I'd be interested to hear how this turns out with only one of you on the mortgage when you guys break up / get divorced.
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: Tango
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.
Prices have fallen in Manhattan before. But I do see what you are talking about. It's pretty amazing how little a lot of money can buy you here. But we accepted the tradeoff about living in the city as opposed to outside, with the commute and such. We didn't buy, since we don't know where to go yet, but I think we'll buy 2 years from now.
Originally posted by: Tango
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.
Originally posted by: LegendKiller
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: sicko
Thats like suggesting just because you think there is a crash coming, everyone should stop profiting from the market until it happens.
Not trying to debate anything with you, just pointing out the problem I saw in your theory. I have no interest in proving anything to anyone so if you are attempting to start a debate to make yourself look intelligent, you can count me out.
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: smack Down
Originally posted by: Tango
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.
Brilliant, if no one is living there then prices must go up.
Originally posted by: LegendKiller
Originally posted by: Tango
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.
Prices have fallen in Manhattan before. But I do see what you are talking about. It's pretty amazing how little a lot of money can buy you here. But we accepted the tradeoff about living in the city as opposed to outside, with the commute and such. We didn't buy, since we don't know where to go yet, but I think we'll buy 2 years from now.
Well, I am not saying prices cannot fall of course. Every market goes through a bad cycle every now and then. But NY real estate looked very attractive to me because it's very easy to rent it out. That's why I have never been interested in the idea of flipping property. The reason why I buy real estate is diversifying away from equity markets.
The other thing is I am not used to renting, because I never did it and I feel like throwing money away. Just a personal feeling, I know for many people it makes a lot of sense to rent instead.
Also I live part of the year here in NY and part in Europe and renting can be sometimes a pain in the ass with this lifestyle, as some boards think they can dictate your life.. That's why I will never again look into co-ops. When I first started living here I found extremely annoying this co-ops boards thing, with their ridiculous requests.
Originally posted by: Tango
Originally posted by: smack Down
Originally posted by: Tango
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.
Brilliant, if no one is living there then prices must go up.
What I meant was it's not their primary residence, as most of them are foreigners coming to the city every once in a while for shopping or business. Plus some that live for example in CT and keep a pied-a-terre for week-ends.
It is very relevant because foreign investors represented a huge part of the last 3 years' sales. In some condo building they were more that 50%, also thanks to the very cheap dollar.
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.
Originally posted by: smack Down
Originally posted by: Tango
Originally posted by: smack Down
Originally posted by: Tango
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.
Brilliant, if no one is living there then prices must go up.
What I meant was it's not their primary residence, as most of them are foreigners coming to the city every once in a while for shopping or business. Plus some that live for example in CT and keep a pied-a-terre for week-ends.
It is very relevant because foreign investors represented a huge part of the last 3 years' sales. In some condo building they were more that 50%, also thanks to the very cheap dollar.
Your only fooling yourself, those people own those condos as an investment.
Originally posted by: FilmCamera
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.
$235K for that? why? I hope you got all three of those units for that price.
Originally posted by: jiggahertz
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.
I'd be interested to hear how this turns out with only one of you on the mortgage when you guys break up / get divorced.
Originally posted by: tanishalfelven
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.
won;t work. my brother got a house of 130k at about 6.2 rate and that cost him a total of 190K and monthly comes down to 1200+. no way a 250 K house is going for that small. open up calc (open office i don't know how in ms office) and use the compound interest formula to figure it out.
edit.
i just used an online mortage calucator and 1400 is about right. i wonder how i calculated last time that got me to 1300+ for a 130k house
edit 2.
it must include all the other crap that you have to pay such as insurance etc etc.
Originally posted by: HomeAppraiser
Xman
What city are you buying in? Values aren't going down everywhere you know. The hot markets of 2005-06 are the ones that are falling the fastest and hardest. Some areas are actually increasing this year moneymag
If you are buying directly from the builder ask him to knock the 6% realtor commission off the price. Also have an independent building inspector check the house as a condition of your sales contract.
Good luck.
Originally posted by: sdifox
I refused to buy a house until I got 30% down. No amount of B&W got me off that target.
Originally posted by: XMan
Originally posted by: sicko
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 . . .
Won't be by a whole lot (mortgage only 14k) but you should get a tad more take home.
When I said family, I don't mean an individual, I meant like a few grand from each person, that shouldn't be hard right?
Never happen. My family isn't exactly what you'd call generous, and hers probably couldn't afford to.
You missed a lot of appreciation and mortgage interest that you would have made to got with a much smaller down payment + plus you wasted a lot of money on rent. Triple wammy in my books...Originally posted by: sdifox
I refused to buy a house until I got 30% down. No amount of B&W got me off that target.
Originally posted by: nweaver
You all are crazy....
I got into (my second) home with nothing down, and a decent interest rate. The kicker is that I waited (it's been about 2 years) and got a home for about 75% appraisal, so that even if the market tanks 20% I'm fine. I don't have a huge house, or even a very fancy house, but it's plenty for me, the wife, and 2 kids (7 and 2) at 1400 SF. It also cost me a couple days time, and $56 to heat my house ALL WINTER LONG. Not too shabby
OP, they are right, depending on the market in the area, it's headed down, and down hard. If you can wait it out a while, it will benefit you in the long run. I grew up in an oil town, and when the oil stopped (around early 80's) that town nearly died. The bank wouldn't let you default, because there was nobody to sell the house to at ANY cost. People were moving and mailing their keys to the bank. The oil stuff picked up, and now homes are at LEAST 30% over priced there. It's practically a waiting list to get on a waiting list to MAKE an offer on a home that is sold the day it's on the market there. Of course, give it about 2 more years, and there will be more cheap housing then you can shake a stick at there.....
Bottom line, look at what happened in the area 30 years ago, 20 years ago, and 10 years ago. If they didn't take a big hit in the late 70's/early 80's, and you have good industry there (i.e. jobs won't dry up) then it might be worth it now, but likely not.