Is now the time to buy a home or wait it out? (1 Viewer)

[KurtEP]

Yup.


While I see a need for bailout on some level (not sure of the specifics, though), I also think that if your bank gets bailed out, the management should be tossed out and a new team brought in. No sense letting the same group of idiots do the same thing again later.

Plus, having that much exposure to subprime securities during an obvious bubble is almost criminally idiotic. Gotta be a breach of some duty or the other. Wouldn't bother me at all if they tossed a few of the executives in jail for a while. I always thought it was funny that if I go kill some dirtbag whose mother doesn't even miss him after he's gone, I could get the death penalty, but if I do my best to wreck the economy and cause a recession and billions of dollars of losses to people all over the world, I can retire on my bonuses. :frowning:

 

[Philip Hamm]

And that's what happened to Bear Sterns, why they are being sold to another firm.

 

[MarkMel]

Exactly, we were pre-approved for an amount that was way above what we could afford and we did the responsible thing. Had I known we would've been bailed out, maybe I would've went for the whole nut.

We are a country of entitled, not my responsibility people.

 

[Eric_L]

the bail out really isn't for the homeowners, nor is it for the banks who originated the loans. It is mostly for the entities who bought securities thinking they were conservative investments collateralized by mortgages that had been properly underwritten which turned out to be worthless junk.

The irony in all this is - many of the 'sub prime' loans were caused by... da gubment! HUD kept reinforcing and encouraging the need to lend to low-income borrowers. They shrank down payments, shrank income requirements, etc. The whole industry followed suit and went through their own irrational exhuberence, but da gubment's role is irrefutable. (Yet we have people who not only disregard this - they tell us that da gubment is the only people who can fix it!)

The victims are the lower income borrowers who don't really understand what they got into. For some of us terms like points, ARM, rate lock and index all seem simple enough, but for many it is Greek. All they know is that a loan Officer told them they could afford a house, and three years later their mortgage payment tripled...

The solution is more stringent underwriting guidelines. Lower income borrowers may not be able to buy houses as large or at all, but they will be put in affordable mortgages.

IMHO what this country really needs is simplification. Every time the shit hits, they invent more and more disclosures and forms. Trouble is, that there are so many, soon people can't see the trees for the forest. Less can be and should be more.

On mortgages; eliminate all fees and have a single lump sum cost for a loan combined with a single rate. Eliminate negotiations; you can't negotiate for life insurance, should be the same for a mortgage. Qualify ARMS on the highest rate range. Allow recourse against the commission for loan originators of loans which default within the first 3 years. Create a firewall between appraisers and loan originators. I could go on and on...

 

[BrianW]

Exactly. People lost (and are still losing) homes because of this. They and the banks that lent them the money are just going to have to deal with the loss, because nobody's coming to help them (loan and interest rate re-negotiations notwithstanding). In this case, if the bailout takes place, at least it's not bailing out the "culprits" who perpretrated this mess.

And also keep in mind that there is a zero-sum component in all of this. There are winners as well as losers in this mess. Investors who lose money on stocks during a downturn on Wall Street often end up selling to investors who end up making a tidy profit on those stocks. Likewise, for every one who has tragically lost a house, there will (eventually) be someone who will acquire that house at a good price. Yes, some lose out, but their loss is largely another's gain, and people like Kurt can benefit. This is, to my way of thinking, the way it should work.

 

[todbnla]

Some good points here gents, keep it flowing, several more homes on tap this weekend to view, getting close to the offer stage...


PS-FWIW, not to derail my own topic, this entire oil thing, well lets just say; "area 57"...

 

[Eric_L]

Right on bro.

In the offer stage don't forget about concessions!!!! Price is one thing, but some people won't consider things like paying closing costs, new carpet, appliances, etc. Those sorts of things are good for counter-offers. If the buyer does not take your first offer, increase your price, but add concessions that make up for it. It is a BUYERS market - play your cards that way.

Also - seriously consider a home inspection. For $500 or so they can find all sorts of things you may miss. In my case they found a roof that was past it's lifespan and the seller ended up having to pay for a replacement. They had already agreed on a price with me, and they couldn't back our because the roof problem was now a disclosable feature (once discovered)... Got a new roof for that $500 fee.

 

[Radioman970]

(subscribing)

 

[BrianW]

Sorry, I meant to say "Todd", not "Kurt". So, Kurt, if you went out last night and bought a house based on what I said, um... sorry about that. Didn't mean to make you do that. Hope you got the color you wanted.

 

[Lew Crippen]

I find this a very interesting thread—especially when I went back a few years (2005) and looked up a thread started by another HTF member who wanted to buy a home. There was a lot of good advice from many members.

I remembered this thread because there were a few who thought that a mortgage with nothing down was a good idea and when I wrote that IMO, if you could not afford to put down 10%–20%, you could not afford the house, there were two other posters who thought that was ‘old-school’ thinking.

Perhaps so, but old-school on finances is not necessarily such a bad thing. And to be accurate, most of the posters did not view zero down as a good thing—and there were several who wrote about the problems with refinancing when the housing market bubble went south.

 

[KurtEP]

D'oh!

Something I stumbled on this morning. Linking it more so I'll remember to look at it later than anything. Usual caveats about the source (and as I only very briefly skimmed it, the usual disclaimers about that, too).

Subprime mortgage crisis - Wikipedia, the free encyclopedia

 

[Matt Stryker]

I read this recently:

Irvine Housing Blog

Sort of humourous, sort of true. I certainly wouldn't recommend doing the stuff under "If You're Really Tough" but again, a few years ago sellers were putting exactly that kind of crazy stuff into dealings.

 

[Philip Hamm]

Now I'd love a link.

 

[Lew Crippen]

http://www.hometheaterforum.com/htf/...rst-house.html

My post is #39

 

[Eric_L]

I'm reminded of this;

 

[todbnla]

Good info here! Yeah, we plan to get an inspection upfront although the home was built in 2002 so other than just some basic updating like; paint, light fixtures, and some emerald green carpet that needs to be pulled, were pretty good, we feel. We plan to offer $40k off of the asking price in the initial offer since the home has been on the market in excess of a year. We feel the concessions mentioned above should pan out in the 2nd or 3rd round of negations if need be. The majority of this purchase will paid for by the property we currently live in which is a totally renovated (compliments of Katrina at a cost of $100k) duplex which will become two rental properties. We already have 1 tenant lined up and a possible second as well.

 

[KurtEP]

The rental market around me has been booming thanks, probably, to the housing market (not like people are lining up to move here). Having a rental property like that is an excellent way to bootstrap yourself to wealth. I know a couple of guys who have had great success with that. One of them no longer even works, he just lives off his rentals and spends his time maintaining them.

 

[DaveF]

So what do people think about 5%, 10%, 20% down these days? When I bought, I bought a house for which I could pay 20% up front -- I wasn't going to have any PMI.

The past year, I've been paying a bit extra towards the principal, but
I'm realizing that doesn't make much financial sense. Do people do that these days: pay ahead on their mortgage to try and help reduce the long term mortgage? Three years ago, there was no point: you made more in appreciation just waiting. Unless you live in upstate NY where housing has been almost flat for 30 years...

 

[mylan]

Paying a bit extra on the principal can only help the situation, i've been told an extra mortgage payment a year can reduce a 30 yr. to about 23 yrs. although we haven't been able to do that yet. We bought in 2004 at the height of the boom with a bit more than the 20 % down but taxes and insurance seem to be eating up more of the mortgage pie these days. We were adament about not paying PMI though.

 

[Adam Lenhardt]

Western New York. There's some places like Saratoga that continue to soar higher even against the market collapse.