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(New York Daily News)   If you're considering buying a house with those ridiculously low mortgage rates, you're probably too late   (nydailynews.com) divider line 40
    More: Obvious, mortgages, interest rates, digital strategy, Stan Humphries, fixed rate mortgage, economic stimulus  
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2013 clicks; posted to Business » on 24 Jun 2013 at 1:43 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-06-24 01:52:51 PM
Hopefully the unsustainable increase in prices that has taken place this past year or so is due to overcorrection and lack of inventory. The supposed shadow inventory of distressed homes wasn't as big as initially estimated and with foreclosure process taking 18-36 months instead of 6-18 months the existing homes on the market peaked early in 2010. Add to that the number of new constructions being low since 2008 and there really isn't that much inventory out there for all the buyers that could qualify for a house. Thus there are bidding wars where a house can get 25 or more bids and the winning bid is 10-15% higher than asking price.
 
2013-06-24 01:54:32 PM
It'll crash again soon enough.  Lying real estate assholes are at it again.
 
2013-06-24 01:56:27 PM
Sweet!  I'll be out from my underwater mortgage just in time for rates to be back up around 8%!

Well, at least the speculators, bankers, and deadbeats got bailed out, so that's nice.
 
2013-06-24 01:58:51 PM

ddam: Hopefully the unsustainable increase in prices that has taken place this past year or so is due to overcorrection and lack of inventory. The supposed shadow inventory of distressed homes wasn't as big as initially estimated and with foreclosure process taking 18-36 months instead of 6-18 months the existing homes on the market peaked early in 2010. Add to that the number of new constructions being low since 2008 and there really isn't that much inventory out there for all the buyers that could qualify for a house. Thus there are bidding wars where a house can get 25 or more bids and the winning bid is 10-15% higher than asking price.


That's pretty much what the Realtor told us when we went to list the in-laws estate back in April.  4 bedroom ranch on 2.5 acres of fenced pasture.  We were assured it would be a bidding war within 48 hours of being listed.

That...didn't happen.  Finally accepted an offer last Friday for 5% under what we were originally asking.
 
2013-06-24 02:07:31 PM

AngryDragon: Sweet!  I'll be out from my underwater mortgage just in time for rates to be back up around 8%!

Well, at least the speculators, bankers, and deadbeats got bailed out, so that's nice.


i111.photobucket.com
 
2013-06-24 02:07:55 PM
when my parents bought their house in 1980, it was at something like 12 percent. think about that for a second. hell, when we bought ours in '05, it was at six percent, which was decent at the time (we refi'd last year at three percent).

even if it climbs a percent or two, it will still be historically very low.
 
2013-06-24 02:11:40 PM

Skyd1v: ddam: Hopefully the unsustainable increase in prices that has taken place this past year or so is due to overcorrection and lack of inventory. The supposed shadow inventory of distressed homes wasn't as big as initially estimated and with foreclosure process taking 18-36 months instead of 6-18 months the existing homes on the market peaked early in 2010. Add to that the number of new constructions being low since 2008 and there really isn't that much inventory out there for all the buyers that could qualify for a house. Thus there are bidding wars where a house can get 25 or more bids and the winning bid is 10-15% higher than asking price.

That's pretty much what the Realtor told us when we went to list the in-laws estate back in April.  4 bedroom ranch on 2.5 acres of fenced pasture.  We were assured it would be a bidding war within 48 hours of being listed.

That...didn't happen.  Finally accepted an offer last Friday for 5% under what we were originally asking.


It also depends on where in the country this is taking place. In markets that saw house prices go down a lot (like AZ, CA, NV, NM, FL) the prices have gone up about 20% in the past year. Areas that weren't affected as much by the bubble crashing haven't seen as much of an increase (like NC, WY, IA).
 
2013-06-24 02:19:23 PM
I was able to strike while the fire was hot and lock in a 15 year 2.875% refinance (and my PMI, due for the next 18 months, went down from $96 to $45).

/CSB
 
2013-06-24 02:27:38 PM
20 yr @ 3.625%
/238 more and it's all mine
 
2013-06-24 02:29:23 PM
It's really starting to look like we bit just around the right time.  Ended up with a 4.25% 30 year fixed when we bought in October 2011.  We could have gotten lower, but we're saving tens of thousands of dollars by working to pay off the principal as quickly as possible as it is.  That's going to save us way more than getting another .25-.5% off the rate.

It's housing season around here and anything decent seems to be pending/under agreement within a week or two.  It is pretty crazy.  Stupid people are creating another bubble.
 
2013-06-24 02:29:25 PM
Just borrow the money from mom and dad, or pay cash.
 
2013-06-24 02:32:58 PM

pounddawg: 20 yr @ 3.625%
/238 more and it's all mine


25 years at 3.75%. Initially bought the house at 6%, so my payment is down a few hundred per month now. That's as close as I'm getting to a bailout.
 
2013-06-24 02:49:05 PM
If only people were buying houses around me. They're just sitting for months all over the place.
 
2013-06-24 02:49:37 PM

FlashHarry: when my parents bought their house in 1980, it was at something like 12 percent. think about that for a second. hell, when we bought ours in '05, it was at six percent, which was decent at the time (we refi'd last year at three percent).

even if it climbs a percent or two, it will still be historically very low.


Yup. It took my parents over a year to sell their duplex in 1980. Wonder why.

mortgage-x.com
 
jgi
2013-06-24 02:49:53 PM
That article reads like an ad to me.
 
2013-06-24 02:52:22 PM

jgi: That article reads like an ad to me.


There is a similar article in our local paper.

Not the same, but very close.

Buy now!  Rates are rising!  So are home prices!
 
2013-06-24 02:55:11 PM
They started handing out ARMs again.

That's all you really need to know. :(
 
2013-06-24 02:55:34 PM
Yet another article that believes the entire country is one monolithic housing market.
 
2013-06-24 02:56:12 PM

Peki: They started handing out ARMs again.

That's all you really need to know. :(


And every other ad on the radio is now about how you can strike it rich in the house-flipping market
 
jgi
2013-06-24 02:56:28 PM

meat0918: jgi: That article reads like an ad to me.

There is a similar article in our local paper.

Not the same, but very close.

Buy now!  Rates are rising!  So are home prices!



Both the media and my boss are dripping wet to get me into a mortgage. I just can't seem to figure out why...

...meanwhile, I'm perfectly content with all this money I have.
 
2013-06-24 03:06:58 PM

YixilTesiphon: If only people were buying houses around me. They're just sitting for months all over the place.


Are the prices falling? Follow up, is there a market for construction engineers?

It seems to me no one wants to sell low, else I would buy. Looking like I might have to go condo.
 
2013-06-24 03:17:41 PM

thecpt: YixilTesiphon: If only people were buying houses around me. They're just sitting for months all over the place.

Are the prices falling? Follow up, is there a market for construction engineers?

It seems to me no one wants to sell low, else I would buy. Looking like I might have to go condo.


Occasionally you'll find a bank that just wants to GTFO. That's what I did.

What are the advantages of a condo over an apartment?
 
2013-06-24 03:19:26 PM
What they aren't mentioning is that wages have stagnated for many years. As interest rates rise, less people qualify for homes, inventory increases and prices start to drop. Unless wages (and employment in general) starts to pick up substantially, I think the upward price trend will flatten and eventually drop. Don't know when that will happen, though. I'm also skeptical that they'll start to taper QE any time soon like they're saying they will.
 
2013-06-24 03:23:47 PM
We bought our house about six years ago with a 15 year mortgage at 6%.  We refinanced into a 10 year mortgage at 3.375% last year when there was about 10 years and a month left on the original note.  Despite knocking a month off of our mortgage, our payment dropped by a couple hundred dollars a month.

/CSB
//Paying interest sucks
///No more mortgage in ~8 years
////Unless we buy a new house first
//The wife is going to make me buy a new house first
 
2013-06-24 03:31:13 PM

YixilTesiphon: thecpt: YixilTesiphon: If only people were buying houses around me. They're just sitting for months all over the place.

Are the prices falling? Follow up, is there a market for construction engineers?

It seems to me no one wants to sell low, else I would buy. Looking like I might have to go condo.

Occasionally you'll find a bank that just wants to GTFO. That's what I did.

What are the advantages of a condo over an apartment?


Owning rather than renting. Getting tired of paying for living in the space rather than paying to own. I figure real estate market the way it is, selling a condo would net me less of a loss than just leaving an apartment over the same amount of time.
 
2013-06-24 03:39:59 PM

Peki: They started handing out ARMs again.

That's all you really need to know. :(


some banks never stopped. BoA kept on truckin'.
 
2013-06-24 03:45:26 PM
I'm thinking that if this actually transpires like they claim (or probably hope), it might give me a good excuse to rent a little longer.

I was trying to talk myself into buying in about a year, but frankly, I don't feel like my finances are anywhere near ready. It's the balance of what I really want versus what I can manage.
 
2013-06-24 03:58:13 PM
Yes well when you quit giving welfare to bankers they have to make up the profits somehow. It has been obvious for three year now that a 2 trillion dollar stimulus jobs bill is what is needed to help the American people, but no we would rather give 2 trillion dollars to bankers.
 
2013-06-24 04:37:19 PM

Parkanzky: We bought our house about six years ago with a 15 year mortgage at 6%.  We refinanced into a 10 year mortgage at 3.375% last year when there was about 10 years and a month left on the original note.  Despite knocking a month off of our mortgage, our payment dropped by a couple hundred dollars a month.

/CSB
//Paying interest sucks
///No more mortgage in ~8 years
////Unless we buy a new house first
//The wife is going to make me buy a new house first


*fistbump*

Bought our house 10 years ago (30 year fixed, 6%)  Refinanced it last year into a 15 year, 2.65%.  So even knocking 6 years off of the term, our monthly payment went up like 30 bucks.

And I always go into our account on the first and throw another $200.00 onto the loan as well.  That should shave off another 2 years and 4 months.
 
2013-06-24 04:47:37 PM

Lost Thought 00: Peki: They started handing out ARMs again.

That's all you really need to know. :(

And every other ad on the radio is now about how you can strike it rich in the house-flipping market


Yeah to both of those. They should make ARMs illegal. They tried to push one on me when I bought my home. And a few weeks ago some "flippers" bought a neighbors place and wanted to buy mine too.
 
2013-06-24 04:56:43 PM

groppet: Lost Thought 00: Peki: They started handing out ARMs again.

That's all you really need to know. :(

And every other ad on the radio is now about how you can strike it rich in the house-flipping market

Yeah to both of those. They should make ARMs illegal. They tried to push one on me when I bought my home. And a few weeks ago some "flippers" bought a neighbors place and wanted to buy mine too.


There are some situations where an ARM is the right choice. They don't need to be made illegal but I would like to see some regulation on who can qualify for them. Unscrupulous mortgage brokers push them onto people who could only afford the house they are purchasing at the low rate and could never afford to make payments when the rate jumps. Debt to income ratio requirements for ARMs should be much lower than that of a fixed rate.
 
2013-06-24 05:27:38 PM

max_pooper: groppet: Lost Thought 00: Peki: They started handing out ARMs again.

That's all you really need to know. :(

And every other ad on the radio is now about how you can strike it rich in the house-flipping market

Yeah to both of those. They should make ARMs illegal. They tried to push one on me when I bought my home. And a few weeks ago some "flippers" bought a neighbors place and wanted to buy mine too.

There are some situations where an ARM is the right choice. They don't need to be made illegal but I would like to see some regulation on who can qualify for them. Unscrupulous mortgage brokers push them onto people who could only afford the house they are purchasing at the low rate and could never afford to make payments when the rate jumps. Debt to income ratio requirements for ARMs should be much lower than that of a fixed rate.



There are regulations on them.  It's called a lifetime cap, and it's usually around 2%.  So if you got in at prime (when it was at 1%) plus 1% on a 30 yr. and have a lifetime cap of 2%, the most you will ever pay is 4%.  Just because people don't want to learn about what amounts to perhaps the biggest investment they will ever make doesn'e mean its a bad financial instrument.

If you intend to move within the first five years and you could an interest rate lower than whatever the fixed rate is, wouldn't you want it?  Yeah those things are evil.
 
2013-06-24 05:39:13 PM

kaduh: max_pooper: groppet: Lost Thought 00: Peki: They started handing out ARMs again.

That's all you really need to know. :(

And every other ad on the radio is now about how you can strike it rich in the house-flipping market

Yeah to both of those. They should make ARMs illegal. They tried to push one on me when I bought my home. And a few weeks ago some "flippers" bought a neighbors place and wanted to buy mine too.

There are some situations where an ARM is the right choice. They don't need to be made illegal but I would like to see some regulation on who can qualify for them. Unscrupulous mortgage brokers push them onto people who could only afford the house they are purchasing at the low rate and could never afford to make payments when the rate jumps. Debt to income ratio requirements for ARMs should be much lower than that of a fixed rate.


There are regulations on them.  It's called a lifetime cap, and it's usually around 2%.  So if you got in at prime (when it was at 1%) plus 1% on a 30 yr. and have a lifetime cap of 2%, the most you will ever pay is 4%.  Just because people don't want to learn about what amounts to perhaps the biggest investment they will ever make doesn'e mean its a bad financial instrument.

If you intend to move within the first five years and you could an interest rate lower than whatever the fixed rate is, wouldn't you want it?  Yeah those things are evil.


The lowest lifetime cap is about 5% but it could be as high as 8-10%. 2% cap is for one time increase or decrease.

However, payoption and neg-am loans are the ones that would qualify you for an extraordinarily low payment and it would increase after 30 days. The ARMs out there today are 5/1, 7/1 or 10/1, that means that the first 5, 7 or 10 years respectively are fixed. As the average life of a loan is usually less than 5 years (and it's closer to 2 and a half years now due to refis), even a 5 year ARM is not a bad deal in some situations.
 
2013-06-24 05:56:20 PM
ddam:

Thanks for the clarification.  Haven't messed with them since 2008ish and was going from memory.  I just know they are a pretty good thing in certain situations.
 
2013-06-24 09:42:05 PM
So banks loosening mortgage requirements such as 20% down and have relaxed income to debt ratio already?

Odd being middle class wages have been stagnated for years now. Not to mention the ocean of existing underwater mortgages.

I'm more inclined to believe speculators are buying up everything they can to prop up what little uptick in some markets have shown. Real estate and gold markets have never made so many smart people so stupid.
 
2013-06-24 10:29:05 PM

YixilTesiphon: thecpt: YixilTesiphon: If only people were buying houses around me. They're just sitting for months all over the place.

Are the prices falling? Follow up, is there a market for construction engineers?

It seems to me no one wants to sell low, else I would buy. Looking like I might have to go condo.

Occasionally you'll find a bank that just wants to GTFO. That's what I did.

What are the advantages of a condo over an apartment?


just shooting from the hip here...

Not mowing a lawn ( and in turn not needing to buy a lawn mower, weed-eater, round-up, etc)
Not worrying about trees falling on your house ( granted, if a tree hit the condo complex, it may raise your dues, but it is split among all units in the complex), plumbing problems?  having a pool/exercise room and splitting the cost.  I can see a few advantages between a condo vs. a house, and now that my drunk ass has read the post a 2nd time(preview FTW), I see condo vs. apartment, and can only say it depends on if you will need to move vs. having an asset, etc. i.e. and e.g.(just to make grammer nazi's twitch)

/I got a house at 4% for 15 and thought it was a good deal (july 2011, credit scores in the 810+ range). Yet i hear about 2-3% rates people are getting and starting to feel burnt.
 
2013-06-24 11:12:05 PM
I couldnt sell my first house for what I wanted so I called a rental company to take care of it. Now I'm getting the mortgage paid for even at 5.875%.

I've looked into refinancing but I would have to bring too much money to the closing until the prices bounce back. But even with my current rate I figure I'll hold onto it as a retirement investment.
 
2013-06-25 01:28:21 AM

FlashHarry: when my parents bought their house in 1980, it was at something like 12 percent. think about that for a second. hell, when we bought ours in '05, it was at six percent, which was decent at the time (we refi'd last year at three percent).

even if it climbs a percent or two, it will still be historically very low.


THIS.  We bought our house in 07 with 6.25% and I refi'd just today at 3.75% and my house payment went down by over $200 a month.  WIN.
 
2013-06-25 07:49:22 AM
Don't worry. With student loan rates going up too I've basically given up on ever being able to save a down payment. Effing law school loans...
 
2013-06-25 07:59:33 AM
got a 3% 15 yr rate

but yeah there was a bidding war.  maybe 3-5% over?  god i hope only that.  you figure people are bidding high also b/c since rates are so damn low, you artificially have more spending power.  but who knows.  i dont intend to move any time soon.

funny thing is the seller bought for 10% more than their selling price.  theyre taking a huge loss.  if i were selling,id be unwilling to take a loss like that or bigger, so im thinking maybe i am subsidizing their stupidity.

/  i like the place though, one of maybe 3-4 ive liked in 2+ yrs of looking.
// if i found it a few months earlier, id have gotten a 2.625 rate.  effing crazy
 
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