Originally posted by: Ocguy31
Originally posted by: shira
Originally posted by: Ocguy31
Originally posted by: shira
Originally posted by: Ocguy31
I just funded a 4.625% 30 year fixed 10 minutes ago, and locked one at 4.5% yesterday. It is an AMAZING time to purchase/refinance if you are a prime borrower.
I agree that 4.5% is a very attractive rate. But if you finance X dollars at 4.5% and the property plummets in value to X/2 in the next couple of years, you're not going to be very happy with your purchase.
Why? Mortgage interest is a very nice writeoff, and owning your own home is great in general.
Prices are leveling off. We will see some more decreases as short-sales screw up your home's value temporarily, but if you arent trying to sell or refinance, it doesnt really matter.
These rates wont be this low for very long. I am surprised it isnt getting more play in the media. I have more refinances to process right now than I know what to do with. I will be here until 8:30 tonight
Everyone needs a place to live, but there's no intrinsic advantage to owning as opposed to renting. If property values go down another 50%, current homeowners are going to lose an aggregate of $10 trillion. Renters won't lose a penny.
In a period of steadily increasing home prices, owning is an advantage, especially since the cost of owning is subsidized by the government by way of deductions for mortgage interest and property taxes. But the loss of equity the past couple of years has dwarfed any tax advantages of owning.
Meanwhile, all of the so-called "experts" are just guessing on where the economy in general and home prices in particular are headed. Just remember that no financial expert alive today has EVER experienced economic conditions remotely like what we're currently seeing. On that basis, how can they say "home prices are leveling off?" Really? BS! They're guessing just like everyone else.
If I bought a house in 2000 for 100K, and it went up to $600K value in 2006, then dropped down to 300K by 2010, how did all that "lost" equity hurt me? Yes, the buyers who bought over-priced homes are now upside down, but as long as they can really afford the payment and arent trying to sell, who cares if you are upside down?
Of course everyone is "guessing", but I am guessing from the side that sees the appraisals everyday. If anyone could tell you exactly, then good for them. But after massive losses in value earlier this year, I am seeing appraisals on the same house 6 months later with nearly the same value.
By leveling I meant not sharply decreasing anymore, becoming more stable. The only time I see huge drop in value anymore is when a short-sale takes place. Those used to not count towards your home's value because it was a outlier. But now, if you nieghbor shortsales, he just screwed you if you are trying to sell or refinance for at least 6 months.
Oh, and renting V owning? Come on. Besides mortgage interest writeoffs....not having a landlord? Not having a shitty studio? There is no comparison.
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