Real Estate market
- Thread starter Pete
- Start date
Toxick
Splat
Update:
What a god damned waste of my ####ing time.
I should have known better than to expect that all these people sending me junk in my mailbox, letter after letter begging for my business, would ACTUALLY want my business.
At least I had the satisfaction of telling several people that if they don't want my business, keep their #### out of my mail.
What a god damned waste of my ####ing time.
I should have known better than to expect that all these people sending me junk in my mailbox, letter after letter begging for my business, would ACTUALLY want my business.
At least I had the satisfaction of telling several people that if they don't want my business, keep their #### out of my mail.
ceo_pte
New Member
It's a great market, but there is no need to sale your home unless you are planning on moving out of the area. Otherwise, after you stick it to some poor soul, you will then be in the same situation. The prices will only hold as long as people can afford it too. With interest rates creeping back-up, the prices will start settling out.
I was recently told that in 1965 you could not count your wifes income when qualifying for a home loan. The reason being that she may get preagnant.
I find it amazing that today they will count your income, your wifes, your children, 401 K, your dogs, etc.... I see most people stretching themselves to the max just to be able to afford the mortgage. I forsee alot of foreclosures coming within the next few years.
I was recently told that in 1965 you could not count your wifes income when qualifying for a home loan. The reason being that she may get preagnant.
I find it amazing that today they will count your income, your wifes, your children, 401 K, your dogs, etc.... I see most people stretching themselves to the max just to be able to afford the mortgage. I forsee alot of foreclosures coming within the next few years.
crabcake
But wait, there's more...
that's good investment potential for folks looking for real estate as a place to stick their money for the long term.
Sux for those being foreclosed on, but if someone's gonna be stupid enough to stretch themselves too thin and possible lose their house due to their own stupidity, more power to those who buy it up, turn it around and rent it for a long-term investment. :shrug:
ceo_pte
New Member
I wouldn't do it unless I had no other options. I see peole doing this all the time and if baffles me. Yes it does free up some money and it doesn't really effect your mortgage that much, but for God sakes you will be paying for your car for the next 30 years... I know this is hypothetical, but I tell the people that I advise to get their finances under control (ie. their spending) before they think of taking another loan. For example, I heard of someone rolling the cost of blinds ($3000.00) into their mortgage. I have no idea how much they will end up paying for those blinds, but I can guess it will be in the neighborhood of $10,000.00. It will always be pay me now or pay me later! I think alot of people dwell on immediate gratification versus setting a goal, saving the money, then going and buying the object with cash.
ceo_pte
New Member
Originally posted by tatercake
that's good investment potential for folks looking for real estate as a place to stick their money for the long term.
That's why I like the book, 'The Richest Man in Babylon'. It says in the book that even if you took all the money in the world and distributed it evenly among everyone, within a short period of time the same wealthy-minded individuals who had it before would get it again. I think the concept is commonly referred to as the 80/20 principle.
SmallTown
Football season!
Two things that NORMALLY don't make sense in a normal market are perfectly fine currently.
1) Rolling in extra costs to mortgages
2) Interest only mortgages
With the values increasing at an alarming rate, there really isn't a need to avoid the above two things as long as you feel the markets will continue to rise or if you plan to sell in a few years. Again it is a gamble, but so is just about every other investment out there.
ceo_pte
New Member
One persons opinion! The fact is that if you roll it into your mortgage you will pay at least 2-3 times more for it. An interest only mortgage! Yeah, I heard of that recently too. I think it's pathetic. With interest rates going up housing price increases will slow down. Not to mention the only thing that maintains the house prices is salaries. Salaries have not gone up nearly as much as the price of homes. It will come to a halt and I pitty the person who has refinanced all these things into their mortgage. It will stink when they owe more on their house than they can sell it for.
The problem with this is that you will never own anything. It's like leasing a car. The only reason leasing is so popular is b/c people can't afford to buy a car.
RangerJohn
New Member
The real estate market will not slow down in Southern Maryland for a couple of reasons.
1) As long as NAVAIR keeps building and building and putting more infrastructure at NAS Pax....people will come. I went to Pax instead of San Diego because I was being offered significantly more money to come to Pax than I was in SoCal. While there may not be a lot of "entry-level" positions, if you have some skills, you will be compensated well.
2) St Mary's, Calvert, & Charles are rapidly becoming bedroom communities of DC. Let's face it, SOMD has been discovered, and you can buy a nicer home at a more reasonable price than in say Bowie.
I contracted for my home in Mariners Cove a little over 3 years ago...paid $205K when it was all said and done. Just sold it last month for a little over $300K, and moved to Chesapeake VA. (That is a pretty wild market there now too!)
As for all the "creative" financing, well, it is a gamble, or risk, but for the next 2-3 years, this area is going to be a tight real estate market....and you will still have something to show for your investment, unlike your average Enron shareholder. Get the most house you can afford, while you can!
1) As long as NAVAIR keeps building and building and putting more infrastructure at NAS Pax....people will come. I went to Pax instead of San Diego because I was being offered significantly more money to come to Pax than I was in SoCal. While there may not be a lot of "entry-level" positions, if you have some skills, you will be compensated well.
2) St Mary's, Calvert, & Charles are rapidly becoming bedroom communities of DC. Let's face it, SOMD has been discovered, and you can buy a nicer home at a more reasonable price than in say Bowie.
I contracted for my home in Mariners Cove a little over 3 years ago...paid $205K when it was all said and done. Just sold it last month for a little over $300K, and moved to Chesapeake VA. (That is a pretty wild market there now too!)
As for all the "creative" financing, well, it is a gamble, or risk, but for the next 2-3 years, this area is going to be a tight real estate market....and you will still have something to show for your investment, unlike your average Enron shareholder. Get the most house you can afford, while you can!
W
wmsaunders
Guest
I am a Mortgage Loan Officer here in So MD and the interest only products are very intriging to many home purchasers. Think about it for a second, the normal ammortization schedule of a home mortgage only allows the buyer to pay mostly interest anyway for the first 10 years of the mortgage. With todays escalating home prices, why not go interest only? It allows the new home buyer an opportunity to purchase a nice home for an affordable payment and avoid the sticker shock that often comes with it.
Oz
You're all F'in Mad...
Interest-only mortgages have their place. Unfortunately, I don't know that the place is in an inflated real estate market like Southern Maryland. Maybe it will continue to go up - maybe not.
Where they do make sense is for real estate investors who want to keep their full capital working for them without having cash tied up in their investment property. They can really put their monthly rent payments to work with an interest-only mortgage. They also might make sense for short-time homebuyers in the right market.
If you're going to use an interest-only mortgage to buy a house you couldn't otherwise afford, it sounds like a really bad idea.
Proceed with caution - your mileage may vary.
Where they do make sense is for real estate investors who want to keep their full capital working for them without having cash tied up in their investment property. They can really put their monthly rent payments to work with an interest-only mortgage. They also might make sense for short-time homebuyers in the right market.
If you're going to use an interest-only mortgage to buy a house you couldn't otherwise afford, it sounds like a really bad idea.
Proceed with caution - your mileage may vary.
W
wmsaunders
Guest
The interest only period is usually only for the first 5 or 10 years. And like I said, check your ammortization schedule and find out how much principle is actually applied to your mortgage during the first 10 years and then get back to me. You'll be surprised at how much principle is being paid.
Dont get the wrong idea, I agree that it's not for everybody - but for a first time homeowner who is in the early stages of his prime financial earning years and wants a "nice" home in a neighborhood that may be out of his/her price range - it often fits the bill and helps them get into that home affordably for the first 3-5 years before refinancing into a more conventional loan after the property earns some equity.
I've satisfied many a client with interest only products. Not for everyone - but the shoe fits many borrowers in this day of high property values. There is a big difference between a $265,000 home and a $300,000 home here in Calvert County and "interest only" loans can help a borrower make up that difference.
No matter how you slice it, you've got have a little bit of a "river boat gambler" in you to get into an ARM or an INTEREST ONLY loan program but as long you understand and have assesed the risks involved it could work to your advantage.
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Thank you, but I am very much aware of how financing works and know how much principle is being paid. I do look at the amortization schedule for my loans. I refinanced my first house for a 15 year loan and paid it off in less than that.
If you are a first time home buyer and looking beyond your means, you are setting yourself up for a fall. You are banking upon the property rising in value enough to be able to now afford the house while the bank is raking in the interest. I think you are giving very dangerous and unsound advice, but that is my opinion.
I find it incredible that a first-time buyer (that IS what we've been talking about) is looking to purchase a $300k house. I think its unfortunate that you and others are preying upon the "keep up with the Joneses" mentality in order to secure loans for more than people can comfortably afford.
Again, asking a first-time home buyer to gamble on $300k+ is in my opinion very fool-hardy advice. The only one I see who can work this towards their advantage is the mortgage broker or, as Oz said, the investor who wants to keep up their cash flow.
Let's do the math using very rough numbers. Using your "interest-only" for 5 years on a $300,000 home, the homeowner will have paid about $1,800 a month in interest only. After 5 years, that comes to about $110,000 in interest alone. Now they refinance to a more conventional loan for another 30 years say at 7%. Now they're paying another $420,000 in addition to the $110,000 they've already paid. So that $300,000 house is now costing $830,000. What happens if interest rates go up in those 5 years? Cha-CHING! Start shelling out even MORE money for interest. Interest rates have nowhere to go now but up, and I am POSITIVE they will be higher 5 years from now.
I left out the PMI they will have to pay on the loan (probably another $200 a month) but you get my drift. Anyone fool-hardy enough to take this advice to do this type of loan when there are much better options (including living WITHIN your means) is going to regret it later.
C
czygvtwkr
Guest
Man I think everyone down here is crazy. I will be a first time home buyer, make $76k year and I think $150k is stretching it, maybe im just a cheap bastard.
Found out the secretary makes less than half of what I make just bought a $250k house....my question is how the hell?
Found out the secretary makes less than half of what I make just bought a $250k house....my question is how the hell?
W
wmsaunders
Guest
I guess I should have read your sig earlier referring to "dont start w/me". Just my opinion I suppose, and yours differs in this case. That's okay with me.
In the end I am merely offering an option to my clients, not a recomendation. I am responsible enough in my position to fully explain the inherit risks involved and almost always they walk away thrilled to be getting what they want..... the keys to their dream home while thanking me for my help all the way out the door.
You appear to be making it sound as though what I do is criminal? It's not. I qualify them within the legal guidelines and am certain that they can afford what they are buying when they purchase. I cannot be held accountable if my clients run up their debt, get divorced, lose their job or experience any financial hardship after they settle. Should the Corvette salesman feel guilty because the car buyer wrapped it around a telephone pole after he drove it off the lot?
I'm merely providing to my clients what they are asking for, sometimes begging for. If not me, they'd go somewhere else and get the same. We track the forclosure rates of our loans in our office and they are considerably low. I sleep well at night and feel good about what I do for a living.
Keep in mind, I offer more than just interest only loans. These are few and far between but are gaining in popularity.
In the end I am merely offering an option to my clients, not a recomendation. I am responsible enough in my position to fully explain the inherit risks involved and almost always they walk away thrilled to be getting what they want..... the keys to their dream home while thanking me for my help all the way out the door.
You appear to be making it sound as though what I do is criminal? It's not. I qualify them within the legal guidelines and am certain that they can afford what they are buying when they purchase. I cannot be held accountable if my clients run up their debt, get divorced, lose their job or experience any financial hardship after they settle. Should the Corvette salesman feel guilty because the car buyer wrapped it around a telephone pole after he drove it off the lot?
I'm merely providing to my clients what they are asking for, sometimes begging for. If not me, they'd go somewhere else and get the same. We track the forclosure rates of our loans in our office and they are considerably low. I sleep well at night and feel good about what I do for a living.
Keep in mind, I offer more than just interest only loans. These are few and far between but are gaining in popularity.
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