.

Exactly. The 80k I made on my first house I put down on my second house. That's why my monthly mortgage payments are lower than most pay for rent in this crazy market. You have to live somewhere. And for people that hate apartments and roommate living, having your own house is the way to go. Apartments can raise the cost of rent for no reason and usually do because they know some people have no choice. Middle class is being priced out of the housing market right now and it's a damn shame.

 

[WHCSC]

NVDA, that is the stock. That ****ing thing will hit 5000.

Buying now. How much should I get?

 

[king_kong_]

oops Mr Cooper was hacked last week and millions of customers couldn't pay their mortgage for 4 days

very likely tons of personal info was stolen

you're hearing about it on the NU football message board because there's no such thing as "the news" anymore

have a great day, suckers!

 

[litespeedhuskerfan]

oops Mr Cooper was hacked last week and millions of customers couldn't pay their mortgage for 4 days

you're hearing about it on the NU football message board because there's no such thing as "the news" anymore

have a great day, suckers!

Unrelated, sort of (last week's ACH snafoo for payroll at several large banks)

My wife, who is in administration at Methodist...was not affected but had co workers that were....dude what i'm about to type I cannot believe but its true...they were literally sharing outloud they couldn't put gas in their car Friday morn on the way to work because they needed that paycheck to do so. Unfreaking real somebody with a pro job could be in that position..and even weirder they'd admit it. Openly. Some people are so bad with money they'll never get on top of their finances no matter how much they make.

 

[BTF69]

Buying now. How much should I get?

Well, if you are poor like me...just a few shares at a time!

 

[BTF69]

Exactly. The 80k I made on my first house I put down on my second house. That's why my monthly mortgage payments are lower than most pay for rent in this crazy market. You have to live somewhere. And for people that hate apartments and roommate living, having your own house is the way to go. Apartments can raise the cost of rent for no reason and usually do because they know some people have no choice. Middle class is being priced out of the housing market right now and it's a damn shame.

Now, I would recommend to people right out of HS or college...

Get a house with 2-3 friends instead of an apt.

I had friends live with me when I got my first house. I think my mortgage was 850 and those guys were paying me a total of 1100 a month. It was a win-win.

 

[Chief Wiggum]

Unrelated, sort of (last week's ACH snafoo for payroll at several large banks)

My wife, who is in administration at Methodist...was not affected but had co workers that were....dude what i'm about to type I cannot believe but its true...they were literally sharing outloud they couldn't put gas in their car Friday morn on the way to work because they needed that paycheck to do so. Unfreaking real somebody with a pro job could be in that position..and even weirder they'd admit it. Openly. Some people are so bad with money they'll never get on top of their finances no matter how much they make.

Ha I really did laugh out loud reading your comment. My wife and I have said the exact same thing many times. We live in a pretty nice area of the Denver metro area (Parker)....our neighborhood's average jome prices are prob 800k, maybe more. The outward appearance of our neighborhood is that it is an affulent area with residents that are somewhat wealthy....but I know deep down, when I look at all the houses in the neighborhood...prob 25% at a mininum, likely higher, are leveraged to the hilt and live month to month in their expensive homes. I wish financial literacy was a required class in high school and/or college, so many people make decisions that are crippling them financially short and long term.

 

[HBK4life]

Look at the difference between 3 and 7 percent. It's insane. If I hadn't locked in at 3 percent 3 years ago I would be fuming at what has happened. Nobody in their right mind is going to sell now and trade a 3 percent for a 7 or 8.

 

[BTF69]

Look at the difference between 3 and 7 percent. It's insane. If I hadn't locked in at 3 percent 3 years ago I would be fuming at what has happened. Nobody in their right mind is going to sell now and trade a 3 percent for a 7 or 8.

View embedded media

It is staggering. It really is.

 

[HBK4life]

It is staggering. It really is.

When my parents bought in 1977 it was over 10 percent, but they built a new house for 67k. You can't buy a brand-new truck for that cheap today. Inflation is out of control and needs fixed ASAFP!! 2024!!

 

[redli]

I guess the 90k I made on my last house in a 4 year period wasn't real. Weird.....because First National accepted that for a deposit and credited my account for it.

No idea what opportunity cost means but I do understand you yave to live somewhere and apartment rents now equal a house payment so when you factor in how the real world works....it's a great investment...but investment doesn't have to mean just dollar signs. Better quality of life...raising a family with a yard to play in just to name a few.

Correct, it's not real in the sense that it was actual profit. Add up the maintenance cost, utilities, etc. that are more than if you rented and how much was equity from your down payment? It's real in that it's real money, but it's also lost opportunity. Opportunity cost means what you gave up to sink that money into a house. If you did something else with 500k, or whatever the house cost, would you have made more than 90k in that same period. That's opportunity cost.
I already covered your other points, I'm not saying don't buy a house, but uy it for those other reasons, not with the expectation that they'll get rich off it. If they happen to be in a rare situation, like you bought a house in Boise in 2018 and cashed out during the WFH craze during covid then maybe you can show a real profit, but most people can't do that since it's mostly luck involved for the regular homeowner.