Originally posted by: LegendKiller
I don't think you fully realize what a 20% drop means, most don't.
I think you are just delusional, 20% drop in national average of property value are likely not to happen, but since its your expectation I didn't feel like arguing.
Anyway, if the market drops, so be it. Whats important to me is that I made money before the ride is over. Besides, I seriously doubt that my properties in NYC are likely to drop anytime soon.
Originally posted by: sicko
Originally posted by: LegendKiller
I don't think you fully realize what a 20% drop means, most don't.
I think you are just delusional, 20% drop in national average of property value are likely not to happen, but since its your expectation I didn't feel like arguing.
Anyway, if the market drops, so be it. Whats important to me is that I made money before the ride is over. Besides, I seriously doubt that my properties in NYC are likely to drop anytime soon.
Yeah, the 3-4% drop we have already experienced is nothing but a road bump. Just wait until the sub-prime debacle starts to hit prime and other credit sectors. This credit crisis is unlike any we have seen, secured loans like housing are usually the last to feel the effects, now they are the first. It's only a matter of time until auto and credit cards get pimp smacked.
NYC is just as vulnerable, if not more, than the rest of the country. All it takes is for people like me, who work in i-banking, to lose jobs if the economy gets too crappy and you'll experience massive losses.
Originally posted by: BarneyFife
$1400 mortgage on $4k net pay should not be a problem.
Originally posted by: BarneyFife
$1400 mortgage on $4k net pay should not be a problem.
Originally posted by: XMan
Originally posted by: sicko
By the way, if your takehome is 4k now, you will take home more once your buy the house, so thats a plus.
You don't have anyone in family that can spot you some money for down payment? At least so you don't have to waste money on PMI.
How will takehome increase? Mortgage deduction on taxes?
Nobody in my family or hers has 40K they can "spot" us. My company has a first-time homebuyer assistance program where they'll give me $2,000 once our offer is accepted, but that doesn't help . . .
That CreditBoards link is great, I guess there are some no-PMI 100% financing loans out there if you can find them . . .
Originally posted by: MrDudeMan
Originally posted by: BarneyFife
$1400 mortgage on $4k net pay should not be a problem.
seriously I net $3000 (only income) and we live very well with a $1350 mortgage. We eat what we want, when we want, bought a new car 2 weeks ago, and we have plenty in the bank. I don't think we are doing anything abnormal other than controlling our spending and when we do spend, we spend it on what counts. Just my $0.02.
Originally posted by: XMan
Originally posted by: sicko
honestly, I don't suggest you buying the house if you are not ready.
Heh, you don't know my wife. I made an offhand comment a couple of weeks ago that I didn't know if we'd be able to afford it and it started a huuuuuge argument.
Originally posted by: sicko
Originally posted by: MrDudeMan
Originally posted by: BarneyFife
$1400 mortgage on $4k net pay should not be a problem.
seriously I net $3000 (only income) and we live very well with a $1350 mortgage. We eat what we want, when we want, bought a new car 2 weeks ago, and we have plenty in the bank. I don't think we are doing anything abnormal other than controlling our spending and when we do spend, we spend it on what counts. Just my $0.02.
Things like property tax, hazard insurance, school tax are beyond your control, it really depends on where you live, the house that I bought for my parents cost me 18k a year just in taxes alone and these are things that you don't want to miss payments on, or if you are paying mortgage, most banks will require an escrow account to make sure you don't miss your tax payments and insurance.
Originally posted by: XMan
Originally posted by: sicko
Originally posted by: dquan97
How much is the house? $1400 mortgage on $4K gross income should be feasible, assuming no other major debt or liability.
About 250k I am guessing if its 30 year mortgage.
edit to add: 4k before tax means you get almost nothing left after paying your mortgage.
Also consider what your tax/insurance will cost on top of the mortgage, those are money that you will have to pay in order to keep the house and the home equity line open, one screw up and the bank might close your heloc or jack the rate up.
The house is 225K. Our takehome is around 4K - net, I mean.
A question - the homeowner is cutting us a deal, the house will probably appraise for more than 225. If it appraises for say, 250, would that count as "equity"?
My wife's credit score is 775, mine is 690.
Originally posted by: LegendKiller
Originally posted by: sicko
Originally posted by: LegendKiller
I don't think you fully realize what a 20% drop means, most don't.
I think you are just delusional, 20% drop in national average of property value are likely not to happen, but since its your expectation I didn't feel like arguing.
Anyway, if the market drops, so be it. Whats important to me is that I made money before the ride is over. Besides, I seriously doubt that my properties in NYC are likely to drop anytime soon.
Yeah, the 3-4% drop we have already experienced is nothing but a road bump. Just wait until the sub-prime debacle starts to hit prime and other credit sectors. This credit crisis is unlike any we have seen, secured loans like housing are usually the last to feel the effects, now they are the first. It's only a matter of time until auto and credit cards get pimp smacked.
NYC is just as vulnerable, if not more, than the rest of the country. All it takes is for people like me, who work in i-banking, to lose jobs if the economy gets too crappy and you'll experience massive losses.
It's been hardly a road bump, for the first time since the Great Depression home values have actually gone down.
Originally posted by: alkemyst
Originally posted by: LegendKiller
Originally posted by: sicko
Originally posted by: LegendKiller
I don't think you fully realize what a 20% drop means, most don't.
I think you are just delusional, 20% drop in national average of property value are likely not to happen, but since its your expectation I didn't feel like arguing.
Anyway, if the market drops, so be it. Whats important to me is that I made money before the ride is over. Besides, I seriously doubt that my properties in NYC are likely to drop anytime soon.
Yeah, the 3-4% drop we have already experienced is nothing but a road bump. Just wait until the sub-prime debacle starts to hit prime and other credit sectors. This credit crisis is unlike any we have seen, secured loans like housing are usually the last to feel the effects, now they are the first. It's only a matter of time until auto and credit cards get pimp smacked.
NYC is just as vulnerable, if not more, than the rest of the country. All it takes is for people like me, who work in i-banking, to lose jobs if the economy gets too crappy and you'll experience massive losses.
It's been hardly a road bump, for the first time since the Great Depression home values have actually gone down.
Which is why I advocate just sitting this out for a while. Many say that market timing is impossible, yet that idea is in conjunction with the stock market, which can move very fast. The housing market is completely different, it doesn't move fast. Even if it does and you know it's going up you will most likely make up for your "lost" profits pretty quickly.
People think that this is going to end quickly, it won't. In many areas there is a total of 2-3 *YEARS* of oversupply. This isn't even including the 700-900 BILLION of mortgages that have yet to reset from their super low ARM rates.
And what about the rest of the economy? Adjusted for non-continuing items durable goods don't look great. Consumer sentiment is down. GDP growth is ever decreasing. Yet people still extol the values of housing investing, meanwhile the floor is falling from under their feet.
Yeah, Henry Blodgett and Jack Grubmann were doing the same thing in 2000 just before the NASDAQ crashed.
Every industry rag I read. Every conference I attend. Every investor meeting I go to, I hear the same thing. Now "Will it get bad?" but "When it gets bad, how bad will it get"? The finance market knows it's coming, at least to some extent.
The only ones who think that this isn't going to keep going down are either so heavily invested in RE that they are la-la land, those who are in still strong markets, or those who are clueless.
Originally posted by: LegendKiller
Originally posted by: alkemyst
Originally posted by: LegendKiller
Originally posted by: sicko
Originally posted by: LegendKiller
I don't think you fully realize what a 20% drop means, most don't.
I think you are just delusional, 20% drop in national average of property value are likely not to happen, but since its your expectation I didn't feel like arguing.
Anyway, if the market drops, so be it. Whats important to me is that I made money before the ride is over. Besides, I seriously doubt that my properties in NYC are likely to drop anytime soon.
Yeah, the 3-4% drop we have already experienced is nothing but a road bump. Just wait until the sub-prime debacle starts to hit prime and other credit sectors. This credit crisis is unlike any we have seen, secured loans like housing are usually the last to feel the effects, now they are the first. It's only a matter of time until auto and credit cards get pimp smacked.
NYC is just as vulnerable, if not more, than the rest of the country. All it takes is for people like me, who work in i-banking, to lose jobs if the economy gets too crappy and you'll experience massive losses.
It's been hardly a road bump, for the first time since the Great Depression home values have actually gone down.
Which is why I advocate just sitting this out for a while. Many say that market timing is impossible, yet that idea is in conjunction with the stock market, which can move very fast. The housing market is completely different, it doesn't move fast. Even if it does and you know it's going up you will most likely make up for your "lost" profits pretty quickly.
People think that this is going to end quickly, it won't. In many areas there is a total of 2-3 *YEARS* of oversupply. This isn't even including the 700-900 BILLION of mortgages that have yet to reset from their super low ARM rates.
And what about the rest of the economy? Adjusted for non-continuing items durable goods don't look great. Consumer sentiment is down. GDP growth is ever decreasing. Yet people still extol the values of housing investing, meanwhile the floor is falling from under their feet.
Yeah, Henry Blodgett and Jack Grubmann were doing the same thing in 2000 just before the NASDAQ crashed.
Every industry rag I read. Every conference I attend. Every investor meeting I go to, I hear the same thing. Now "Will it get bad?" but "When it gets bad, how bad will it get"? The finance market knows it's coming, at least to some extent.
The only ones who think that this isn't going to keep going down are either so heavily invested in RE that they are la-la land, those who are in still strong markets, or those who are clueless.
Its easy to say after all these years of over investment that the market will dry up and eventually will go down when supply can't met demand, even someone without a finance background can predict that.
If you just came up with that conclusion after going to trade shows and conventions plus reading your "industry rags", you got more to learn before you start believing and preaching your theory.
When I suggested that you are delusional, it was because of the 20% nationwide average drop in 2 years theory that you was suggesting.
Worried about the sub-prime market going into default? Its actually giving lenders an opportunity to refinance these folks who got screwed the first time another chance to milk them by giving them a slightly better terms at a lower LTV ratio so even when they go into default the bank still have a buffered cushion.
Originally posted by: sandorski
As long as the "a" doesn't turn into "the" you're doing fine!
Originally posted by: sicko
Originally posted by: LegendKiller
Originally posted by: alkemyst
Originally posted by: LegendKiller
Originally posted by: sicko
Originally posted by: LegendKiller
I don't think you fully realize what a 20% drop means, most don't.
I think you are just delusional, 20% drop in national average of property value are likely not to happen, but since its your expectation I didn't feel like arguing.
Anyway, if the market drops, so be it. Whats important to me is that I made money before the ride is over. Besides, I seriously doubt that my properties in NYC are likely to drop anytime soon.
Yeah, the 3-4% drop we have already experienced is nothing but a road bump. Just wait until the sub-prime debacle starts to hit prime and other credit sectors. This credit crisis is unlike any we have seen, secured loans like housing are usually the last to feel the effects, now they are the first. It's only a matter of time until auto and credit cards get pimp smacked.
NYC is just as vulnerable, if not more, than the rest of the country. All it takes is for people like me, who work in i-banking, to lose jobs if the economy gets too crappy and you'll experience massive losses.
It's been hardly a road bump, for the first time since the Great Depression home values have actually gone down.
Which is why I advocate just sitting this out for a while. Many say that market timing is impossible, yet that idea is in conjunction with the stock market, which can move very fast. The housing market is completely different, it doesn't move fast. Even if it does and you know it's going up you will most likely make up for your "lost" profits pretty quickly.
People think that this is going to end quickly, it won't. In many areas there is a total of 2-3 *YEARS* of oversupply. This isn't even including the 700-900 BILLION of mortgages that have yet to reset from their super low ARM rates.
And what about the rest of the economy? Adjusted for non-continuing items durable goods don't look great. Consumer sentiment is down. GDP growth is ever decreasing. Yet people still extol the values of housing investing, meanwhile the floor is falling from under their feet.
Yeah, Henry Blodgett and Jack Grubmann were doing the same thing in 2000 just before the NASDAQ crashed.
Every industry rag I read. Every conference I attend. Every investor meeting I go to, I hear the same thing. Now "Will it get bad?" but "When it gets bad, how bad will it get"? The finance market knows it's coming, at least to some extent.
The only ones who think that this isn't going to keep going down are either so heavily invested in RE that they are la-la land, those who are in still strong markets, or those who are clueless.
Its easy to say after all these years of over investment that the market will dry up and eventually will go down when supply can't met demand, even someone without a finance background can predict that.
If you just came up with that conclusion after going to trade shows and conventions plus reading your "industry rags", you got more to learn before you start believing and preaching your theory.
When I suggested that you are delusional, it was because of the 20% nationwide average drop in 2 years theory that you was suggesting.
Worried about the sub-prime market going into default? Its actually giving lenders an opportunity to refinance these folks who got screwed the first time another chance to milk them by giving them a slightly better terms at a lower LTV ratio so even when they go into default the bank still have a buffered cushion.
Yeah, Europe's 3rd biggest bank is such a fool for having me learn about US MBS abd other securitization product underwriting. Who needs tens of millions of dollars in underwriting fees, or liability if the sector blows up...rags, conferences, and my own education is so worthless...
I can write a book about how this will effect market liquidity, spreads, risk adjustments, future discounting of securities, credit exodus. This isn't just reading securitization material, but actually seeing the results.
For example, the spreads on CMBS have gone up 300% in the last few months. Why? Because investors are worried about the risk. That 300% hits, eventually, the bottom line of issuers and originators. Eventually it'll get passed on to consumers. The *ONLY* reason why borrowing has been so cheap vs historical averages is because inflation has been low. Risk spreads are actually wider than many points in history and they are getting wider by the week. If inflation ticks up some more you'll see the Fed raise rates more, which has a multiplicative effect on interest rates.
Moody's announced that their decision to downgrade hundreds of sub-prime CMBS issuances a few months ago was actually too small. They now say they will double the amount of CMBS that will be downgraded and they are starting to look at prime CMBS also. All because they don't think there's enough credit protection. What that means is they are worried about the whole mortgage market, very worried.
The above also reduces the amount of funds people can lend, how much it costs, and who they can lend to. Sub-prime mortgages are a heck of lot less liquid now than they were 5 months ago. Those who are looking to refi out of a dangerous mortgage don't have the ability to do so. Anybody can see that, but most refuse to.
This isn't about demand drying up because there isn't anybody to buy. This is about rampant speculation through over-leveraging leading to an unprecidented asset bubble. If you look at the .bombs, they might have resulted in the loss of maybe 100bn in market cap, not sure on the exact dollar just tossing something out there. If you look at the housing market, a 3-4% decline that we have already seen is half that.
You still haven't even acknowledged that we are currently experiencing a decline. One the NAR/MBA never said would happen. The 3-4% we have seen so far is only the beginning. Even the NAR says we will see an overall decline this year, they say somewhere around 1.7%. Usually their figures work on a factor of 5. Thus, the real decline will be somewhere around 8.5%, if not more.
Additionally, on an inflation adjusted basis, an actual decrease in the price is only part of the equation. Since the house isn't keeping up with inflation you are actually also losing the inflationary value too. That 3-4% we have experienced already nationwide is actually more around 6-7% including inflation.
Although I preface my argument with one important item. If you are going to stay in that same house for more than 10 years, you'll be OK. Anything less than that and you're going to lose money.
I suggest you read up a bit on the Shiller index. Then, if you are able to, go check out IMN's site on ABS Spring, you can see the different tracks at a securitization conference. You'll see that the leading conference item is MBS.
I get a pretty good overview of the capital markets where I sit. My whole job is credit, since if I am about to extend a few hundred million to companies I need to know how their collateral performs, how the company operates, and where their primary market is heading. I don't think most people have taken a good look at this and the ones that have, like me, are very worried.
I hope I am wrong, because if I am right it'll mean that millions of families lose houses, savings, and perhaps retirement.
At this point, why not just wait a little bit to see where things are going? If his house goes up, it won't be by much. However, if it goes down he could save tens of thousands.
Originally posted by: XMan
Originally posted by: sicko
honestly, I don't suggest you buying the house if you are not ready.
Heh, you don't know my wife. I made an offhand comment a couple of weeks ago that I didn't know if we'd be able to afford it and it started a huuuuuge argument.
Originally posted by: Dulanic
Me and my fiancee are in the process of closing now on a $235K condo (pic) and we did 100% financing at 5.5% interest. If you live in an area that has it check out Acorn Hosing. In MA they work with Bank of America which is who my mortgage will be with. But they offer 100% no money down lower than market average interest rates. They do have a income limit, I believe it is $80k or so right now, between me and my fiancee we could only have one of us on the mortgage.
Originally posted by: XMan
"I can't do it, Captain! I don't have the down payment!"
The timing is not super great, we had a plan to get completely out of debt, then start saving for a down payment. Problem is, a house we really, really like, in a perfect location, is coming available, and the owner is giving us first dibs on it, without having to go through a realtor.
So as it stands now, we'll just be out of debt when it's mortgage time. So paying for it shouldn't be an issue . . . I think. Our take home is around 4K a month, the mortgage will probably be around 1300-1400 . . . don't know how much with PMI.
Is it still possible to get first-time homebuyer, no-money-down loans? Or have the lenders clammed up with all the problems?
Originally posted by: LegendKiller
Originally posted by: sicko
Originally posted by: LegendKiller
I don't think you fully realize what a 20% drop means, most don't.
I think you are just delusional, 20% drop in national average of property value are likely not to happen, but since its your expectation I didn't feel like arguing.
Anyway, if the market drops, so be it. Whats important to me is that I made money before the ride is over. Besides, I seriously doubt that my properties in NYC are likely to drop anytime soon.
Yeah, the 3-4% drop we have already experienced is nothing but a road bump. Just wait until the sub-prime debacle starts to hit prime and other credit sectors. This credit crisis is unlike any we have seen, secured loans like housing are usually the last to feel the effects, now they are the first. It's only a matter of time until auto and credit cards get pimp smacked.
NYC is just as vulnerable, if not more, than the rest of the country. All it takes is for people like me, who work in i-banking, to lose jobs if the economy gets too crappy and you'll experience massive losses.
I have properties in NYC and prices are very steady. Before it was just insane, I had somebody offer me 100k 10 MINUTES after I had closed on a condo in a new development. That was Spring 2004, and I wasn't interested in flipping anyway. It was completely a sellers' market, whereas now is more balanced, but prices are still rising especially in areas where a lot of new developments are changing the face of the neighborhoods, like the meat packing district for example.. Rents also have increased quite a lot in the last 24 months.
NYC housing markets is extremely resilient. It didn't really drop even after 9/11. Part of it is that there's a lot of money coming to buy condos from abroad. I have recently bought a condo in a building where basically nobody is living there. Second houses for the week-end theater nights and a lot of foreigners. US dollar is very cheap. Plus Manhattan is an island, there isn't a lot of room, especially when you consider many people would never accept to live north of 110th street.