Honest Opinion Required!

[danielwis]

[quote=creechrr]If you haven’t done so already, go apply for a mortgage. During the process, you may run into something that you hadn’t considered. That something could be a game changer for you.

The process doesn’t take much time and it’ll help confirm what you thought you knew or help to further enlighten you.

My wife and I recently did this. During the process, we discovered that our lender of choice now requires a 15% downpayment on all condo/TH mortgages. We also discovered that PMI would be about half of what I had thought it would be.

Once we sat and ran the numbers based on what we learned, we decided it was not the time for us. After downpayment and closing, our reserves were well below comfort level.

I’d also like to echo what has been said above about children. I’m probably a few years older than you and having my son changed my perspective on a number of things, one of which are the neighborhoods that are acceptable to me.

One thing that has helped me wade through some of the BS, is having some well grounded mature friends (co-workers, friends of the family, family, etc.) to bounce ideas off of and ask questions. I don’t mean the flashy guy that’s constantly talking about all the “stuff” he has. That guy is probably actually broke. I’m talking about the quite sensible guy that has been plugging away for years. This guy can be a source for wealth of knowledge and experience. Take the opportunity to learn from his mistakes.

OT:
Always be mindful that your realtor has a vested interest in your purchase.

Good Luck![/quote]

Agree completely with your OT statement. Realtors have an economic interest in you purchasing a home NOW. Your realtor might be a perfectly fine human being, as many if not most of them are, but you should NEVER rely on their advice. Again, read what Patrick has to say on patrick.net regarding “who will tell you that now is a good time to buy”. The number one person that will tell you its a good time to buy, is the realtor you hired to help you with the process.

[CDMA ENG]

[quote/]
Agree completely with your OT statement. Realtors have an economic interest in you purchasing a home NOW. Your realtor might be a perfectly fine human being, as many if not most of them are, but you should NEVER rely on their advice. Again, read what Patrick has to say on patrick.net regarding “who will tell you that now is a good time to buy”. The number one person that will tell you its a good time to buy, is the realtor you hired to help you with the process.[/quote]

However… You need to exclude our resident realtors on this site from that comment. SD Realtor, sdrealtor, and Urban Realtor have shown themselves to be fine examples of thier industry and you should ask thier opinion and listen chartable.

Also when I was a kid it was 2.5 times? When did the multiplier become 3X? Was it the same people that decided the Debeers commericials should go from one months salary to 3? 😛

CE

[CDMA ENG]

[quote/]
Agree completely with your OT statement. Realtors have an economic interest in you purchasing a home NOW. Your realtor might be a perfectly fine human being, as many if not most of them are, but you should NEVER rely on their advice. Again, read what Patrick has to say on patrick.net regarding “who will tell you that now is a good time to buy”. The number one person that will tell you its a good time to buy, is the realtor you hired to help you with the process.[/quote]

However… You need to exclude our resident realtors on this site from that comment. SD Realtor, sdrealtor, and Urban Realtor have shown themselves to be fine examples of thier industry and you should ask thier opinion and listen chartable.

Also when I was a kid it was 2.5 times? When did the multiplier become 3X? Was it the same people that decided the Debeers commericials should go from one months salary to 3? 😛

CE

[CDMA ENG]

[quote/]
Agree completely with your OT statement. Realtors have an economic interest in you purchasing a home NOW. Your realtor might be a perfectly fine human being, as many if not most of them are, but you should NEVER rely on their advice. Again, read what Patrick has to say on patrick.net regarding “who will tell you that now is a good time to buy”. The number one person that will tell you its a good time to buy, is the realtor you hired to help you with the process.[/quote]

However… You need to exclude our resident realtors on this site from that comment. SD Realtor, sdrealtor, and Urban Realtor have shown themselves to be fine examples of thier industry and you should ask thier opinion and listen chartable.

Also when I was a kid it was 2.5 times? When did the multiplier become 3X? Was it the same people that decided the Debeers commericials should go from one months salary to 3? 😛

CE

[CDMA ENG]

[quote/]
Agree completely with your OT statement. Realtors have an economic interest in you purchasing a home NOW. Your realtor might be a perfectly fine human being, as many if not most of them are, but you should NEVER rely on their advice. Again, read what Patrick has to say on patrick.net regarding “who will tell you that now is a good time to buy”. The number one person that will tell you its a good time to buy, is the realtor you hired to help you with the process.[/quote]

However… You need to exclude our resident realtors on this site from that comment. SD Realtor, sdrealtor, and Urban Realtor have shown themselves to be fine examples of thier industry and you should ask thier opinion and listen chartable.

Also when I was a kid it was 2.5 times? When did the multiplier become 3X? Was it the same people that decided the Debeers commericials should go from one months salary to 3? 😛

CE

[CDMA ENG]

[quote/]
Agree completely with your OT statement. Realtors have an economic interest in you purchasing a home NOW. Your realtor might be a perfectly fine human being, as many if not most of them are, but you should NEVER rely on their advice. Again, read what Patrick has to say on patrick.net regarding “who will tell you that now is a good time to buy”. The number one person that will tell you its a good time to buy, is the realtor you hired to help you with the process.[/quote]

However… You need to exclude our resident realtors on this site from that comment. SD Realtor, sdrealtor, and Urban Realtor have shown themselves to be fine examples of thier industry and you should ask thier opinion and listen chartable.

Also when I was a kid it was 2.5 times? When did the multiplier become 3X? Was it the same people that decided the Debeers commericials should go from one months salary to 3? 😛

CE

[sdduuuude]

Some thoughts for you:

You mention low interest rates. Be careful there. I believe, as do many Piggs, that buying when prices are low and interest rates high is much better than buying high when rates are low. You will achieve better asset growth buying at a low price, and you will be able to later refinance.

Also whether prices are low or high may depend heavily on the ‘hood where you buy. If I take the $390K price one of the posters mentioned, those neighborhoods may have already been hit pretty hard. Still, economic uncertainty should make you take pause, for sure.

Lastly, you’ll do so much better waiting until you have 20% down. Most importantly, you’ll avoid PMI and can go for a conventional loan. I’m not sure of why, but I know HLS is not fond of FHA loans and that is good enough for me to suspect you may not want one.

My best advice is this. I have given this advice to many both on and off this board:

Take the monthly payment of a house you would buy (include monthly principal, interest, prop tax, insurance, maintenance). Take your current rent amount. Subtract the two. (I’m assuming the payment is higher). Put that much into the bank every month until for at least a year, or until you have a 20% down payment – whichever comes later. When you reach 20%, you will be very close to ready to buy.

An obvious benefit is that you force yourself to save money, build a down payment, and thereby lower your payment when you do by.

A hidden benefit of this plan is that it makes you feel comfortable about making the house payment, because you effectively have been making it for a year. You lived without that extra money so you will be 100% confident that you can manage the payment.

If you find it difficult to put that much money away, you certainly aren’t ready to buy.

[sdduuuude]

Some thoughts for you:

You mention low interest rates. Be careful there. I believe, as do many Piggs, that buying when prices are low and interest rates high is much better than buying high when rates are low. You will achieve better asset growth buying at a low price, and you will be able to later refinance.

Also whether prices are low or high may depend heavily on the ‘hood where you buy. If I take the $390K price one of the posters mentioned, those neighborhoods may have already been hit pretty hard. Still, economic uncertainty should make you take pause, for sure.

Lastly, you’ll do so much better waiting until you have 20% down. Most importantly, you’ll avoid PMI and can go for a conventional loan. I’m not sure of why, but I know HLS is not fond of FHA loans and that is good enough for me to suspect you may not want one.

My best advice is this. I have given this advice to many both on and off this board:

Take the monthly payment of a house you would buy (include monthly principal, interest, prop tax, insurance, maintenance). Take your current rent amount. Subtract the two. (I’m assuming the payment is higher). Put that much into the bank every month until for at least a year, or until you have a 20% down payment – whichever comes later. When you reach 20%, you will be very close to ready to buy.

An obvious benefit is that you force yourself to save money, build a down payment, and thereby lower your payment when you do by.

A hidden benefit of this plan is that it makes you feel comfortable about making the house payment, because you effectively have been making it for a year. You lived without that extra money so you will be 100% confident that you can manage the payment.

If you find it difficult to put that much money away, you certainly aren’t ready to buy.

[sdduuuude]

Some thoughts for you:

You mention low interest rates. Be careful there. I believe, as do many Piggs, that buying when prices are low and interest rates high is much better than buying high when rates are low. You will achieve better asset growth buying at a low price, and you will be able to later refinance.

Also whether prices are low or high may depend heavily on the ‘hood where you buy. If I take the $390K price one of the posters mentioned, those neighborhoods may have already been hit pretty hard. Still, economic uncertainty should make you take pause, for sure.

Lastly, you’ll do so much better waiting until you have 20% down. Most importantly, you’ll avoid PMI and can go for a conventional loan. I’m not sure of why, but I know HLS is not fond of FHA loans and that is good enough for me to suspect you may not want one.

My best advice is this. I have given this advice to many both on and off this board:

Take the monthly payment of a house you would buy (include monthly principal, interest, prop tax, insurance, maintenance). Take your current rent amount. Subtract the two. (I’m assuming the payment is higher). Put that much into the bank every month until for at least a year, or until you have a 20% down payment – whichever comes later. When you reach 20%, you will be very close to ready to buy.

An obvious benefit is that you force yourself to save money, build a down payment, and thereby lower your payment when you do by.

A hidden benefit of this plan is that it makes you feel comfortable about making the house payment, because you effectively have been making it for a year. You lived without that extra money so you will be 100% confident that you can manage the payment.

If you find it difficult to put that much money away, you certainly aren’t ready to buy.

[sdduuuude]

Some thoughts for you:

You mention low interest rates. Be careful there. I believe, as do many Piggs, that buying when prices are low and interest rates high is much better than buying high when rates are low. You will achieve better asset growth buying at a low price, and you will be able to later refinance.

Also whether prices are low or high may depend heavily on the ‘hood where you buy. If I take the $390K price one of the posters mentioned, those neighborhoods may have already been hit pretty hard. Still, economic uncertainty should make you take pause, for sure.

Lastly, you’ll do so much better waiting until you have 20% down. Most importantly, you’ll avoid PMI and can go for a conventional loan. I’m not sure of why, but I know HLS is not fond of FHA loans and that is good enough for me to suspect you may not want one.

My best advice is this. I have given this advice to many both on and off this board:

Take the monthly payment of a house you would buy (include monthly principal, interest, prop tax, insurance, maintenance). Take your current rent amount. Subtract the two. (I’m assuming the payment is higher). Put that much into the bank every month until for at least a year, or until you have a 20% down payment – whichever comes later. When you reach 20%, you will be very close to ready to buy.

An obvious benefit is that you force yourself to save money, build a down payment, and thereby lower your payment when you do by.

A hidden benefit of this plan is that it makes you feel comfortable about making the house payment, because you effectively have been making it for a year. You lived without that extra money so you will be 100% confident that you can manage the payment.

If you find it difficult to put that much money away, you certainly aren’t ready to buy.

[sdduuuude]

Some thoughts for you:

You mention low interest rates. Be careful there. I believe, as do many Piggs, that buying when prices are low and interest rates high is much better than buying high when rates are low. You will achieve better asset growth buying at a low price, and you will be able to later refinance.

Also whether prices are low or high may depend heavily on the ‘hood where you buy. If I take the $390K price one of the posters mentioned, those neighborhoods may have already been hit pretty hard. Still, economic uncertainty should make you take pause, for sure.

Lastly, you’ll do so much better waiting until you have 20% down. Most importantly, you’ll avoid PMI and can go for a conventional loan. I’m not sure of why, but I know HLS is not fond of FHA loans and that is good enough for me to suspect you may not want one.

My best advice is this. I have given this advice to many both on and off this board:

Take the monthly payment of a house you would buy (include monthly principal, interest, prop tax, insurance, maintenance). Take your current rent amount. Subtract the two. (I’m assuming the payment is higher). Put that much into the bank every month until for at least a year, or until you have a 20% down payment – whichever comes later. When you reach 20%, you will be very close to ready to buy.

An obvious benefit is that you force yourself to save money, build a down payment, and thereby lower your payment when you do by.

A hidden benefit of this plan is that it makes you feel comfortable about making the house payment, because you effectively have been making it for a year. You lived without that extra money so you will be 100% confident that you can manage the payment.

If you find it difficult to put that much money away, you certainly aren’t ready to buy.

[sdrealtor]

A “Rule of thumb” is just that and you need to look deeper. Here’s an extreme example_ say you make 50K a year but just inherited $10M. Should you just limit yourself to some multple of your income. I know this is a silly example but the truth is you really need to look at the total payment relative to your income to make the best decision.

I also dont know whether you will be able to buy low in high interest rate environment and refinance later to rates anything approaching where we are at today. Whose to say prices arent low today either? In some parts of SD, they seem to be. It all depends where you are looking. The best advice is to buy something you love that will keep you happy for the next 5 to 10 years if not longer. Something that you can easily afford and something that is close to buy vs. rent parity.

[sdrealtor]

A “Rule of thumb” is just that and you need to look deeper. Here’s an extreme example_ say you make 50K a year but just inherited $10M. Should you just limit yourself to some multple of your income. I know this is a silly example but the truth is you really need to look at the total payment relative to your income to make the best decision.

I also dont know whether you will be able to buy low in high interest rate environment and refinance later to rates anything approaching where we are at today. Whose to say prices arent low today either? In some parts of SD, they seem to be. It all depends where you are looking. The best advice is to buy something you love that will keep you happy for the next 5 to 10 years if not longer. Something that you can easily afford and something that is close to buy vs. rent parity.

[sdrealtor]

A “Rule of thumb” is just that and you need to look deeper. Here’s an extreme example_ say you make 50K a year but just inherited $10M. Should you just limit yourself to some multple of your income. I know this is a silly example but the truth is you really need to look at the total payment relative to your income to make the best decision.

I also dont know whether you will be able to buy low in high interest rate environment and refinance later to rates anything approaching where we are at today. Whose to say prices arent low today either? In some parts of SD, they seem to be. It all depends where you are looking. The best advice is to buy something you love that will keep you happy for the next 5 to 10 years if not longer. Something that you can easily afford and something that is close to buy vs. rent parity.

[sdrealtor]

A “Rule of thumb” is just that and you need to look deeper. Here’s an extreme example_ say you make 50K a year but just inherited $10M. Should you just limit yourself to some multple of your income. I know this is a silly example but the truth is you really need to look at the total payment relative to your income to make the best decision.

I also dont know whether you will be able to buy low in high interest rate environment and refinance later to rates anything approaching where we are at today. Whose to say prices arent low today either? In some parts of SD, they seem to be. It all depends where you are looking. The best advice is to buy something you love that will keep you happy for the next 5 to 10 years if not longer. Something that you can easily afford and something that is close to buy vs. rent parity.

[Author]

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