The Home Ownership Thread

[jbarwick]

realtor.com has a feature where it lets you draw a an area of interest and save that as a search so they can send you updates when properties in that area come on the market.

Except it doesn't ******* work. It works when you are actually on the website and draw the picture, but the actual search routinely sends me matches that are well outside the area of interest and are located in other towns where we wouldn't even consider looking.

As far as I can tell, it is just sending me every random listing that meets my other criteria from the entire county. I circled the 3 biggest population centers, so most of the listings are relevant, but I keep getting excited when I see the preview of these homes (because the far out there towns obviously have much lower prices) only to click on them, open the map, and realize where they are.

Zillow has this feature and it works well if you draw the boundary without messing up.

 

[Joffrey]

I would advise against the 5% down. Yes, rates are low, but if you're below 20% down, you have to pay PMI which could be looked at as a big increase in the interest rate.

Your first step though is to get pre-qualified for a mortgage and see what a bank will be willing to lend you. Odds are, to others' point, you'll need multiple people on the loan.

When speaking to lenders ask to see if you can finance or pay for mortgage insurance at settlement (this is called Single Premium Mortgage Insurance). In my experience, you either put down 10% or meet their credit score threshold.

 

[otc]

Zillow has this feature and it works well if you draw the boundary without messing up.

I'll have to try that out. I've been liking the realtor.com interface better than Zillow (prefer redfin over both, but it isn't available there).

When speaking to lenders ask to see if you can finance or pay for mortgage insurance at settlement (this is called Single Premium Mortgage Insurance). In my experience, you either put down 10% or meet their credit score threshold.

I thought the trick with mortgage insurance was to hope you see a bunch of appreciation in your area combined any repairs/improvements you do and then get a friendly appraisal to bump you out of PMI territory within a couple of years. Wouldn't an up front payment break that strategy?

Although if you are buying an area that's having a covid-bubble, you might not see values come up fast (although I wouldn't be surprised if NYC prices are going the other way and see a big jump when people can go back to normal).

 

[sugarbutch]

Refinanced with a 15-year mortgage, lining up with the commencement of our hoped-for retirement. I’m sure someone here thinks we should have stayed with a 30...

 

[Fueco]

Refinanced with a 15-year mortgage, lining up with the commencement of our hoped-for retirement. I’m sure someone here thinks we should have stayed with a 30...

We refi’d earlier this year to a 15-year, and put more cash into it. Our monthly payments are less than what we were paying for a condo in Sunnyvale seven years ago.

 

[Omega Male]

Refinanced with a 15-year mortgage, lining up with the commencement of our hoped-for retirement. I’m sure someone here thinks we should have stayed with a 30...

We'll forgive you if you immediately tap a HELOC to buy Tesla calls.

 

[brokencycle]

We'll forgive you if you immediately tap a HELOC to buy Tesla calls.

Puts or bust when it comes to TSLA.

 

[PhilKenSebben]

just keep threatening to walk away and get more concessions

Eventually she will just give you the house for free!

I have a feeling I will be getting Into a similar situation not that long from now

 

[Master Milano]

Thank you all for responding to me lol - wished I'd plan this earlier. I'm a business owner/wantrepreneur and basically took less income for the past several years in order to reinvest into the business. really wishing i went the traditional route and did comp sci like everyone else.

[/QUOTE]

I don't think I understand how you can buy a 700k house on 56k income, regardless of the down payments and even with the contributions of everyone else in the house. the under writing on this is going to be a *****.
That said, because rates are so low, I am a big proponent of 5 percent down personally (fha)

Yeah I know that's kind of what I'm struggling with - I actually make more than that but have a huge blemish on credit so wanted her to apply. We've got no other debt payments currently so it this mortgage would take up the entire DTI. We've got about 200+ ballpark for the mortgage downpayment but would really prefer to throw the cash into TSLA and AMZN Calls lol

Why not just take the step of pre-qualifying to see what you can afford? The math just doesn't add up for me.

Thanks I realized after a bunch of research today that that's probably all i've got to do instead of trying to figure it out. It definitely feels super daunting.

Does that limit include property taxes and insurance?

Limit includes property taxes + insurance. Although this property tax is based off of what Zillow tells me, which is not representative of the house's listing cost. I'm wondering if there's a way to work down the sale price when making the purchase.

So 4 people are going to be paying and each of you is going to be paying something like 40%+ of your income?

Hahaha i'm worried that's what it'd look like on paper. Would be a real struggle if this were the case. Wondering if having cash reserves in the bank while applying would help?

And, unless I'm missing something, the lender won't take their incomes into consideration because they won't be the ones obligated on the mortgage.

Gotcha that makes sense - and i'm worried about adding onto the mortgage since I don't have good credit.

If OP cash flow works out and finds the right broker, it can workout if putting down 20-25%. All parties would need to be on the mortgage though most likely for income purposes I think. 750k would really be on the high end though with 175k down. Your target home price would be even lower if you consider furnishing and modest updates at the beginning, requiring more cash in hand. I would speak with a broker or a few to get a feel of the market first and realistic prospects.

Thanks for this -- 750k is its current list price and i'm hoping it'll fall/be negotiable but home prices have been insanely unpredictable at this point. It's got some violations and such i wondering if it's possible for me to use a a negotiating point. The house also requires quite a bit of work -- other homes in the area that sold for ~750 have been fully rebuilt whereas I have no idea what this is.

Honestly just feeling like a rush to purchase something before property prices begin to sky rocket

Your first step though is to get pre-qualified for a mortgage and see what a bank will be willing to lend you. Odds are, to others' point, you'll need multiple people on the loan.

Thanks for the advice .

And, on that note, won't they base their approval decision and interest rate on the borrower with the lowest credit score/highest risk?

My understanding is that you're correct. How easy is it to refinance in the future once credit score improves? Don't feel like that's worth it since interest rates are so good at the moment.

Lol.

My seller talked to her CPA, who told her that she'd owe capital gains tax on the money she's giving us at closing. Now she wants to restructure the deal to lower the sale price. Once again, **** off.

At this point, the deal is done, but now I'm seriously worried about them ******* up closing somehow. She has an incompetent CPA and agent, and she clearly thinks she knows better than everyone else.

forgive my ignorance - Is there a particular reason why she would have preferred a higher sale price & giving you $ (assuming for repairs)?

Getting a loan can be hell -- especially for the self employed -- but it can have its amusing moments.

A friend of mine thought his days of loans were over ... BUT ... a property he has long admired is going to come on the market shortly after the first of the year. He wants to be able to offer all cash to have a good shot at getting it. This being so he decided to get a loan on a commercial property he owns. He started this process some time back and closed last week.

Naturally the bank wanted copies of everything financial and his favorite moment was when the bank demanded he furnish a copy of the primary tenant's lease. He said that the bank should have a copy but the loan officer assured him she had not previously asked for it. He asked the loan officer to look at the address of the property. She said "That seems familiar." My friend noted that it should. The bank is his tenant.

Hahaha - wished I was at this level.

realtor.com has a feature where it lets you draw a an area of interest and save that as a search so they can send you updates when properties in that area come on the market.

Except it doesn't ******* work. It works when you are actually on the website and draw the picture, but the actual search routinely sends me matches that are well outside the area of interest and are located in other towns where we wouldn't even consider looking.

As far as I can tell, it is just sending me every random listing that meets my other criteria from the entire county. I circled the 3 biggest population centers, so most of the listings are relevant, but I keep getting excited when I see the preview of these homes (because the far out there towns obviously have much lower prices) only to click on them, open the map, and realize where they are.

When speaking to lenders ask to see if you can finance or pay for mortgage insurance at settlement (this is called Single Premium Mortgage Insurance). In my experience, you either put down 10% or meet their credit score threshold.

Although if you are buying an area that's having a covid-bubble, you might not see values come up fast (although I wouldn't be surprised if NYC prices are going the other way and see a big jump when people can go back to normal).

Indeed that's what i'm worried about. The housing market - and the economy really has been pretty wacky these days. Disinflationary environment now, but if things go well, inflation for years to come. The odd thing is that my area (other boroughs), have actually seen an increase in sale price (closing price is always about 3% below listing -- but price/sq up). I'm hoping this is simply due to lack of inventory with COVID fears but who knows. Is this the right time to buy? how much % wise would be considerred a low ball ?

Side note: if your income is put into an IRA / ROTH previously, does that count towards the loan?

 

[Van Veen]

forgive my ignorance - Is there a particular reason why she would have preferred a higher sale price & giving you $ (assuming for repairs)?

There's no reason for her to prefer it. She walks away with the same $$$ from the closing table either way. I prefer this way because I get to roll the repairs into a mortgage at an insanely low rate instead of paying out-of-pocket.

For some reason she thinks she'll owe capital gains tax just on the money she gives back at closing, which makes no sense.

 

[RedLantern]

Maybe they are confusing excise tax + RE commissions with capital gains tax? Reducing the sale price instead of kicking back money to the buyer will reduce the sales commission and the excise tax.

 

[Van Veen]

So apparently the listing agent called my closing attorney, and then my agent had a 30 min phone call with the attorney explaining everything to her. (I hope those aren't billable hours.)

(preemptive)

I'd run like hell from that.

 

[otc]

This one is...not your usual McMansion Hell post

We Interrupt This Broadcast to Bring You an Especially Cursed House

Hello everyone. Originally, this post was supposed to be devoted to the year 1978, however something came up, and by something, I mean this 2.2 million-dollar, 5,420 sq ft 4 bed/4.5 bath house in...

mcmansionhell.com

 

[venividivicibj]

would really prefer to throw the cash into TSLA and AMZN Calls lol

 

[Master Milano]

There's no reason for her to prefer it. She walks away with the same $$$ from the closing table either way. I prefer this way because I get to roll the repairs into a mortgage at an insanely low rate instead of paying out-of-pocket.

For some reason she thinks she'll owe capital gains tax just on the money she gives back at closing, which makes no sense.

That makes sense - would the increase sale cost affect the property tax going forward? Or negligible compared to int. rate savings to money now?