Long time Pigg viewer is trying to run the numbers.

[Fletch]

peterb- I’m interested to know why you’re thinking that the Govt’s newly announced plan doesn’t stop the drop and push prices sideways. Is it simply a lack of faith that the Gov’t can do anything right? I share this sentiment in the long term, but I wonder: if they succeed in stemming foreclosures through payment reductions (be it interest rate or principal reductions) and moratoriums, won’t that indeed cause a leveling of prices, near term?

(You may recall I decided to sell my house a few months ago before I got into a negative equity situation and I appreciated your comments then. I’m hoping the fact that I’m now debt-free with a solid job is a better position to be in then counting on the aforementioned Gov’t homeowner rescue. )

[temeculaguy]

I ran the same numbers and used the same rationale but please don’t apply my purchase to the O.C., you still have a ways to go. Use this formula, when P&I of the full purchase price is equal to or less than rent, then it’s time. P&I on 550k is 3500 at 6.5, you still have a third to go. I use the P&I since tax offset is about equal to the tax and insurance and use the full purchase price for calculation, not the loan after down payment.

Factor in the difference between your rental and your purchase, they may not be equal, figure out what the rent would be if you rented the same house you plan to buy. In my case my P&I based on purchase price is about 1700, 200 more than my rent, but the purchase house is double the size so I had to factor the rent of the house I was purchasing, which was 2000+, since I was under that, I pulled the trigger.

Wait for 350k based on the numbers you quoted, the financial world is falling apart, it will get there.

There is an old saying about the mortgage tax deduction not being the savior some make it out to be. “Paying $1 to the government is still cheaper than paying $3 to the bank.”

[temeculaguy]

I ran the same numbers and used the same rationale but please don’t apply my purchase to the O.C., you still have a ways to go. Use this formula, when P&I of the full purchase price is equal to or less than rent, then it’s time. P&I on 550k is 3500 at 6.5, you still have a third to go. I use the P&I since tax offset is about equal to the tax and insurance and use the full purchase price for calculation, not the loan after down payment.

Factor in the difference between your rental and your purchase, they may not be equal, figure out what the rent would be if you rented the same house you plan to buy. In my case my P&I based on purchase price is about 1700, 200 more than my rent, but the purchase house is double the size so I had to factor the rent of the house I was purchasing, which was 2000+, since I was under that, I pulled the trigger.

Wait for 350k based on the numbers you quoted, the financial world is falling apart, it will get there.

There is an old saying about the mortgage tax deduction not being the savior some make it out to be. “Paying $1 to the government is still cheaper than paying $3 to the bank.”

[temeculaguy]

I ran the same numbers and used the same rationale but please don’t apply my purchase to the O.C., you still have a ways to go. Use this formula, when P&I of the full purchase price is equal to or less than rent, then it’s time. P&I on 550k is 3500 at 6.5, you still have a third to go. I use the P&I since tax offset is about equal to the tax and insurance and use the full purchase price for calculation, not the loan after down payment.

Factor in the difference between your rental and your purchase, they may not be equal, figure out what the rent would be if you rented the same house you plan to buy. In my case my P&I based on purchase price is about 1700, 200 more than my rent, but the purchase house is double the size so I had to factor the rent of the house I was purchasing, which was 2000+, since I was under that, I pulled the trigger.

Wait for 350k based on the numbers you quoted, the financial world is falling apart, it will get there.

There is an old saying about the mortgage tax deduction not being the savior some make it out to be. “Paying $1 to the government is still cheaper than paying $3 to the bank.”

[temeculaguy]

I ran the same numbers and used the same rationale but please don’t apply my purchase to the O.C., you still have a ways to go. Use this formula, when P&I of the full purchase price is equal to or less than rent, then it’s time. P&I on 550k is 3500 at 6.5, you still have a third to go. I use the P&I since tax offset is about equal to the tax and insurance and use the full purchase price for calculation, not the loan after down payment.

Factor in the difference between your rental and your purchase, they may not be equal, figure out what the rent would be if you rented the same house you plan to buy. In my case my P&I based on purchase price is about 1700, 200 more than my rent, but the purchase house is double the size so I had to factor the rent of the house I was purchasing, which was 2000+, since I was under that, I pulled the trigger.

Wait for 350k based on the numbers you quoted, the financial world is falling apart, it will get there.

There is an old saying about the mortgage tax deduction not being the savior some make it out to be. “Paying $1 to the government is still cheaper than paying $3 to the bank.”

[temeculaguy]

I ran the same numbers and used the same rationale but please don’t apply my purchase to the O.C., you still have a ways to go. Use this formula, when P&I of the full purchase price is equal to or less than rent, then it’s time. P&I on 550k is 3500 at 6.5, you still have a third to go. I use the P&I since tax offset is about equal to the tax and insurance and use the full purchase price for calculation, not the loan after down payment.

Factor in the difference between your rental and your purchase, they may not be equal, figure out what the rent would be if you rented the same house you plan to buy. In my case my P&I based on purchase price is about 1700, 200 more than my rent, but the purchase house is double the size so I had to factor the rent of the house I was purchasing, which was 2000+, since I was under that, I pulled the trigger.

Wait for 350k based on the numbers you quoted, the financial world is falling apart, it will get there.

There is an old saying about the mortgage tax deduction not being the savior some make it out to be. “Paying $1 to the government is still cheaper than paying $3 to the bank.”

[peterb]

Fletch, Yes, I remember you now. Smart move you made!
My reasoning is based mostly on historical evidence. Market forces are almost impossible to deny. Delay, yes, but not deny. But all this aside, unemployment is really gaining momentum at this point. And unemployment is a killer for RE. How will the govt save people that have no income? I am sketical, to say the least.
Are you in a hurry to buy? Sounds like it’s a little better than renting for you. Financially speaking. Are you concernced about missing the “bottom”?
Think about what the world is going through right now. We’ve just seen a world coordinated interest rate cut. When’s the last time that happened? The last 6 years saw every asset class rise to incredible levels. When was the last time that happened? These are historical events that are exremely rare. The down-side for this is really bad.
Massive bank failures and zombifications. State and local govt starting to go BK. Now GM,Ford and all auto makers are in serious do-do.

My advice to anyone in this evironment is to stay liquid and reduce all costs. Eliminate debt. Have cash ready for the future.The more, the better. This is a major contraction in the works. I dont even think that govt jobs may be safe.

[peterb]

Fletch, Yes, I remember you now. Smart move you made!
My reasoning is based mostly on historical evidence. Market forces are almost impossible to deny. Delay, yes, but not deny. But all this aside, unemployment is really gaining momentum at this point. And unemployment is a killer for RE. How will the govt save people that have no income? I am sketical, to say the least.
Are you in a hurry to buy? Sounds like it’s a little better than renting for you. Financially speaking. Are you concernced about missing the “bottom”?
Think about what the world is going through right now. We’ve just seen a world coordinated interest rate cut. When’s the last time that happened? The last 6 years saw every asset class rise to incredible levels. When was the last time that happened? These are historical events that are exremely rare. The down-side for this is really bad.
Massive bank failures and zombifications. State and local govt starting to go BK. Now GM,Ford and all auto makers are in serious do-do.

My advice to anyone in this evironment is to stay liquid and reduce all costs. Eliminate debt. Have cash ready for the future.The more, the better. This is a major contraction in the works. I dont even think that govt jobs may be safe.

[peterb]

Fletch, Yes, I remember you now. Smart move you made!
My reasoning is based mostly on historical evidence. Market forces are almost impossible to deny. Delay, yes, but not deny. But all this aside, unemployment is really gaining momentum at this point. And unemployment is a killer for RE. How will the govt save people that have no income? I am sketical, to say the least.
Are you in a hurry to buy? Sounds like it’s a little better than renting for you. Financially speaking. Are you concernced about missing the “bottom”?
Think about what the world is going through right now. We’ve just seen a world coordinated interest rate cut. When’s the last time that happened? The last 6 years saw every asset class rise to incredible levels. When was the last time that happened? These are historical events that are exremely rare. The down-side for this is really bad.
Massive bank failures and zombifications. State and local govt starting to go BK. Now GM,Ford and all auto makers are in serious do-do.

My advice to anyone in this evironment is to stay liquid and reduce all costs. Eliminate debt. Have cash ready for the future.The more, the better. This is a major contraction in the works. I dont even think that govt jobs may be safe.

[peterb]

Fletch, Yes, I remember you now. Smart move you made!
My reasoning is based mostly on historical evidence. Market forces are almost impossible to deny. Delay, yes, but not deny. But all this aside, unemployment is really gaining momentum at this point. And unemployment is a killer for RE. How will the govt save people that have no income? I am sketical, to say the least.
Are you in a hurry to buy? Sounds like it’s a little better than renting for you. Financially speaking. Are you concernced about missing the “bottom”?
Think about what the world is going through right now. We’ve just seen a world coordinated interest rate cut. When’s the last time that happened? The last 6 years saw every asset class rise to incredible levels. When was the last time that happened? These are historical events that are exremely rare. The down-side for this is really bad.
Massive bank failures and zombifications. State and local govt starting to go BK. Now GM,Ford and all auto makers are in serious do-do.

My advice to anyone in this evironment is to stay liquid and reduce all costs. Eliminate debt. Have cash ready for the future.The more, the better. This is a major contraction in the works. I dont even think that govt jobs may be safe.

[peterb]

Fletch, Yes, I remember you now. Smart move you made!
My reasoning is based mostly on historical evidence. Market forces are almost impossible to deny. Delay, yes, but not deny. But all this aside, unemployment is really gaining momentum at this point. And unemployment is a killer for RE. How will the govt save people that have no income? I am sketical, to say the least.
Are you in a hurry to buy? Sounds like it’s a little better than renting for you. Financially speaking. Are you concernced about missing the “bottom”?
Think about what the world is going through right now. We’ve just seen a world coordinated interest rate cut. When’s the last time that happened? The last 6 years saw every asset class rise to incredible levels. When was the last time that happened? These are historical events that are exremely rare. The down-side for this is really bad.
Massive bank failures and zombifications. State and local govt starting to go BK. Now GM,Ford and all auto makers are in serious do-do.

My advice to anyone in this evironment is to stay liquid and reduce all costs. Eliminate debt. Have cash ready for the future.The more, the better. This is a major contraction in the works. I dont even think that govt jobs may be safe.

[Fletch]

Well you make some solid points Peter. No, I’m not in a hurry to buy again. Though we’re VA loan eligible, I’d like to save up for a down payment (again) to increase my options. We do need a bigger house as we’re expecting our 5th child. I know, I know– I’m insane. Children are not very liquid assets. Not legally, anyway. Hopefully, sitting on the sidelines for two years will allow us to save up and have a better selection of houses when we’re ready to buy in again.

I do think Federal jobs are safe (even though they shouldn’t be). There is no way the Federal government will lose personnel under Obama.

Stu, I hope you don’t think I’m hijacking your thread!

[Fletch]

Well you make some solid points Peter. No, I’m not in a hurry to buy again. Though we’re VA loan eligible, I’d like to save up for a down payment (again) to increase my options. We do need a bigger house as we’re expecting our 5th child. I know, I know– I’m insane. Children are not very liquid assets. Not legally, anyway. Hopefully, sitting on the sidelines for two years will allow us to save up and have a better selection of houses when we’re ready to buy in again.

I do think Federal jobs are safe (even though they shouldn’t be). There is no way the Federal government will lose personnel under Obama.

Stu, I hope you don’t think I’m hijacking your thread!

[Fletch]

Well you make some solid points Peter. No, I’m not in a hurry to buy again. Though we’re VA loan eligible, I’d like to save up for a down payment (again) to increase my options. We do need a bigger house as we’re expecting our 5th child. I know, I know– I’m insane. Children are not very liquid assets. Not legally, anyway. Hopefully, sitting on the sidelines for two years will allow us to save up and have a better selection of houses when we’re ready to buy in again.

I do think Federal jobs are safe (even though they shouldn’t be). There is no way the Federal government will lose personnel under Obama.

Stu, I hope you don’t think I’m hijacking your thread!

[Fletch]

Well you make some solid points Peter. No, I’m not in a hurry to buy again. Though we’re VA loan eligible, I’d like to save up for a down payment (again) to increase my options. We do need a bigger house as we’re expecting our 5th child. I know, I know– I’m insane. Children are not very liquid assets. Not legally, anyway. Hopefully, sitting on the sidelines for two years will allow us to save up and have a better selection of houses when we’re ready to buy in again.

I do think Federal jobs are safe (even though they shouldn’t be). There is no way the Federal government will lose personnel under Obama.

Stu, I hope you don’t think I’m hijacking your thread!

[Author]

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