High Interest rates replace high prices?

[Newblet]

I live in Orange County and graduated college completely priced out of housing. Now I have $100k for a down payment on a house (I was irresponsible with my money, but I got lucky). I am worried that there might be a possibilty that once housing prices return to sanity the interest rate will have sky-rocketed leaving me with an equally unaffordable mortgage (for the 140k gross household range). Is this a real possibilty?

[patientrenter]

Newblet, I wouldn’t fret too much about high interest rates. There’s a good chance you’ll be able to find some lender who will give you a loan with low initial payments, and then you can re-finance down the road when interest rates decline again.

Just make sure that the price of the home is something you can afford – not the monthly payments, the price. If you had to save all the money to buy the house, and you put all your savings to that purpose, how long would it take you? If it would take you 20 years, then you’re not leaving many options for retirement savings or other needs.

Patient renter in OC

[NotCranky]

This is a tiny bit different response.

No matter what happens with the exception of losing your
job(s) you will be in the drivers seat, if you buy a house you can afford. I usually say buy a house you can easily afford but then I can sense this eerie silence after I do. The theory is that price comes down further to compensate at least partially for interest rates with the added benefit, but not guarantee, of refinancing to a lower rate further down the road.

Don’t confuse the refinance part with the situations you are undoubtedly hearing about in which people were given the same promise, when values we unreasonably high and rates we artificially low. Never buy needing the option of refinancing as a bailout from the beginning.

patient renter. “There’s a good chance you’ll be able to find some lender who will give you a loan with low initial payments,”
Why does the o.p. need “low initial payments” on a house they can afford?

[NeetaT]

I hope interest rates skyrocket. If a 10% interest rate means fewer people qualify, this should hasten the downturn.
I would rather own a $200k home at 10% than a $400k home at 5%. This just means lower property tax which is an overwhelming burden to homeowners.

[Jumby]

NeetaT,

I love you how you find a way to weave property taxes into every conversation….people usually don’t consider this on going expense…

[NeetaT]

“people usually don’t consider this on going expense…”

Yes, I believe you are correct in your assertion. People seem to be apathetic towards the subject of property tax, maybe because it’s out of one’s control. If San Diego or any other municipality can justify the need to spend two to three times what they spent 5yrs ago, I will listen. But I must confess that if you do the math, there is no way that much money is needed to fund a city. Give the property owners a break and let them spend the saved money on other things. If I were to buy a house now, I would possibly be paying more tax than my neighbor who bought several years ago all for the same sub standard services. I realize that very few people share my view including my wife.

[patientlywaiting]

NeetaT, I completely share your view.
The services were getting are certainly not proportional to the increase in property taxes we are paying.

[patientlywaiting]

NeetaT, I completely share your view.
The services were getting are certainly not proportional to the increase in property taxes we are paying.

[patientlywaiting]

NeetaT, I completely share your view.
The services were getting are certainly not proportional to the increase in property taxes we are paying.

[patientlywaiting]

NeetaT, I completely share your view.
The services were getting are certainly not proportional to the increase in property taxes we are paying.

[patientlywaiting]

NeetaT, I completely share your view.
The services were getting are certainly not proportional to the increase in property taxes we are paying.

[Raybyrnes]

Has it ever been considered that we were underpaying for services. I’m throwing it out there becasue of wehre I come from (New York). Go to Jones beach or any park in New York and you are paying an arma nad a leg for parking. Drive on the major interstates and you are paying for tolls. I want to pay as little on taxes as I can but I realize that just becaeu you pay more doesn’t necessarily mean that you are not getting what you pay for. You might have been just getting a better deal on it before.

PS

I say this after taking a Friday off to sepand with my son and to my dismay The Public Library does not open until 12 on Friday. It was a little frustrating to have a 3 year old asking why he can’t get his pirate books.

[Raybyrnes]

Has it ever been considered that we were underpaying for services. I’m throwing it out there becasue of wehre I come from (New York). Go to Jones beach or any park in New York and you are paying an arma nad a leg for parking. Drive on the major interstates and you are paying for tolls. I want to pay as little on taxes as I can but I realize that just becaeu you pay more doesn’t necessarily mean that you are not getting what you pay for. You might have been just getting a better deal on it before.

PS

I say this after taking a Friday off to sepand with my son and to my dismay The Public Library does not open until 12 on Friday. It was a little frustrating to have a 3 year old asking why he can’t get his pirate books.

[Raybyrnes]

Has it ever been considered that we were underpaying for services. I’m throwing it out there becasue of wehre I come from (New York). Go to Jones beach or any park in New York and you are paying an arma nad a leg for parking. Drive on the major interstates and you are paying for tolls. I want to pay as little on taxes as I can but I realize that just becaeu you pay more doesn’t necessarily mean that you are not getting what you pay for. You might have been just getting a better deal on it before.

PS

I say this after taking a Friday off to sepand with my son and to my dismay The Public Library does not open until 12 on Friday. It was a little frustrating to have a 3 year old asking why he can’t get his pirate books.

[Raybyrnes]

Has it ever been considered that we were underpaying for services. I’m throwing it out there becasue of wehre I come from (New York). Go to Jones beach or any park in New York and you are paying an arma nad a leg for parking. Drive on the major interstates and you are paying for tolls. I want to pay as little on taxes as I can but I realize that just becaeu you pay more doesn’t necessarily mean that you are not getting what you pay for. You might have been just getting a better deal on it before.

PS

I say this after taking a Friday off to sepand with my son and to my dismay The Public Library does not open until 12 on Friday. It was a little frustrating to have a 3 year old asking why he can’t get his pirate books.

[Raybyrnes]

Has it ever been considered that we were underpaying for services. I’m throwing it out there becasue of wehre I come from (New York). Go to Jones beach or any park in New York and you are paying an arma nad a leg for parking. Drive on the major interstates and you are paying for tolls. I want to pay as little on taxes as I can but I realize that just becaeu you pay more doesn’t necessarily mean that you are not getting what you pay for. You might have been just getting a better deal on it before.

PS

I say this after taking a Friday off to sepand with my son and to my dismay The Public Library does not open until 12 on Friday. It was a little frustrating to have a 3 year old asking why he can’t get his pirate books.

[NeetaT]

“people usually don’t consider this on going expense…”

Yes, I believe you are correct in your assertion. People seem to be apathetic towards the subject of property tax, maybe because it’s out of one’s control. If San Diego or any other municipality can justify the need to spend two to three times what they spent 5yrs ago, I will listen. But I must confess that if you do the math, there is no way that much money is needed to fund a city. Give the property owners a break and let them spend the saved money on other things. If I were to buy a house now, I would possibly be paying more tax than my neighbor who bought several years ago all for the same sub standard services. I realize that very few people share my view including my wife.

[NeetaT]

“people usually don’t consider this on going expense…”

Yes, I believe you are correct in your assertion. People seem to be apathetic towards the subject of property tax, maybe because it’s out of one’s control. If San Diego or any other municipality can justify the need to spend two to three times what they spent 5yrs ago, I will listen. But I must confess that if you do the math, there is no way that much money is needed to fund a city. Give the property owners a break and let them spend the saved money on other things. If I were to buy a house now, I would possibly be paying more tax than my neighbor who bought several years ago all for the same sub standard services. I realize that very few people share my view including my wife.

[NeetaT]

“people usually don’t consider this on going expense…”

Yes, I believe you are correct in your assertion. People seem to be apathetic towards the subject of property tax, maybe because it’s out of one’s control. If San Diego or any other municipality can justify the need to spend two to three times what they spent 5yrs ago, I will listen. But I must confess that if you do the math, there is no way that much money is needed to fund a city. Give the property owners a break and let them spend the saved money on other things. If I were to buy a house now, I would possibly be paying more tax than my neighbor who bought several years ago all for the same sub standard services. I realize that very few people share my view including my wife.

[NeetaT]

“people usually don’t consider this on going expense…”

Yes, I believe you are correct in your assertion. People seem to be apathetic towards the subject of property tax, maybe because it’s out of one’s control. If San Diego or any other municipality can justify the need to spend two to three times what they spent 5yrs ago, I will listen. But I must confess that if you do the math, there is no way that much money is needed to fund a city. Give the property owners a break and let them spend the saved money on other things. If I were to buy a house now, I would possibly be paying more tax than my neighbor who bought several years ago all for the same sub standard services. I realize that very few people share my view including my wife.

[Jumby]

NeetaT,

I love you how you find a way to weave property taxes into every conversation….people usually don’t consider this on going expense…

[Jumby]

NeetaT,

I love you how you find a way to weave property taxes into every conversation….people usually don’t consider this on going expense…

[Jumby]

NeetaT,

I love you how you find a way to weave property taxes into every conversation….people usually don’t consider this on going expense…

[Jumby]

NeetaT,

I love you how you find a way to weave property taxes into every conversation….people usually don’t consider this on going expense…

[NeetaT]

I hope interest rates skyrocket. If a 10% interest rate means fewer people qualify, this should hasten the downturn.
I would rather own a $200k home at 10% than a $400k home at 5%. This just means lower property tax which is an overwhelming burden to homeowners.

[NeetaT]

I hope interest rates skyrocket. If a 10% interest rate means fewer people qualify, this should hasten the downturn.
I would rather own a $200k home at 10% than a $400k home at 5%. This just means lower property tax which is an overwhelming burden to homeowners.

[NeetaT]

I hope interest rates skyrocket. If a 10% interest rate means fewer people qualify, this should hasten the downturn.
I would rather own a $200k home at 10% than a $400k home at 5%. This just means lower property tax which is an overwhelming burden to homeowners.

[NeetaT]

I hope interest rates skyrocket. If a 10% interest rate means fewer people qualify, this should hasten the downturn.
I would rather own a $200k home at 10% than a $400k home at 5%. This just means lower property tax which is an overwhelming burden to homeowners.

[patientrenter]

Rustico: “Why does the o.p. need “low initial payments” on a house they can afford?”

Using my (extremely conservative personal) standards for affordability, they wouldn’t need a low initial payment loan at all, even if interest rates were 20%. But I recognize others have more normal affordability standards. If interest rates went back to 15%, and house prices plummeted, I wouldn’t have any problem advising a young person on their way up to stretch a little for a more expensive property (by a little, maybe 10-25% more). They could then either live on rice and beans for 5 or 10 years, or take on a loan with initial payments for that period that are a little lower than a level payment loan, maybe 5-15% less for 5 years.

Patient renter in OC

[patientrenter]

Rustico: “Why does the o.p. need “low initial payments” on a house they can afford?”

Using my (extremely conservative personal) standards for affordability, they wouldn’t need a low initial payment loan at all, even if interest rates were 20%. But I recognize others have more normal affordability standards. If interest rates went back to 15%, and house prices plummeted, I wouldn’t have any problem advising a young person on their way up to stretch a little for a more expensive property (by a little, maybe 10-25% more). They could then either live on rice and beans for 5 or 10 years, or take on a loan with initial payments for that period that are a little lower than a level payment loan, maybe 5-15% less for 5 years.

Patient renter in OC

[patientrenter]

Rustico: “Why does the o.p. need “low initial payments” on a house they can afford?”

Using my (extremely conservative personal) standards for affordability, they wouldn’t need a low initial payment loan at all, even if interest rates were 20%. But I recognize others have more normal affordability standards. If interest rates went back to 15%, and house prices plummeted, I wouldn’t have any problem advising a young person on their way up to stretch a little for a more expensive property (by a little, maybe 10-25% more). They could then either live on rice and beans for 5 or 10 years, or take on a loan with initial payments for that period that are a little lower than a level payment loan, maybe 5-15% less for 5 years.

Patient renter in OC

[patientrenter]

Rustico: “Why does the o.p. need “low initial payments” on a house they can afford?”

Using my (extremely conservative personal) standards for affordability, they wouldn’t need a low initial payment loan at all, even if interest rates were 20%. But I recognize others have more normal affordability standards. If interest rates went back to 15%, and house prices plummeted, I wouldn’t have any problem advising a young person on their way up to stretch a little for a more expensive property (by a little, maybe 10-25% more). They could then either live on rice and beans for 5 or 10 years, or take on a loan with initial payments for that period that are a little lower than a level payment loan, maybe 5-15% less for 5 years.

Patient renter in OC

[patientrenter]

Rustico: “Why does the o.p. need “low initial payments” on a house they can afford?”

Using my (extremely conservative personal) standards for affordability, they wouldn’t need a low initial payment loan at all, even if interest rates were 20%. But I recognize others have more normal affordability standards. If interest rates went back to 15%, and house prices plummeted, I wouldn’t have any problem advising a young person on their way up to stretch a little for a more expensive property (by a little, maybe 10-25% more). They could then either live on rice and beans for 5 or 10 years, or take on a loan with initial payments for that period that are a little lower than a level payment loan, maybe 5-15% less for 5 years.

Patient renter in OC

[NotCranky]

This is a tiny bit different response.

No matter what happens with the exception of losing your
job(s) you will be in the drivers seat, if you buy a house you can afford. I usually say buy a house you can easily afford but then I can sense this eerie silence after I do. The theory is that price comes down further to compensate at least partially for interest rates with the added benefit, but not guarantee, of refinancing to a lower rate further down the road.

Don’t confuse the refinance part with the situations you are undoubtedly hearing about in which people were given the same promise, when values we unreasonably high and rates we artificially low. Never buy needing the option of refinancing as a bailout from the beginning.

patient renter. “There’s a good chance you’ll be able to find some lender who will give you a loan with low initial payments,”
Why does the o.p. need “low initial payments” on a house they can afford?

[NotCranky]

This is a tiny bit different response.

No matter what happens with the exception of losing your
job(s) you will be in the drivers seat, if you buy a house you can afford. I usually say buy a house you can easily afford but then I can sense this eerie silence after I do. The theory is that price comes down further to compensate at least partially for interest rates with the added benefit, but not guarantee, of refinancing to a lower rate further down the road.

Don’t confuse the refinance part with the situations you are undoubtedly hearing about in which people were given the same promise, when values we unreasonably high and rates we artificially low. Never buy needing the option of refinancing as a bailout from the beginning.

patient renter. “There’s a good chance you’ll be able to find some lender who will give you a loan with low initial payments,”
Why does the o.p. need “low initial payments” on a house they can afford?

[NotCranky]

This is a tiny bit different response.

No matter what happens with the exception of losing your
job(s) you will be in the drivers seat, if you buy a house you can afford. I usually say buy a house you can easily afford but then I can sense this eerie silence after I do. The theory is that price comes down further to compensate at least partially for interest rates with the added benefit, but not guarantee, of refinancing to a lower rate further down the road.

Don’t confuse the refinance part with the situations you are undoubtedly hearing about in which people were given the same promise, when values we unreasonably high and rates we artificially low. Never buy needing the option of refinancing as a bailout from the beginning.

patient renter. “There’s a good chance you’ll be able to find some lender who will give you a loan with low initial payments,”
Why does the o.p. need “low initial payments” on a house they can afford?

[NotCranky]

This is a tiny bit different response.

No matter what happens with the exception of losing your
job(s) you will be in the drivers seat, if you buy a house you can afford. I usually say buy a house you can easily afford but then I can sense this eerie silence after I do. The theory is that price comes down further to compensate at least partially for interest rates with the added benefit, but not guarantee, of refinancing to a lower rate further down the road.

Don’t confuse the refinance part with the situations you are undoubtedly hearing about in which people were given the same promise, when values we unreasonably high and rates we artificially low. Never buy needing the option of refinancing as a bailout from the beginning.

patient renter. “There’s a good chance you’ll be able to find some lender who will give you a loan with low initial payments,”
Why does the o.p. need “low initial payments” on a house they can afford?

[patientrenter]

Newblet, I wouldn’t fret too much about high interest rates. There’s a good chance you’ll be able to find some lender who will give you a loan with low initial payments, and then you can re-finance down the road when interest rates decline again.

Just make sure that the price of the home is something you can afford – not the monthly payments, the price. If you had to save all the money to buy the house, and you put all your savings to that purpose, how long would it take you? If it would take you 20 years, then you’re not leaving many options for retirement savings or other needs.

Patient renter in OC

[patientrenter]

Newblet, I wouldn’t fret too much about high interest rates. There’s a good chance you’ll be able to find some lender who will give you a loan with low initial payments, and then you can re-finance down the road when interest rates decline again.

Just make sure that the price of the home is something you can afford – not the monthly payments, the price. If you had to save all the money to buy the house, and you put all your savings to that purpose, how long would it take you? If it would take you 20 years, then you’re not leaving many options for retirement savings or other needs.

Patient renter in OC

[patientrenter]

Newblet, I wouldn’t fret too much about high interest rates. There’s a good chance you’ll be able to find some lender who will give you a loan with low initial payments, and then you can re-finance down the road when interest rates decline again.

Just make sure that the price of the home is something you can afford – not the monthly payments, the price. If you had to save all the money to buy the house, and you put all your savings to that purpose, how long would it take you? If it would take you 20 years, then you’re not leaving many options for retirement savings or other needs.

Patient renter in OC

[patientrenter]

Newblet, I wouldn’t fret too much about high interest rates. There’s a good chance you’ll be able to find some lender who will give you a loan with low initial payments, and then you can re-finance down the road when interest rates decline again.

Just make sure that the price of the home is something you can afford – not the monthly payments, the price. If you had to save all the money to buy the house, and you put all your savings to that purpose, how long would it take you? If it would take you 20 years, then you’re not leaving many options for retirement savings or other needs.

Patient renter in OC

[Newblet]

Is there any chance that there will be a time window after prices tank while rates are still low? Or will the fantastic Fed step in before then? Oh and good point on the property tax comment, certainly true.

[Newblet]

Is there any chance that there will be a time window after prices tank while rates are still low? Or will the fantastic Fed step in before then? Oh and good point on the property tax comment, certainly true.

[Newblet]

Is there any chance that there will be a time window after prices tank while rates are still low? Or will the fantastic Fed step in before then? Oh and good point on the property tax comment, certainly true.

[Newblet]

Is there any chance that there will be a time window after prices tank while rates are still low? Or will the fantastic Fed step in before then? Oh and good point on the property tax comment, certainly true.

[Newblet]

Is there any chance that there will be a time window after prices tank while rates are still low? Or will the fantastic Fed step in before then? Oh and good point on the property tax comment, certainly true.

[no_such_reality]

Newblet, you’re somewhat right and somewhat wrong. Since you were in OC, you may recall the OC Register housing section had a set of charts. One was price over the last year, one was payment based on ‘standard’ loans. While pricing rocketed through the roof, the pricing barely moved.

Once the optional payment loans appeared in mass, the payment went even lower.

So you are right, interest rates may rocket upward once the “credit crunch” is over and the Fed returns to fighting inflation. All that will happen though is home pricing will go even lower.

When many on the board talk about prices falling 30%, 40% or so, they are making the comparison based on today’s interest rate environment and today’s rental pricing.

If rental pricing softens, the prices will have more downward pressure.

If interest rates increase, the prices will have more downward pressure too.

IrvineRenter on the IHB covered how the increases in the buyer’s loan terms accentuate the pricing loss. http://www.irvinehousingblog.com/2007/05/07/your-buyers-loan-terms/

To summarize for a short answer. In the current environment, median home price is $460K. It’s expected to correct, let’s say to fall $350K for example as ‘fair’ supportable price.

If interest rates rise to say 10%, instead of falling to $350K, the prices will fall to $240K. The reason is simple. The payments on $350K at 6% and the payment on $240K at 10% are the same.

The housing bubble is correcting because of affordability. If rates rise, affordability falls and home prices must correct further to restore affordability.

[no_such_reality]

Newblet, you’re somewhat right and somewhat wrong. Since you were in OC, you may recall the OC Register housing section had a set of charts. One was price over the last year, one was payment based on ‘standard’ loans. While pricing rocketed through the roof, the pricing barely moved.

Once the optional payment loans appeared in mass, the payment went even lower.

So you are right, interest rates may rocket upward once the “credit crunch” is over and the Fed returns to fighting inflation. All that will happen though is home pricing will go even lower.

When many on the board talk about prices falling 30%, 40% or so, they are making the comparison based on today’s interest rate environment and today’s rental pricing.

If rental pricing softens, the prices will have more downward pressure.

If interest rates increase, the prices will have more downward pressure too.

IrvineRenter on the IHB covered how the increases in the buyer’s loan terms accentuate the pricing loss. http://www.irvinehousingblog.com/2007/05/07/your-buyers-loan-terms/

To summarize for a short answer. In the current environment, median home price is $460K. It’s expected to correct, let’s say to fall $350K for example as ‘fair’ supportable price.

If interest rates rise to say 10%, instead of falling to $350K, the prices will fall to $240K. The reason is simple. The payments on $350K at 6% and the payment on $240K at 10% are the same.

The housing bubble is correcting because of affordability. If rates rise, affordability falls and home prices must correct further to restore affordability.

[no_such_reality]

Newblet, you’re somewhat right and somewhat wrong. Since you were in OC, you may recall the OC Register housing section had a set of charts. One was price over the last year, one was payment based on ‘standard’ loans. While pricing rocketed through the roof, the pricing barely moved.

Once the optional payment loans appeared in mass, the payment went even lower.

So you are right, interest rates may rocket upward once the “credit crunch” is over and the Fed returns to fighting inflation. All that will happen though is home pricing will go even lower.

When many on the board talk about prices falling 30%, 40% or so, they are making the comparison based on today’s interest rate environment and today’s rental pricing.

If rental pricing softens, the prices will have more downward pressure.

If interest rates increase, the prices will have more downward pressure too.

IrvineRenter on the IHB covered how the increases in the buyer’s loan terms accentuate the pricing loss. http://www.irvinehousingblog.com/2007/05/07/your-buyers-loan-terms/

To summarize for a short answer. In the current environment, median home price is $460K. It’s expected to correct, let’s say to fall $350K for example as ‘fair’ supportable price.

If interest rates rise to say 10%, instead of falling to $350K, the prices will fall to $240K. The reason is simple. The payments on $350K at 6% and the payment on $240K at 10% are the same.

The housing bubble is correcting because of affordability. If rates rise, affordability falls and home prices must correct further to restore affordability.

[no_such_reality]

Newblet, you’re somewhat right and somewhat wrong. Since you were in OC, you may recall the OC Register housing section had a set of charts. One was price over the last year, one was payment based on ‘standard’ loans. While pricing rocketed through the roof, the pricing barely moved.

Once the optional payment loans appeared in mass, the payment went even lower.

So you are right, interest rates may rocket upward once the “credit crunch” is over and the Fed returns to fighting inflation. All that will happen though is home pricing will go even lower.

When many on the board talk about prices falling 30%, 40% or so, they are making the comparison based on today’s interest rate environment and today’s rental pricing.

If rental pricing softens, the prices will have more downward pressure.

If interest rates increase, the prices will have more downward pressure too.

IrvineRenter on the IHB covered how the increases in the buyer’s loan terms accentuate the pricing loss. http://www.irvinehousingblog.com/2007/05/07/your-buyers-loan-terms/

To summarize for a short answer. In the current environment, median home price is $460K. It’s expected to correct, let’s say to fall $350K for example as ‘fair’ supportable price.

If interest rates rise to say 10%, instead of falling to $350K, the prices will fall to $240K. The reason is simple. The payments on $350K at 6% and the payment on $240K at 10% are the same.

The housing bubble is correcting because of affordability. If rates rise, affordability falls and home prices must correct further to restore affordability.

[no_such_reality]

Newblet, you’re somewhat right and somewhat wrong. Since you were in OC, you may recall the OC Register housing section had a set of charts. One was price over the last year, one was payment based on ‘standard’ loans. While pricing rocketed through the roof, the pricing barely moved.

Once the optional payment loans appeared in mass, the payment went even lower.

So you are right, interest rates may rocket upward once the “credit crunch” is over and the Fed returns to fighting inflation. All that will happen though is home pricing will go even lower.

When many on the board talk about prices falling 30%, 40% or so, they are making the comparison based on today’s interest rate environment and today’s rental pricing.

If rental pricing softens, the prices will have more downward pressure.

If interest rates increase, the prices will have more downward pressure too.

IrvineRenter on the IHB covered how the increases in the buyer’s loan terms accentuate the pricing loss. http://www.irvinehousingblog.com/2007/05/07/your-buyers-loan-terms/

To summarize for a short answer. In the current environment, median home price is $460K. It’s expected to correct, let’s say to fall $350K for example as ‘fair’ supportable price.

If interest rates rise to say 10%, instead of falling to $350K, the prices will fall to $240K. The reason is simple. The payments on $350K at 6% and the payment on $240K at 10% are the same.

The housing bubble is correcting because of affordability. If rates rise, affordability falls and home prices must correct further to restore affordability.

[Newblet]

I suppose it would make sense that high interest rates would apply ADDITIONAL downward pressure to already tanked prices. What doesn’t make sense is for someone making over the median household income to be priced out of the market.

[SD Realtor]

nsr that was well put. Interest rate shock would indeed rachet pricing down in an appropriate manner. My read is that pricing would be slow to respond at first, then catch up, maybe even overshoot a tad, then come back to the correlating interest rate environment. I would also agree that buying a lower priced home in a high interest rate environment is always better then a higher priced home in a low interest rate environment.

Beyond recurring carrying costs there is refinance opportunity sometime down the road, you already have a higher equity stake, and people who are saving or have saved cash are in a good position.

I also think it is not a question of if rates will rise but when… I think in order to get the economic house we all share back in order we need to do this… Unfortunately back in 03 I was spouting off that within a few years rates would HAVE to be higher…

How wrong I was…

[SD Realtor]

nsr that was well put. Interest rate shock would indeed rachet pricing down in an appropriate manner. My read is that pricing would be slow to respond at first, then catch up, maybe even overshoot a tad, then come back to the correlating interest rate environment. I would also agree that buying a lower priced home in a high interest rate environment is always better then a higher priced home in a low interest rate environment.

Beyond recurring carrying costs there is refinance opportunity sometime down the road, you already have a higher equity stake, and people who are saving or have saved cash are in a good position.

I also think it is not a question of if rates will rise but when… I think in order to get the economic house we all share back in order we need to do this… Unfortunately back in 03 I was spouting off that within a few years rates would HAVE to be higher…

How wrong I was…

[SD Realtor]

nsr that was well put. Interest rate shock would indeed rachet pricing down in an appropriate manner. My read is that pricing would be slow to respond at first, then catch up, maybe even overshoot a tad, then come back to the correlating interest rate environment. I would also agree that buying a lower priced home in a high interest rate environment is always better then a higher priced home in a low interest rate environment.

Beyond recurring carrying costs there is refinance opportunity sometime down the road, you already have a higher equity stake, and people who are saving or have saved cash are in a good position.

I also think it is not a question of if rates will rise but when… I think in order to get the economic house we all share back in order we need to do this… Unfortunately back in 03 I was spouting off that within a few years rates would HAVE to be higher…

How wrong I was…

[SD Realtor]

nsr that was well put. Interest rate shock would indeed rachet pricing down in an appropriate manner. My read is that pricing would be slow to respond at first, then catch up, maybe even overshoot a tad, then come back to the correlating interest rate environment. I would also agree that buying a lower priced home in a high interest rate environment is always better then a higher priced home in a low interest rate environment.

Beyond recurring carrying costs there is refinance opportunity sometime down the road, you already have a higher equity stake, and people who are saving or have saved cash are in a good position.

I also think it is not a question of if rates will rise but when… I think in order to get the economic house we all share back in order we need to do this… Unfortunately back in 03 I was spouting off that within a few years rates would HAVE to be higher…

How wrong I was…

[SD Realtor]

nsr that was well put. Interest rate shock would indeed rachet pricing down in an appropriate manner. My read is that pricing would be slow to respond at first, then catch up, maybe even overshoot a tad, then come back to the correlating interest rate environment. I would also agree that buying a lower priced home in a high interest rate environment is always better then a higher priced home in a low interest rate environment.

Beyond recurring carrying costs there is refinance opportunity sometime down the road, you already have a higher equity stake, and people who are saving or have saved cash are in a good position.

I also think it is not a question of if rates will rise but when… I think in order to get the economic house we all share back in order we need to do this… Unfortunately back in 03 I was spouting off that within a few years rates would HAVE to be higher…

How wrong I was…

[SD Realtor]

nsr that was well put. Interest rate shock would indeed rachet pricing down in an appropriate manner. My read is that pricing would be slow to respond at first, then catch up, maybe even overshoot a tad, then come back to the correlating interest rate environment. I would also agree that buying a lower priced home in a high interest rate environment is always better then a higher priced home in a low interest rate environment.

Beyond recurring carrying costs there is refinance opportunity sometime down the road, you already have a higher equity stake, and people who are saving or have saved cash are in a good position.

I also think it is not a question of if rates will rise but when… I think in order to get the economic house we all share back in order we need to do this… Unfortunately back in 03 I was spouting off that within a few years rates would HAVE to be higher…

How wrong I was…

[Newblet]

I suppose it would make sense that high interest rates would apply ADDITIONAL downward pressure to already tanked prices. What doesn’t make sense is for someone making over the median household income to be priced out of the market.

[Newblet]

I suppose it would make sense that high interest rates would apply ADDITIONAL downward pressure to already tanked prices. What doesn’t make sense is for someone making over the median household income to be priced out of the market.

[Newblet]

I suppose it would make sense that high interest rates would apply ADDITIONAL downward pressure to already tanked prices. What doesn’t make sense is for someone making over the median household income to be priced out of the market.

[Newblet]

I suppose it would make sense that high interest rates would apply ADDITIONAL downward pressure to already tanked prices. What doesn’t make sense is for someone making over the median household income to be priced out of the market.

[SHILOH]

Some taxes in the East Coast fund the ongoing maintenance due to the battering weather here and the age of structures. SD roads, infrastructure and property cost less to maintain because they are newer and the weather makes a difference. Paved roads in NE are full of cracks and potholes. Then there is everything that goes into public works around inclement weather. I think it’s harsher. In Massachusetts, there is no state tax on clothing.

[HereWeGo]

Clearly credit is tightening, if not through higher rates, then through lower LTVs and the like.

[NotCranky]

HWG
“Clearly credit is tightening, if not through higher rates, then through lower LTVs and the like.”

Went to wamu today and can confirm this. Higher reserve rquirements and lower LTV,. In fact the woman I was talking with said the LTV had recently been changed from 95 to 75. Fico score requirements seemed higher but I can not confirm. They wanted 720 for stated income. I will answer questions about the info program on a different thread. If anyone wants to try to flame me for the stated income be my guest(on a thread the curious,if there are any, or I started.

BTW. There were 30-40 cubicles at the branch and I wa the only customer. It was lunch time but I would think lots of people take their lunch breaks to shop for loans.

[patientrenter]

Rustico: “…wamu… LTV had recently been changed from 95 to 75”

For months, I’ve been reading that home prices in the near future would be dictated by 20% down requirements and fixed level payments thereafter. But then I see people saying they can get 10% down loans with low initial payments. It didn’t make any sense to me, but HLS and others apparently could still find dumb lenders willing to give cheap high-risk loans.

If I were a lender in California, land of the non-recourse mortgage loan, I sure wouldn’t lend to just about anybody, regardless of FICO, who put less of their own money down than a conservative estimate of the possible 5-year decline in the future market price of the home. Practically speaking, you can’t charge enough in basis points to cover the risk of that loss (unless the taxpayers are providing you with underpriced guarantees through FHA etc).

HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC

[Anonymous]

patient: “HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC”

I hope so. Everyone can’t afford that kind of down payment. In my opinion, people shouldn’t be punished because of the acts of others. Just because someone doesn’t put 20% down doesn’t mean they can’t afford the house or will let it foreclose.

[Anonymous]

patient: “HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC”

I hope so. Everyone can’t afford that kind of down payment. In my opinion, people shouldn’t be punished because of the acts of others. Just because someone doesn’t put 20% down doesn’t mean they can’t afford the house or will let it foreclose.

[Anonymous]

patient: “HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC”

I hope so. Everyone can’t afford that kind of down payment. In my opinion, people shouldn’t be punished because of the acts of others. Just because someone doesn’t put 20% down doesn’t mean they can’t afford the house or will let it foreclose.

[Anonymous]

patient: “HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC”

I hope so. Everyone can’t afford that kind of down payment. In my opinion, people shouldn’t be punished because of the acts of others. Just because someone doesn’t put 20% down doesn’t mean they can’t afford the house or will let it foreclose.

[Anonymous]

patient: “HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC”

I hope so. Everyone can’t afford that kind of down payment. In my opinion, people shouldn’t be punished because of the acts of others. Just because someone doesn’t put 20% down doesn’t mean they can’t afford the house or will let it foreclose.

[patientrenter]

Rustico: “…wamu… LTV had recently been changed from 95 to 75”

For months, I’ve been reading that home prices in the near future would be dictated by 20% down requirements and fixed level payments thereafter. But then I see people saying they can get 10% down loans with low initial payments. It didn’t make any sense to me, but HLS and others apparently could still find dumb lenders willing to give cheap high-risk loans.

If I were a lender in California, land of the non-recourse mortgage loan, I sure wouldn’t lend to just about anybody, regardless of FICO, who put less of their own money down than a conservative estimate of the possible 5-year decline in the future market price of the home. Practically speaking, you can’t charge enough in basis points to cover the risk of that loss (unless the taxpayers are providing you with underpriced guarantees through FHA etc).

HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC

[patientrenter]

Rustico: “…wamu… LTV had recently been changed from 95 to 75”

For months, I’ve been reading that home prices in the near future would be dictated by 20% down requirements and fixed level payments thereafter. But then I see people saying they can get 10% down loans with low initial payments. It didn’t make any sense to me, but HLS and others apparently could still find dumb lenders willing to give cheap high-risk loans.

If I were a lender in California, land of the non-recourse mortgage loan, I sure wouldn’t lend to just about anybody, regardless of FICO, who put less of their own money down than a conservative estimate of the possible 5-year decline in the future market price of the home. Practically speaking, you can’t charge enough in basis points to cover the risk of that loss (unless the taxpayers are providing you with underpriced guarantees through FHA etc).

HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC

[patientrenter]

Rustico: “…wamu… LTV had recently been changed from 95 to 75”

For months, I’ve been reading that home prices in the near future would be dictated by 20% down requirements and fixed level payments thereafter. But then I see people saying they can get 10% down loans with low initial payments. It didn’t make any sense to me, but HLS and others apparently could still find dumb lenders willing to give cheap high-risk loans.

If I were a lender in California, land of the non-recourse mortgage loan, I sure wouldn’t lend to just about anybody, regardless of FICO, who put less of their own money down than a conservative estimate of the possible 5-year decline in the future market price of the home. Practically speaking, you can’t charge enough in basis points to cover the risk of that loss (unless the taxpayers are providing you with underpriced guarantees through FHA etc).

HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC

[patientrenter]

Rustico: “…wamu… LTV had recently been changed from 95 to 75”

For months, I’ve been reading that home prices in the near future would be dictated by 20% down requirements and fixed level payments thereafter. But then I see people saying they can get 10% down loans with low initial payments. It didn’t make any sense to me, but HLS and others apparently could still find dumb lenders willing to give cheap high-risk loans.

If I were a lender in California, land of the non-recourse mortgage loan, I sure wouldn’t lend to just about anybody, regardless of FICO, who put less of their own money down than a conservative estimate of the possible 5-year decline in the future market price of the home. Practically speaking, you can’t charge enough in basis points to cover the risk of that loss (unless the taxpayers are providing you with underpriced guarantees through FHA etc).

HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC

[NotCranky]

HWG
“Clearly credit is tightening, if not through higher rates, then through lower LTVs and the like.”

Went to wamu today and can confirm this. Higher reserve rquirements and lower LTV,. In fact the woman I was talking with said the LTV had recently been changed from 95 to 75. Fico score requirements seemed higher but I can not confirm. They wanted 720 for stated income. I will answer questions about the info program on a different thread. If anyone wants to try to flame me for the stated income be my guest(on a thread the curious,if there are any, or I started.

BTW. There were 30-40 cubicles at the branch and I wa the only customer. It was lunch time but I would think lots of people take their lunch breaks to shop for loans.

[NotCranky]

HWG
“Clearly credit is tightening, if not through higher rates, then through lower LTVs and the like.”

Went to wamu today and can confirm this. Higher reserve rquirements and lower LTV,. In fact the woman I was talking with said the LTV had recently been changed from 95 to 75. Fico score requirements seemed higher but I can not confirm. They wanted 720 for stated income. I will answer questions about the info program on a different thread. If anyone wants to try to flame me for the stated income be my guest(on a thread the curious,if there are any, or I started.

BTW. There were 30-40 cubicles at the branch and I wa the only customer. It was lunch time but I would think lots of people take their lunch breaks to shop for loans.

[NotCranky]

HWG
“Clearly credit is tightening, if not through higher rates, then through lower LTVs and the like.”

Went to wamu today and can confirm this. Higher reserve rquirements and lower LTV,. In fact the woman I was talking with said the LTV had recently been changed from 95 to 75. Fico score requirements seemed higher but I can not confirm. They wanted 720 for stated income. I will answer questions about the info program on a different thread. If anyone wants to try to flame me for the stated income be my guest(on a thread the curious,if there are any, or I started.

BTW. There were 30-40 cubicles at the branch and I wa the only customer. It was lunch time but I would think lots of people take their lunch breaks to shop for loans.

[NotCranky]

HWG
“Clearly credit is tightening, if not through higher rates, then through lower LTVs and the like.”

Went to wamu today and can confirm this. Higher reserve rquirements and lower LTV,. In fact the woman I was talking with said the LTV had recently been changed from 95 to 75. Fico score requirements seemed higher but I can not confirm. They wanted 720 for stated income. I will answer questions about the info program on a different thread. If anyone wants to try to flame me for the stated income be my guest(on a thread the curious,if there are any, or I started.

BTW. There were 30-40 cubicles at the branch and I wa the only customer. It was lunch time but I would think lots of people take their lunch breaks to shop for loans.

[HereWeGo]

Clearly credit is tightening, if not through higher rates, then through lower LTVs and the like.

[HereWeGo]

Clearly credit is tightening, if not through higher rates, then through lower LTVs and the like.

[HereWeGo]

Clearly credit is tightening, if not through higher rates, then through lower LTVs and the like.

[HereWeGo]

Clearly credit is tightening, if not through higher rates, then through lower LTVs and the like.

[SHILOH]

Some taxes in the East Coast fund the ongoing maintenance due to the battering weather here and the age of structures. SD roads, infrastructure and property cost less to maintain because they are newer and the weather makes a difference. Paved roads in NE are full of cracks and potholes. Then there is everything that goes into public works around inclement weather. I think it’s harsher. In Massachusetts, there is no state tax on clothing.

[SHILOH]

Some taxes in the East Coast fund the ongoing maintenance due to the battering weather here and the age of structures. SD roads, infrastructure and property cost less to maintain because they are newer and the weather makes a difference. Paved roads in NE are full of cracks and potholes. Then there is everything that goes into public works around inclement weather. I think it’s harsher. In Massachusetts, there is no state tax on clothing.

[SHILOH]

Some taxes in the East Coast fund the ongoing maintenance due to the battering weather here and the age of structures. SD roads, infrastructure and property cost less to maintain because they are newer and the weather makes a difference. Paved roads in NE are full of cracks and potholes. Then there is everything that goes into public works around inclement weather. I think it’s harsher. In Massachusetts, there is no state tax on clothing.

[SHILOH]

Some taxes in the East Coast fund the ongoing maintenance due to the battering weather here and the age of structures. SD roads, infrastructure and property cost less to maintain because they are newer and the weather makes a difference. Paved roads in NE are full of cracks and potholes. Then there is everything that goes into public works around inclement weather. I think it’s harsher. In Massachusetts, there is no state tax on clothing.

[Author]

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