GT1999
Diamond Member
Very good to know, thank you.
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Very good to know, thank you.
Yes you should.
Age doesn't matter. If you are not ready, you are not ready. Some people NEVER own a house.
It's not a hand out, it's something you have to work for!!!
We wouldn't be able to save 20% for probably I want to start a family next year, so I do appreciate your advice, but getting a 20% downpayment just isn't going to happen.[/QUOTE]
And you going to throw kids into a mix?
You are REALLY setting yourself up for failure.
It's ok, lot of people do that.
Remember, 1-2 missed mortgage payments and you in a lot worse situation then you are in today.
Sounds like you might want to reconsider your marriage?
You or your fiancee are not entitled to ANYTHING in life. You have to work hard and MANY years to be ready.
Most Americans will NEVER end up owning a house (simple as that).
If you are not ready, don't even think about it.
Yes, everyone in our society seems to think that. But there was a good reason it was done this way in the 70s/80s....before they deregulated and let the banks hand out money left and right.
As long as you and others remember that the risk is on YOUR side.
Although it does very little you have some buffer zone IF you lose your job or the prices go down. It's called a safety net.
Funny how the entire housing market crashed and...
a) banks are still doing sketchy things
b) people are still doing whatever they can to "own a house"
House ownership is something you have to be ready for. Also it's not all that is hyped up to be (many don't realize this either).
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Drekce
Golden Member
Can't afford to refinance? Seriously? Up until the huge drop in house prices I had a 50% LTV. I have enough cash to pay it down, but don't want to use it for that.
Also, if someone can get a lower rate at 15 years and can afford it, it would be stupid to follow your advice about 30 year loans.
Everything depends on individual situation.
If you have plenty of money, savings and emergency fund and feel very comfortable going with 10-15 year loan.
GO FOR IT
if you making ends meet/just getting by I always suggest 30 year and make much larger payments (but always have an option to pay less).
So again, it depends. The reason I say "in most cases" or recommend it that way is because most Americans do live paycheck to paycheck....etc
GT1999
Diamond Member
I can't believe you say I should reconsider my marriage... I really don't see what that has to do with a house. Everybody wants a house. So I'm supposed to be reconsider marrying a girl because she wants a house?
If I really wanted to, I could tap my 401k and so could she and we could get 20% much faster...
We're going to get an FHA loan and PMI. We both have about as secure jobs as possible so I don't see the fallback to that.
slightlyhuman
Lifer
jesus, move to the south. yes it sucks but 250k here gets you a LOT of house.
What people want is irrelevant.
What people CAN have is what's relevant.
If her expectations are set on "I want a house" regardless of your financial situation....you are in for a surprise (is what I was trying to say).
Tapping into 401k....not the smartest idea....
And don't tell me there is a such a thing as job security, cause there isn't.
Again, the theme of the conversation is:
I CAN buy a house
My theme is:
Are you READY to buy a house
Just because you CAN, doesn't mean you SHOULD.
Talk to any financial adviser and chances are they will tell you 20% down and 6-9 months emergency fund first.
Confirmation that banks are doing nothing different (from what got us into this mess).
😎
purbeast0
No Lifer
don't listen to people like the one telling you what to do. everyone's situation is different and no one knows it better than you yourself.
sure there is some good advice in here, but it is very dependent of people's specific situations.
purbeast0
No Lifer
what does that even mean?
rsutoratosu
Platinum Member
Im thinking of refinancing.. was at 5.75/15yr @ 405k , refinance 2 yr ago down to 3.85/15yr 350k. It basically lowered my payment down 1k monthly.
I plug in a few calculators and it looks like if I can get 2.75-3.2, I'm able to lower my payments down another 600-900/month. Seems like its worth it right ?
I plug in a few calculators and it looks like if I can get 2.75-3.2, I'm able to lower my payments down another 600-900/month. Seems like its worth it right ?
GT1999
Diamond Member
He's trying to say that you too can't afford a house.
While I used to believe in that philosophy, I don't anymore.
There comes a NEED for things at a certain point in life.
How would you feel if you couldn't get a loan for a car because your car died, and you couldn't get to your job?
Well, maybe you should be required to have 20% down for that too.
Or why not just have us all pay cash for everything. Let's not enjoy anything until we're too old to appreciate it.
Sounds great to me... :-/
rcpratt
Lifer
Now I disagree with you.
Nobody has a need for a $200k+ house. The vast majority of people get by on much less.
Nobody has a need for a loan for a new or slightly used car. There are plenty of vehicles out there that will get you to work for $2,000 or less if you absolutely need it.
purbeast0
No Lifer
well then he is greatly mistaken.
the loan is a 30yr fixed rate.
5% down is just under $21k.
it would take too long to save up $63k more to get 5% downpayment of $84k while also paying nearly $1500/mo in rent + living our current lifestyles.
my mortgage payments with taxes and insurance are going to be around $2300/mo.
after doing the math, after paying all our bills (retirement included in that) + mortgage, we will still have over $4k/mo left, probably closer to $4500-$5000.
so we will be able to own a house AND be able to live our current lifestyles.
it's awesome when people have no clue wtf they are talking about.
slightlyhuman
Lifer
FHA you can get with 3.5 down but do require PMI. i would wait a year and save a nice down payment so you can have a LTV around 80%, canceling out PMI.
How long have you been renting?
How much money have you saved during that time.
Based on your numbers you should be saving good 6-7k a month during your rent.
1 year to have 20% down payment.
What's the problem?
slightlyhuman
Lifer
re: subprime lending.
You have absolutely no idea what NEED means.
You see, difference between us is that I would get a $2000 used car (or whatever I can afford at the time)....while you would go down to a dealership and buy a new luxury car or something.
Cars depreciate MUCH faster than just about ANYTHING you buy, so 20% is kind of low. You probably lose that when you drive off the dealer parking lot.
I figured if they had no idea what I meant.....they have been in the closet past 2-3 years. Certainly not ready to have a "am I ready to buy a house" discussion hehe.
🙂
GT1999
Diamond Member
I actually have a 2007 Honda Accord with 80,000 miles and don't owe all that much on (4500 currently). The car before that was also a Honda Accord and it had 100k when I bought it, and 144k when I was done with it. I would've kept it longer but unfortunately I got in a bad crash (2008), so I had to purchase something newer. I would never buy a luxury car, ever. A guy I know went off and spent all kinds of money on an Audi A4 about a year ago, and he racked up all kinds of miles on it over the past year driving to see his fiancee who lives 5 hours away (also a stupid move but that's another conversation), now it has almost 100k. Nobody wants to buy a German car with 100k miles on it because everybody knows it's a money pit. He thought he knew everything because he's a car dealer with his own side business, but in reality he has no sense of money coming from a family that has nothing but money.
I may buy an Accord for the rest of my life... so don't tell me I'd go off and spend money on a luxury car.
I may buy an Accord for the rest of my life... so don't tell me I'd go off and spend money on a luxury car.
GT1999
Diamond Member
rcpratt
Lifer
If you want to help, try being less condescending and using less sarcastic emoticons.
Initially tried to refinance with current lender (Wells Fargo), but their rates and fees were quite high. The rep claimed the "no cost refinance" ad pitches from other companies were a gimmick, and they would hit you in other places (higher overall rates, hidden fees, whatever).
Shopped around and did some research (Fatwallet has a pretty good thread discussing lenders, rates, and experiences). Decided on Provident. Just submitted the initial paperwork, but it's looking like 3.625% APR (down from our current 5%).
Maybe it's just me, but all of the fees and costs and percentages are ridiculously convoluted. It's not until you get actual documentation sent to you that you can start piecing together things.
One thing I learned - if you also do an escrow account to bundle mortgage/insurance/taxes, that will get thrown in as a "fee" as part of the closing costs which they don't include in their fee estimates. So if they say a flat $500 cost to refinance, that means $500 + whatever you need in your escrow (which can be 4k+ depending on your taxes).
Since I have a current escrow with existing mortgage, I assumed that would get transferred over. It does, but what they do is just deduct it from your total borrowed, not add it to the new escrow.
Just another hidden cost I figure I'd share.
Shopped around and did some research (Fatwallet has a pretty good thread discussing lenders, rates, and experiences). Decided on Provident. Just submitted the initial paperwork, but it's looking like 3.625% APR (down from our current 5%).
Maybe it's just me, but all of the fees and costs and percentages are ridiculously convoluted. It's not until you get actual documentation sent to you that you can start piecing together things.
One thing I learned - if you also do an escrow account to bundle mortgage/insurance/taxes, that will get thrown in as a "fee" as part of the closing costs which they don't include in their fee estimates. So if they say a flat $500 cost to refinance, that means $500 + whatever you need in your escrow (which can be 4k+ depending on your taxes).
Since I have a current escrow with existing mortgage, I assumed that would get transferred over. It does, but what they do is just deduct it from your total borrowed, not add it to the new escrow.
Just another hidden cost I figure I'd share.
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