FHA “motivation letter”? What does this mean?

[Daniel]

FHA loan… I see… Tell Carrie not to worry. If she falls behind with her payments, it would be our pleasure to pick up the tab. I just sent a big fat check to Uncle Sam a few weeks back, so Uncle Sam will take care of her. After all, what are taxpayers good for?

[dharmagirl]

Trust me, I agree with you.

However, I cant control someone else’s poor choices.

[dharmagirl]

Trust me, I agree with you.

However, I cant control someone else’s poor choices.

[dharmagirl]

Trust me, I agree with you.

However, I cant control someone else’s poor choices.

[dharmagirl]

Trust me, I agree with you.

However, I cant control someone else’s poor choices.

[dharmagirl]

Trust me, I agree with you.

However, I cant control someone else’s poor choices.

[Anonymous]

dharmagirl, I don’t fault your cousin for wanting to purchase a home. In this current economic climate, buyers are losing properties left and right. Therefore, it’s almost impossible to trust that the Landlord you’re renting from will not allow the home to be foreclosed upon right from under you. Apartment renting is not stable either, and never has been. If you run into a vindictive neighbor or an apartment manager that doesn’t like you, you’ve got problems…

This board is dominated by men with six figure incomes who haughtily look down on someone that doesn’t have 20% down to put on a house. Just because someone doesn’t have 20% to put down, doesn’t mean they can’t afford to own a home.

If your cousin’s total mortgage payment to include property taxes and any HOA fees/mello roos after the tax deduction is the same or less than what it would cost her to rent, she can afford to buy. Ideally she should have some resserves in case of needed repairs, but it’s not a perfect world. If something breaks, she may have to charge it on her credit card. That’s a quick fix though, in that case she can go out and get a second job flipping burgers until the debt is paid off. Or, she can buy a newer home that’s still under warranty and less likely to need major repairs.

I don’t advocate the purchase of an overvalued property though. Aside from that, if the numbers make sense and she doesn’t mind losing some equity as prices continue to drop,
I don’t see that buying is a bad thing for her.

P.S. An $1800 fridge? OH Yeah! 🙂 If she can afford a nice fridge, than why not? I’m partial to nice appliances. If she gets a good one, which for $1800 it should be, she can keep it forever. I’m hoping she went with a stainless steel, bottom-freezer, counter-depth model.

[Anonymous]

dharmagirl, I don’t fault your cousin for wanting to purchase a home. In this current economic climate, buyers are losing properties left and right. Therefore, it’s almost impossible to trust that the Landlord you’re renting from will not allow the home to be foreclosed upon right from under you. Apartment renting is not stable either, and never has been. If you run into a vindictive neighbor or an apartment manager that doesn’t like you, you’ve got problems…

This board is dominated by men with six figure incomes who haughtily look down on someone that doesn’t have 20% down to put on a house. Just because someone doesn’t have 20% to put down, doesn’t mean they can’t afford to own a home.

If your cousin’s total mortgage payment to include property taxes and any HOA fees/mello roos after the tax deduction is the same or less than what it would cost her to rent, she can afford to buy. Ideally she should have some resserves in case of needed repairs, but it’s not a perfect world. If something breaks, she may have to charge it on her credit card. That’s a quick fix though, in that case she can go out and get a second job flipping burgers until the debt is paid off. Or, she can buy a newer home that’s still under warranty and less likely to need major repairs.

I don’t advocate the purchase of an overvalued property though. Aside from that, if the numbers make sense and she doesn’t mind losing some equity as prices continue to drop,
I don’t see that buying is a bad thing for her.

P.S. An $1800 fridge? OH Yeah! 🙂 If she can afford a nice fridge, than why not? I’m partial to nice appliances. If she gets a good one, which for $1800 it should be, she can keep it forever. I’m hoping she went with a stainless steel, bottom-freezer, counter-depth model.

[Anonymous]

dharmagirl, I don’t fault your cousin for wanting to purchase a home. In this current economic climate, buyers are losing properties left and right. Therefore, it’s almost impossible to trust that the Landlord you’re renting from will not allow the home to be foreclosed upon right from under you. Apartment renting is not stable either, and never has been. If you run into a vindictive neighbor or an apartment manager that doesn’t like you, you’ve got problems…

This board is dominated by men with six figure incomes who haughtily look down on someone that doesn’t have 20% down to put on a house. Just because someone doesn’t have 20% to put down, doesn’t mean they can’t afford to own a home.

If your cousin’s total mortgage payment to include property taxes and any HOA fees/mello roos after the tax deduction is the same or less than what it would cost her to rent, she can afford to buy. Ideally she should have some resserves in case of needed repairs, but it’s not a perfect world. If something breaks, she may have to charge it on her credit card. That’s a quick fix though, in that case she can go out and get a second job flipping burgers until the debt is paid off. Or, she can buy a newer home that’s still under warranty and less likely to need major repairs.

I don’t advocate the purchase of an overvalued property though. Aside from that, if the numbers make sense and she doesn’t mind losing some equity as prices continue to drop,
I don’t see that buying is a bad thing for her.

P.S. An $1800 fridge? OH Yeah! 🙂 If she can afford a nice fridge, than why not? I’m partial to nice appliances. If she gets a good one, which for $1800 it should be, she can keep it forever. I’m hoping she went with a stainless steel, bottom-freezer, counter-depth model.

[Anonymous]

dharmagirl, I don’t fault your cousin for wanting to purchase a home. In this current economic climate, buyers are losing properties left and right. Therefore, it’s almost impossible to trust that the Landlord you’re renting from will not allow the home to be foreclosed upon right from under you. Apartment renting is not stable either, and never has been. If you run into a vindictive neighbor or an apartment manager that doesn’t like you, you’ve got problems…

This board is dominated by men with six figure incomes who haughtily look down on someone that doesn’t have 20% down to put on a house. Just because someone doesn’t have 20% to put down, doesn’t mean they can’t afford to own a home.

If your cousin’s total mortgage payment to include property taxes and any HOA fees/mello roos after the tax deduction is the same or less than what it would cost her to rent, she can afford to buy. Ideally she should have some resserves in case of needed repairs, but it’s not a perfect world. If something breaks, she may have to charge it on her credit card. That’s a quick fix though, in that case she can go out and get a second job flipping burgers until the debt is paid off. Or, she can buy a newer home that’s still under warranty and less likely to need major repairs.

I don’t advocate the purchase of an overvalued property though. Aside from that, if the numbers make sense and she doesn’t mind losing some equity as prices continue to drop,
I don’t see that buying is a bad thing for her.

P.S. An $1800 fridge? OH Yeah! 🙂 If she can afford a nice fridge, than why not? I’m partial to nice appliances. If she gets a good one, which for $1800 it should be, she can keep it forever. I’m hoping she went with a stainless steel, bottom-freezer, counter-depth model.

[Anonymous]

dharmagirl, I don’t fault your cousin for wanting to purchase a home. In this current economic climate, buyers are losing properties left and right. Therefore, it’s almost impossible to trust that the Landlord you’re renting from will not allow the home to be foreclosed upon right from under you. Apartment renting is not stable either, and never has been. If you run into a vindictive neighbor or an apartment manager that doesn’t like you, you’ve got problems…

This board is dominated by men with six figure incomes who haughtily look down on someone that doesn’t have 20% down to put on a house. Just because someone doesn’t have 20% to put down, doesn’t mean they can’t afford to own a home.

If your cousin’s total mortgage payment to include property taxes and any HOA fees/mello roos after the tax deduction is the same or less than what it would cost her to rent, she can afford to buy. Ideally she should have some resserves in case of needed repairs, but it’s not a perfect world. If something breaks, she may have to charge it on her credit card. That’s a quick fix though, in that case she can go out and get a second job flipping burgers until the debt is paid off. Or, she can buy a newer home that’s still under warranty and less likely to need major repairs.

I don’t advocate the purchase of an overvalued property though. Aside from that, if the numbers make sense and she doesn’t mind losing some equity as prices continue to drop,
I don’t see that buying is a bad thing for her.

P.S. An $1800 fridge? OH Yeah! 🙂 If she can afford a nice fridge, than why not? I’m partial to nice appliances. If she gets a good one, which for $1800 it should be, she can keep it forever. I’m hoping she went with a stainless steel, bottom-freezer, counter-depth model.

[dharmagirl]

Marion,

You make some good points about renting vs. owning. I still think buying a place on a wing and a prayer – in this market – with no cash reserves is not a great idea.

If I had listened to conservative advice I would have never bought my first place. In 2002, a real estate investor friend suggested that, on my then-$65K salary, I buy a $300K condo with $0 down and an 80/20-I/O loan. My family thought I was nuts and Steve, an uber-financially/politically-conservative friend said, “I think I’m going to throw up on your behalf…how can you stomach that kind of risk?”

However, I studied the MLS listings like my life depended on it and picked a place that needed some sweat-equity and was the least expensive condo in an nice area.

I chose a “roommate-friendly” layout (dual masters) and found a roommate to help me pay for a chunk of the monthly payment. When I sold the place in 2005, I made a nice profit, but I recognize that I took a gamble and was lucky with timing. Had I waited even 9 mos, I would have been in a different position.

Today, there is far less margin for risk (i.e. stupidity). I would never try to pull that NOW.

What has me the most worried about Carrie is that I dont think she’s truly making an informed decision, and expects her realtor, lender, etc. to look out for her interests and tell her what to do. I’m not sure she fully understands the process, the way it’s SUPPOSED to work, and that she doesnt have to buy THIS particular place just because her realtor tells her to.

I would have never agreed to pay $200K for the place. The Zillow bottom range estimate is about $170K. I’m not sure she ‘gets’ that she is probably paying too much.

She also had reservations about FHA loans because she suggested that “those loans are for poor people!”

Sigh….

[dharmagirl]

Marion,

You make some good points about renting vs. owning. I still think buying a place on a wing and a prayer – in this market – with no cash reserves is not a great idea.

If I had listened to conservative advice I would have never bought my first place. In 2002, a real estate investor friend suggested that, on my then-$65K salary, I buy a $300K condo with $0 down and an 80/20-I/O loan. My family thought I was nuts and Steve, an uber-financially/politically-conservative friend said, “I think I’m going to throw up on your behalf…how can you stomach that kind of risk?”

However, I studied the MLS listings like my life depended on it and picked a place that needed some sweat-equity and was the least expensive condo in an nice area.

I chose a “roommate-friendly” layout (dual masters) and found a roommate to help me pay for a chunk of the monthly payment. When I sold the place in 2005, I made a nice profit, but I recognize that I took a gamble and was lucky with timing. Had I waited even 9 mos, I would have been in a different position.

Today, there is far less margin for risk (i.e. stupidity). I would never try to pull that NOW.

What has me the most worried about Carrie is that I dont think she’s truly making an informed decision, and expects her realtor, lender, etc. to look out for her interests and tell her what to do. I’m not sure she fully understands the process, the way it’s SUPPOSED to work, and that she doesnt have to buy THIS particular place just because her realtor tells her to.

I would have never agreed to pay $200K for the place. The Zillow bottom range estimate is about $170K. I’m not sure she ‘gets’ that she is probably paying too much.

She also had reservations about FHA loans because she suggested that “those loans are for poor people!”

Sigh….

[dharmagirl]

Marion,

You make some good points about renting vs. owning. I still think buying a place on a wing and a prayer – in this market – with no cash reserves is not a great idea.

If I had listened to conservative advice I would have never bought my first place. In 2002, a real estate investor friend suggested that, on my then-$65K salary, I buy a $300K condo with $0 down and an 80/20-I/O loan. My family thought I was nuts and Steve, an uber-financially/politically-conservative friend said, “I think I’m going to throw up on your behalf…how can you stomach that kind of risk?”

However, I studied the MLS listings like my life depended on it and picked a place that needed some sweat-equity and was the least expensive condo in an nice area.

I chose a “roommate-friendly” layout (dual masters) and found a roommate to help me pay for a chunk of the monthly payment. When I sold the place in 2005, I made a nice profit, but I recognize that I took a gamble and was lucky with timing. Had I waited even 9 mos, I would have been in a different position.

Today, there is far less margin for risk (i.e. stupidity). I would never try to pull that NOW.

What has me the most worried about Carrie is that I dont think she’s truly making an informed decision, and expects her realtor, lender, etc. to look out for her interests and tell her what to do. I’m not sure she fully understands the process, the way it’s SUPPOSED to work, and that she doesnt have to buy THIS particular place just because her realtor tells her to.

I would have never agreed to pay $200K for the place. The Zillow bottom range estimate is about $170K. I’m not sure she ‘gets’ that she is probably paying too much.

She also had reservations about FHA loans because she suggested that “those loans are for poor people!”

Sigh….

[dharmagirl]

Marion,

You make some good points about renting vs. owning. I still think buying a place on a wing and a prayer – in this market – with no cash reserves is not a great idea.

If I had listened to conservative advice I would have never bought my first place. In 2002, a real estate investor friend suggested that, on my then-$65K salary, I buy a $300K condo with $0 down and an 80/20-I/O loan. My family thought I was nuts and Steve, an uber-financially/politically-conservative friend said, “I think I’m going to throw up on your behalf…how can you stomach that kind of risk?”

However, I studied the MLS listings like my life depended on it and picked a place that needed some sweat-equity and was the least expensive condo in an nice area.

I chose a “roommate-friendly” layout (dual masters) and found a roommate to help me pay for a chunk of the monthly payment. When I sold the place in 2005, I made a nice profit, but I recognize that I took a gamble and was lucky with timing. Had I waited even 9 mos, I would have been in a different position.

Today, there is far less margin for risk (i.e. stupidity). I would never try to pull that NOW.

What has me the most worried about Carrie is that I dont think she’s truly making an informed decision, and expects her realtor, lender, etc. to look out for her interests and tell her what to do. I’m not sure she fully understands the process, the way it’s SUPPOSED to work, and that she doesnt have to buy THIS particular place just because her realtor tells her to.

I would have never agreed to pay $200K for the place. The Zillow bottom range estimate is about $170K. I’m not sure she ‘gets’ that she is probably paying too much.

She also had reservations about FHA loans because she suggested that “those loans are for poor people!”

Sigh….

[Author]

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