The worlds best loan

[the dingo]

Hey team,
I know most people say not to buy now, but if you need to refi out of a bad loan, or want to buy a new home under 500k, then check out acornhousing.org this is a non profit group that I just got a loan from.

Believe it or not I got the following loan. 475k 100% financing, no pmi on a 40 year fixed with the first 10 years interest only. It is not an 80/20 it is all on one loan. My rate was 6.1%, but that was in July. (ealier I posted my home cost 445k, but that was counting a credit from the buyer. So if you saw that post that is the reason for the change.)
Here are the stipulations. You can’t make over 90k per year. You must attend two 3 hour counseling classes. It is full doc.
There is also a program called the cadat, where the state of california pays three points to lower your rate even further. This is in the form of a silent second that needs to be paid back when you sell it if ever. We ended up getting the seller to pay this. Hey it’s a buyers market. Also, this loan is not based on credit score at all you can have no credit history. The only stipulation is that you cannot have a late payment in the last 12 months. I know this sounds amazing, and it is. With out it I could not have gotten my new home. The loans are serviced by BofA, so it is solid. They also do refi’s.
One last thing, don’t start shopping until you finish the classes and get your certification from them. They are in no hurry to close loans fast and I had to extend my contingency period to from 17 to 60 days. I thought the seller was going to cry when he got the news.But like I said, It is a buyers market and he agreed. Don’t believe these numbers, check the site and give them a call and you can see from yourself. I hope this helps a lot of people.

[CBad]

Wow, 40 year/100% loan with interest only for the first 10 years and this is considered a good thing? What did you learn in the 6 hours of classes? At least it’s fixed.

[CBad]

Also, if you make under 90K, you can’t afford a 475K loan. That’s why it’s interest only.

[joestool]

Here are the stipulations. You can’t make over 90k per year. You must attend two 3 hour counseling classes. It is full doc.
There is also a program called the cadat, where the state of california pays three points to lower your rate even further. This is in the form of a silent second that needs to be paid back when you sell it if ever.

What gets me is by my making slightly over 90k I have even less buying power in the housing market than you do.
I’m forced to pay taxes that go to subsidize your buying a house you can’t really afford. Thus creating artificial demand driving up the price so now I can’t afford it either. Then, when you eventually default because life changes require you forclose or sell the house in a short sale, I get to pay even more in taxes and inflation to bail you out again.

Enjoy the house.

[joestool]

Here are the stipulations. You can’t make over 90k per year. You must attend two 3 hour counseling classes. It is full doc.
There is also a program called the cadat, where the state of california pays three points to lower your rate even further. This is in the form of a silent second that needs to be paid back when you sell it if ever.

What gets me is by my making slightly over 90k I have even less buying power in the housing market than you do.
I’m forced to pay taxes that go to subsidize your buying a house you can’t really afford. Thus creating artificial demand driving up the price so now I can’t afford it either. Then, when you eventually default because life changes require you forclose or sell the house in a short sale, I get to pay even more in taxes and inflation to bail you out again.

Enjoy the house.

[joestool]

Here are the stipulations. You can’t make over 90k per year. You must attend two 3 hour counseling classes. It is full doc.
There is also a program called the cadat, where the state of california pays three points to lower your rate even further. This is in the form of a silent second that needs to be paid back when you sell it if ever.

What gets me is by my making slightly over 90k I have even less buying power in the housing market than you do.
I’m forced to pay taxes that go to subsidize your buying a house you can’t really afford. Thus creating artificial demand driving up the price so now I can’t afford it either. Then, when you eventually default because life changes require you forclose or sell the house in a short sale, I get to pay even more in taxes and inflation to bail you out again.

Enjoy the house.

[CBad]

Also, if you make under 90K, you can’t afford a 475K loan. That’s why it’s interest only.

[CBad]

Also, if you make under 90K, you can’t afford a 475K loan. That’s why it’s interest only.

[CBad]

Wow, 40 year/100% loan with interest only for the first 10 years and this is considered a good thing? What did you learn in the 6 hours of classes? At least it’s fixed.

[CBad]

Wow, 40 year/100% loan with interest only for the first 10 years and this is considered a good thing? What did you learn in the 6 hours of classes? At least it’s fixed.

[NateK]

I don’t get it??? Didn’t Countrywide try the same ploy and it blew up in their face. The only difference between you and those subprime loans might be the full doc and a couple of classes.

I wish you luck. I hope you don’t add on to our inventory in the near future.

[NateK]

I don’t get it??? Didn’t Countrywide try the same ploy and it blew up in their face. The only difference between you and those subprime loans might be the full doc and a couple of classes.

I wish you luck. I hope you don’t add on to our inventory in the near future.

[NateK]

I don’t get it??? Didn’t Countrywide try the same ploy and it blew up in their face. The only difference between you and those subprime loans might be the full doc and a couple of classes.

I wish you luck. I hope you don’t add on to our inventory in the near future.

[bsrsharma]

I think you got a very good loan. 6.1% APR FIXED for a 40 year loan, 100% LTV, no PMI is just insanely great. What are your payments like?

Those who disapprove – remember: he will be paying his loan with $ that is half its value from today in 10 years, quarter its value in 20 years and 1/8th in 30 years. All the time getting a tax writeoff. If this is not a deal, what is it? In effect, he will be paying just a fraction of the amount owed, in terms of purchasing power.

[djrobsd]

Where’s your logic there, bsrsharma? I’m assuming you talk about the decline of the dollar? Well, when the dollar declines, you don’t think real estate values will stay up do you?! Quite the contrary, they will sink into a big hole, so 1/8th the value of the dollar in 30 years, will probably also mean the property will only be worth 1/8 its original value…

lol

I still see a big flaw in this Acorn program. They are giving you an interest only loan because you can’t afford to pay principal + interest. But, in 10 years, the loan re-casts itself, and you have to begin paying principal. I guess ACORN assumes your income will increase in 10 years and you’ll be able to afford the higher payments?

Looks like the same flawed logic as an ARM to me, only the rate is fixed, but the payment certainly isn’t.

Can a mortgage broker shed some light on how much the payment goes up after the interest only period is done?

[no_such_reality]

It’s a nice loan, with interest only, the payment is around $2400. Not including taxes and insurance.

When it recasts in 10 years… it basically turns into a 30 years fixed at 6.1% making the payment a touch under $2900.

At the income limit, the DTI front end is 33%. That doesn’t leave much for other debt however the income limit, being in California, it’ll greatly help on taxes moving his expense for the next ten years to about $2000/month after taxes.

As long as he’s close to that for comparable rent, he’s good. He’s not having to move every couple years. His rent doesn’t go up an annoying $75/month every year. In ten years, the market will be different.

[no_such_reality]

It’s a nice loan, with interest only, the payment is around $2400. Not including taxes and insurance.

When it recasts in 10 years… it basically turns into a 30 years fixed at 6.1% making the payment a touch under $2900.

At the income limit, the DTI front end is 33%. That doesn’t leave much for other debt however the income limit, being in California, it’ll greatly help on taxes moving his expense for the next ten years to about $2000/month after taxes.

As long as he’s close to that for comparable rent, he’s good. He’s not having to move every couple years. His rent doesn’t go up an annoying $75/month every year. In ten years, the market will be different.

[no_such_reality]

It’s a nice loan, with interest only, the payment is around $2400. Not including taxes and insurance.

When it recasts in 10 years… it basically turns into a 30 years fixed at 6.1% making the payment a touch under $2900.

At the income limit, the DTI front end is 33%. That doesn’t leave much for other debt however the income limit, being in California, it’ll greatly help on taxes moving his expense for the next ten years to about $2000/month after taxes.

As long as he’s close to that for comparable rent, he’s good. He’s not having to move every couple years. His rent doesn’t go up an annoying $75/month every year. In ten years, the market will be different.

[bsrsharma]

djrobsd – we are being so blinded by the flash of the bubble burst that sometimes we forget that macroeconomic dynamics are propelling us to high inflation regime. That means, his 475K loan today is already worth half of that in 10 years when he has to repay with cheap $. When $ declines, real estate prices go up due to the natural forces of inflation. That 475K will be barely sufficient to by a small condo in 10 years – think $8 gas, $15 minimum wage, $2000 rent for a one bedroom apartment, $2000 per Oz Gold, $300 Bbl oil – you get the picture. He will be paying $3000 per month on a monthly salary of of $20K! When everything else doubles, his repayments will look puny.

[kewp]

bsrsharma,

Wages are not inflating.

Wages are flat.

[bsrsharma]

A brisk rise in American wages
Pay rose faster than the cost of living for the first time in years.

American paychecks are rising again at a pace not seen since the 1990s.
The pay increase amounts to 4 percent on average over the past 12 months, and it comes at a very helpful time for millions of households.

For three years, pay increases haven’t kept pace with the rising cost of living. Then came this year’s housing slowdown, which has further squeezed family finances.

Those setbacks, however, are now being offset by rising income. Four percent may not sound like much, but you have to look back to 1997 to find a calendar year with a gain that big.

Equally significant, tamer energy prices mean that the “real” wage gains, after inflation, are above 3 percent for the past 12 months. That, too, hasn’t happened since the 1990s, even though the economy has been expanding over the past five years………..

http://www.csmonitor.com/2006/1120/p01s03-usec.html

[kewp]

bsrsharma,

Wages are still lagging (real) inflation by a significant amount. And RE inflation by an even more significant amount.

Compounding that is the very real issue that while folks can live without a mortgage, they can’t live without paying for food and energy. The former is going to suffer due to inflation of the latter.

[patientlywaiting]

I agree this is a good loan compared to what is available in todays market. Just like some affordable-income programs are good in today’s market.

But considering how much house prices will drop, those financing schemes don’t mean much. Buy a house at a price you can afford not because of financing schemes.

Ex-SD is right; prices will continue to drop for a long time. You’re much better off buying at the low.

[patientlywaiting]

kewp makes an excellent point. I don’t see how American wages can continue rise to support higher housing prices. If anything, nominally higher wages will go to food, gas, clothing, education, health care, and other necessities.

Sure, the skilled workers will see wage inflation but given the pace of globalization, the average American worker will have to compete with skilled workers from around the world. Even routine radiology readings are outsourced to India and Singapore.

[(former)FormerSanDiegan]

Wages are still lagging (real) inflation by a significant amount. And RE inflation by an even more significant amount.

Real Estate Inflation ? That notion is so 2005.

Let’s look at more recent times:

In the past year home prices have dropped by 5% (per Case-Shiller) and incomes have risen by 4% (per brsharma’s post above)

Wage-to-price ratio for homes just corrected 9% nationwide the past 12 months.

[Ex-SD]

“What leads one to conclude that a declining dollar and rampant inflation would put downward pressure on real estate prices. I do not understand the logic of those who hold this view. Is there some sort of mass cognitive dissonance going on ?”

#1. There is too much inventory of unsold/foreclosed homes and it’s going to get a lot larger due to more ARM resets, divorces, job losses, etc. It’s going to take seven or eight years (at a minimum) to get unsold inventory numbers back in line.
#2. Housing in the bubble markets is severely overvalued when compared to the majority of homes in the rest of the country.
#3. Wages for the number of people that it would take to buy a home will not rise nearly enough in 10 years to afford anything more than a $300k median price. That $475k house that he just bought can be bought where I live in SC (in a major city) for around $175k. That’s how much houses are over-inflated in most of CA.

[23109VC]

Ex-SD

the house that is 475k here is 175 there.

what is the discrepancy in salaries/incomes.

the guy who makes $100k here – what does he make there? $50? I’m assuming a local job, not someone self employed over the internet who makes the same regardless of where they live…. your average person has to work somehwere, and in general, incomes seem to vary with regions – cost of living varies.. etc.

housing in CA may be way overpriced, but part of why it costs more is that jobs here sometimes tend to pay better than say a job in Arkansas….where that 475k house cost 100k..

[kewp]

what is the discrepancy in salaries/incomes.

Courtesy of:

http://www.census.gov/hhes/www/income/medincsizeandstate.html

Arkansas Estimate Margin of Error
Total: 45,093 +/-813
2-person families 40,604 +/-821
3-person families 47,588 +/-1,487
4-person families 52,185 +/-1,486
5-person families 50,500 +/-1,924
6-person families 51,971 +/-6,247
7-or-more-person families 49,272 +/-4,514

California Estimate Margin of Error
Total: 64,563 +/-413
2-person families 60,032 +/-524
3-person families 64,766 +/-854
4-person families 74,801 +/-868
5-person families 64,132 +/-1,356
6-person families 61,348 +/-1,096
7-or-more-person families 68,030 +/-2,050

By your logic, all things being equal, CA homes should be 30% more than AK homes.

Apparently this is not the case.

[Ex-SD]

kewp: You beat me to it:

South Carolina……….Estimate…Margin of Error
Total: 50,334 +/-657
2-person families……45,233 +/-752
3-person families…….51,525 +/-1,739
4-person families…….59,663 +/-1,819
5-person families…….55,134 +/-2,696
6-person families…….60,783 +/-6,321
7-or-more-people…….47,140 +/-4,554

As you can see, things are way out of wack in SD and the rest of CA.
What’s selling for $475k in SD should be priced at around $215-$220k in SD.

[Ex-SD]

kewp: You beat me to it:

South Carolina……….Estimate…Margin of Error
Total: 50,334 +/-657
2-person families……45,233 +/-752
3-person families…….51,525 +/-1,739
4-person families…….59,663 +/-1,819
5-person families…….55,134 +/-2,696
6-person families…….60,783 +/-6,321
7-or-more-people…….47,140 +/-4,554

As you can see, things are way out of wack in SD and the rest of CA.
What’s selling for $475k in SD should be priced at around $215-$220k in SD.

[Ex-SD]

kewp: You beat me to it:

South Carolina……….Estimate…Margin of Error
Total: 50,334 +/-657
2-person families……45,233 +/-752
3-person families…….51,525 +/-1,739
4-person families…….59,663 +/-1,819
5-person families…….55,134 +/-2,696
6-person families…….60,783 +/-6,321
7-or-more-people…….47,140 +/-4,554

As you can see, things are way out of wack in SD and the rest of CA.
What’s selling for $475k in SD should be priced at around $215-$220k in SD.

[kewp]

what is the discrepancy in salaries/incomes.

Courtesy of:

http://www.census.gov/hhes/www/income/medincsizeandstate.html

Arkansas Estimate Margin of Error
Total: 45,093 +/-813
2-person families 40,604 +/-821
3-person families 47,588 +/-1,487
4-person families 52,185 +/-1,486
5-person families 50,500 +/-1,924
6-person families 51,971 +/-6,247
7-or-more-person families 49,272 +/-4,514

California Estimate Margin of Error
Total: 64,563 +/-413
2-person families 60,032 +/-524
3-person families 64,766 +/-854
4-person families 74,801 +/-868
5-person families 64,132 +/-1,356
6-person families 61,348 +/-1,096
7-or-more-person families 68,030 +/-2,050

By your logic, all things being equal, CA homes should be 30% more than AK homes.

Apparently this is not the case.

[kewp]

what is the discrepancy in salaries/incomes.

Courtesy of:

http://www.census.gov/hhes/www/income/medincsizeandstate.html

Arkansas Estimate Margin of Error
Total: 45,093 +/-813
2-person families 40,604 +/-821
3-person families 47,588 +/-1,487
4-person families 52,185 +/-1,486
5-person families 50,500 +/-1,924
6-person families 51,971 +/-6,247
7-or-more-person families 49,272 +/-4,514

California Estimate Margin of Error
Total: 64,563 +/-413
2-person families 60,032 +/-524
3-person families 64,766 +/-854
4-person families 74,801 +/-868
5-person families 64,132 +/-1,356
6-person families 61,348 +/-1,096
7-or-more-person families 68,030 +/-2,050

By your logic, all things being equal, CA homes should be 30% more than AK homes.

Apparently this is not the case.

[23109VC]

Ex-SD

the house that is 475k here is 175 there.

what is the discrepancy in salaries/incomes.

the guy who makes $100k here – what does he make there? $50? I’m assuming a local job, not someone self employed over the internet who makes the same regardless of where they live…. your average person has to work somehwere, and in general, incomes seem to vary with regions – cost of living varies.. etc.

housing in CA may be way overpriced, but part of why it costs more is that jobs here sometimes tend to pay better than say a job in Arkansas….where that 475k house cost 100k..

[23109VC]

Ex-SD

the house that is 475k here is 175 there.

what is the discrepancy in salaries/incomes.

the guy who makes $100k here – what does he make there? $50? I’m assuming a local job, not someone self employed over the internet who makes the same regardless of where they live…. your average person has to work somehwere, and in general, incomes seem to vary with regions – cost of living varies.. etc.

housing in CA may be way overpriced, but part of why it costs more is that jobs here sometimes tend to pay better than say a job in Arkansas….where that 475k house cost 100k..

[garysears]

I think this is an incredible loan. I wouldn’t mind taking advantage of such an ill conceived program designed to get unqualified people into the peak of the mania.

Why overpay now to do it?

It will be a double bonus later on to buy a house at a reasonable price plus get better than market financing. No one should feel pressured to buy immediately due to any such program. Price matters more than financing terms or monthly payment.

Anyone really think these programs are going anywhere soon? My guess is more government intervention and not less as this plays out.

It doesn’t seem likely wages will dramatically inflate to stabilize prices. Isn’t it normal for wage inflation to lag real inflation? The claim that a 4% wage increase is outpacing inflation would be hotly contested by many.

My personal real estate bet is I can pick a more reasonable entry point into the market before wages show any substantial increase.

Don’t forget about financing in the face of obvious inflation. Even if incomes rise somewhat, financing is only likely to get more difficult. The net result will still be declining property values. I don’t see how devaluation of the dollar even matters. It is basic supply and demand.

Wage inflation is swimming upstream against both the financing and distressed inventory trends.

Stay patient.

[garysears]

I think this is an incredible loan. I wouldn’t mind taking advantage of such an ill conceived program designed to get unqualified people into the peak of the mania.

Why overpay now to do it?

It will be a double bonus later on to buy a house at a reasonable price plus get better than market financing. No one should feel pressured to buy immediately due to any such program. Price matters more than financing terms or monthly payment.

Anyone really think these programs are going anywhere soon? My guess is more government intervention and not less as this plays out.

It doesn’t seem likely wages will dramatically inflate to stabilize prices. Isn’t it normal for wage inflation to lag real inflation? The claim that a 4% wage increase is outpacing inflation would be hotly contested by many.

My personal real estate bet is I can pick a more reasonable entry point into the market before wages show any substantial increase.

Don’t forget about financing in the face of obvious inflation. Even if incomes rise somewhat, financing is only likely to get more difficult. The net result will still be declining property values. I don’t see how devaluation of the dollar even matters. It is basic supply and demand.

Wage inflation is swimming upstream against both the financing and distressed inventory trends.

Stay patient.

[garysears]

I think this is an incredible loan. I wouldn’t mind taking advantage of such an ill conceived program designed to get unqualified people into the peak of the mania.

Why overpay now to do it?

It will be a double bonus later on to buy a house at a reasonable price plus get better than market financing. No one should feel pressured to buy immediately due to any such program. Price matters more than financing terms or monthly payment.

Anyone really think these programs are going anywhere soon? My guess is more government intervention and not less as this plays out.

It doesn’t seem likely wages will dramatically inflate to stabilize prices. Isn’t it normal for wage inflation to lag real inflation? The claim that a 4% wage increase is outpacing inflation would be hotly contested by many.

My personal real estate bet is I can pick a more reasonable entry point into the market before wages show any substantial increase.

Don’t forget about financing in the face of obvious inflation. Even if incomes rise somewhat, financing is only likely to get more difficult. The net result will still be declining property values. I don’t see how devaluation of the dollar even matters. It is basic supply and demand.

Wage inflation is swimming upstream against both the financing and distressed inventory trends.

Stay patient.

[(former)FormerSanDiegan]

Ex-SD –

Your points are well-taken. I agree that home prices are still significantly overvalued (probably by 35% or so in San Diego). I’m just saying that if one believes that dollar devaluation and inflation are on the uptake, then a significant chunk of the housing price correction going forward could be eaten by inflation. It will be a factor.

A lot can happen in 10 years to the value of a dollar due to inflation.

Lets take a stroll through a brief history of home prices in this country during inflationary times:

1970 : Price of a new home = 26,600 *
Median household income = 8734
inflaiton at 6.5%

1975 : Price of a new home = 42,600
Median household income = 11,800
inflation = 14.1%

1980 : Price of a new home = 76,400
median household income = 17,710
inflaiton = 13.5 %

SO, there you have it. During a period that included significant chunks of double-digit annual inflation home prices tripled and income more than doubled.

1990 : Price of a new home = 149,800
Median Household Income = 29,943
inflation = 5.4%

1999: Price of a new home = 195,800
Median household income = 39,973
inflation = 2.1%

Higher inflation does not equal downward pressure on home prices.

* Source : http://www.1970sflashback.com/1970/Economy.asp

[(former)FormerSanDiegan]

Ex-SD –

Your points are well-taken. I agree that home prices are still significantly overvalued (probably by 35% or so in San Diego). I’m just saying that if one believes that dollar devaluation and inflation are on the uptake, then a significant chunk of the housing price correction going forward could be eaten by inflation. It will be a factor.

A lot can happen in 10 years to the value of a dollar due to inflation.

Lets take a stroll through a brief history of home prices in this country during inflationary times:

1970 : Price of a new home = 26,600 *
Median household income = 8734
inflaiton at 6.5%

1975 : Price of a new home = 42,600
Median household income = 11,800
inflation = 14.1%

1980 : Price of a new home = 76,400
median household income = 17,710
inflaiton = 13.5 %

SO, there you have it. During a period that included significant chunks of double-digit annual inflation home prices tripled and income more than doubled.

1990 : Price of a new home = 149,800
Median Household Income = 29,943
inflation = 5.4%

1999: Price of a new home = 195,800
Median household income = 39,973
inflation = 2.1%

Higher inflation does not equal downward pressure on home prices.

* Source : http://www.1970sflashback.com/1970/Economy.asp

[(former)FormerSanDiegan]

Ex-SD –

Your points are well-taken. I agree that home prices are still significantly overvalued (probably by 35% or so in San Diego). I’m just saying that if one believes that dollar devaluation and inflation are on the uptake, then a significant chunk of the housing price correction going forward could be eaten by inflation. It will be a factor.

A lot can happen in 10 years to the value of a dollar due to inflation.

Lets take a stroll through a brief history of home prices in this country during inflationary times:

1970 : Price of a new home = 26,600 *
Median household income = 8734
inflaiton at 6.5%

1975 : Price of a new home = 42,600
Median household income = 11,800
inflation = 14.1%

1980 : Price of a new home = 76,400
median household income = 17,710
inflaiton = 13.5 %

SO, there you have it. During a period that included significant chunks of double-digit annual inflation home prices tripled and income more than doubled.

1990 : Price of a new home = 149,800
Median Household Income = 29,943
inflation = 5.4%

1999: Price of a new home = 195,800
Median household income = 39,973
inflation = 2.1%

Higher inflation does not equal downward pressure on home prices.

* Source : http://www.1970sflashback.com/1970/Economy.asp

[(former)FormerSanDiegan]

Ex-SD –

Your points are well-taken. I agree that home prices are still significantly overvalued (probably by 35% or so in San Diego). I’m just saying that if one believes that dollar devaluation and inflation are on the uptake, then a significant chunk of the housing price correction going forward could be eaten by inflation. It will be a factor.

A lot can happen in 10 years to the value of a dollar due to inflation.

Lets take a stroll through a brief history of home prices in this country during inflationary times:

1970 : Price of a new home = 26,600 *
Median household income = 8734
inflaiton at 6.5%

1975 : Price of a new home = 42,600
Median household income = 11,800
inflation = 14.1%

1980 : Price of a new home = 76,400
median household income = 17,710
inflaiton = 13.5 %

SO, there you have it. During a period that included significant chunks of double-digit annual inflation home prices tripled and income more than doubled.

1990 : Price of a new home = 149,800
Median Household Income = 29,943
inflation = 5.4%

1999: Price of a new home = 195,800
Median household income = 39,973
inflation = 2.1%

Higher inflation does not equal downward pressure on home prices.

* Source : http://www.1970sflashback.com/1970/Economy.asp

[Ex-SD]

“What leads one to conclude that a declining dollar and rampant inflation would put downward pressure on real estate prices. I do not understand the logic of those who hold this view. Is there some sort of mass cognitive dissonance going on ?”

#1. There is too much inventory of unsold/foreclosed homes and it’s going to get a lot larger due to more ARM resets, divorces, job losses, etc. It’s going to take seven or eight years (at a minimum) to get unsold inventory numbers back in line.
#2. Housing in the bubble markets is severely overvalued when compared to the majority of homes in the rest of the country.
#3. Wages for the number of people that it would take to buy a home will not rise nearly enough in 10 years to afford anything more than a $300k median price. That $475k house that he just bought can be bought where I live in SC (in a major city) for around $175k. That’s how much houses are over-inflated in most of CA.

[Ex-SD]

“What leads one to conclude that a declining dollar and rampant inflation would put downward pressure on real estate prices. I do not understand the logic of those who hold this view. Is there some sort of mass cognitive dissonance going on ?”

#1. There is too much inventory of unsold/foreclosed homes and it’s going to get a lot larger due to more ARM resets, divorces, job losses, etc. It’s going to take seven or eight years (at a minimum) to get unsold inventory numbers back in line.
#2. Housing in the bubble markets is severely overvalued when compared to the majority of homes in the rest of the country.
#3. Wages for the number of people that it would take to buy a home will not rise nearly enough in 10 years to afford anything more than a $300k median price. That $475k house that he just bought can be bought where I live in SC (in a major city) for around $175k. That’s how much houses are over-inflated in most of CA.

[(former)FormerSanDiegan]

Wages are still lagging (real) inflation by a significant amount. And RE inflation by an even more significant amount.

Real Estate Inflation ? That notion is so 2005.

Let’s look at more recent times:

In the past year home prices have dropped by 5% (per Case-Shiller) and incomes have risen by 4% (per brsharma’s post above)

Wage-to-price ratio for homes just corrected 9% nationwide the past 12 months.

[(former)FormerSanDiegan]

Wages are still lagging (real) inflation by a significant amount. And RE inflation by an even more significant amount.

Real Estate Inflation ? That notion is so 2005.

Let’s look at more recent times:

In the past year home prices have dropped by 5% (per Case-Shiller) and incomes have risen by 4% (per brsharma’s post above)

Wage-to-price ratio for homes just corrected 9% nationwide the past 12 months.

[patientlywaiting]

kewp makes an excellent point. I don’t see how American wages can continue rise to support higher housing prices. If anything, nominally higher wages will go to food, gas, clothing, education, health care, and other necessities.

Sure, the skilled workers will see wage inflation but given the pace of globalization, the average American worker will have to compete with skilled workers from around the world. Even routine radiology readings are outsourced to India and Singapore.

[patientlywaiting]

kewp makes an excellent point. I don’t see how American wages can continue rise to support higher housing prices. If anything, nominally higher wages will go to food, gas, clothing, education, health care, and other necessities.

Sure, the skilled workers will see wage inflation but given the pace of globalization, the average American worker will have to compete with skilled workers from around the world. Even routine radiology readings are outsourced to India and Singapore.

[Raybyrnes]

patientlywaiting
“But considering how much house prices will drop, those financing schemes don’t mean much. Buy a house at a price you can afford not because of financing schemes.”

I will totally support this statement. I don’t think anyone should use any other financial instrament unless they can afford the 30 year fixed. Once the 30 year fixed is management the ability to use IO, neg am, ARMS etc become vialbale options becasue you can already mangement the payments. At this point it is just a matter of whether or not you can get a better rate of return investing the differnce.

Best scenario is to identify something you can afford and then use the affordable-income programs.

But be aware that if you do well, get married etc you can quickly exceed the income limits and all of a sudden you are trapped in the middle. It happend to me so I speak from experience.

[kev374]

a 40 yr loan doesn’t make any sense. The difference in payments between a 30yr and a 40yr isn’t all that much but an additional 10 years is a loonnnnnng time to continue making those payments. And do you want to keep paying a mortgage into retirement? Geez!

[the dingo]

Thanks for all the interesting feedback, constructive and vindictive. As we all know, no one loan is good for everybody. Yes, our payments are 2450, and with insurance, that is $3000 per month. We are right at the 90k limit, which still gives us heaps to live on, as we have zero debt.
Rentals in my neighborhood, La Costa are at 2100-2400 for the same model, so minus the tax, my loan is the same I would pay for rent.
The reason I liked the loan was that it gives me the security of the locked in rate, but I could easily refi at anytime once the market gets back to a more normal place. And to the comment, you can’t afford that loan. It is not the price, but the terms. 10 years is a long time away. This is not a three year ARM. Everyone is all negative to the interest only loans now, but they are still a great tool if used wisely. P.S. And where else can you get the whole loan on one mortgage without an outrageous 2nd in the 8%+ range

[the dingo]

According to the classes I attended, this loan was put in place by the fed in the 70’s so that banks could not do a practice called “redlining” see http://en.wikipedia.org/wiki/Redlining which in a nutshell means offering low income areas credit for high interest cards, but not credit for things like home loans and cars. Acorn was set up as a social justice organization, and when I went to the classes, I felt like I was at the democratic national convention. Pictures of Ceasar Chavez and others..
When BofA did their presentation at the class, they said that they get credits for doing these loans, and that they would not do them if the Govt. did not limit their growth ability without a certain amount of credits they get from financing a certain number of these. Thus, it is the “lost loser” car dealership pricipal where they lose money, so they can make money.
The loophole has come from the fact that immigrant workers live all over San Diego. Thus, since my area, Encinitas/ Carlsbad if full of low income workers, we qualify as an area for this loan. Since they can’t discriminate because I am white, I have gotten a loan previously unavailable.
You might ask, why would poor people need a loan of 500k? Basically, that is another loophole. The max income ratio of 90k and loan amounts of 500k are based on mathmatical equations that take in the areas medium home value and income level.
One more thing, 50% of the class was caucasian and there were at least 100 people in the class. This showed me that lots of people even back in July wanted in the market. I did not make the system, I only used it.

[the dingo]

According to the classes I attended, this loan was put in place by the fed in the 70’s so that banks could not do a practice called “redlining” see http://en.wikipedia.org/wiki/Redlining which in a nutshell means offering low income areas credit for high interest cards, but not credit for things like home loans and cars. Acorn was set up as a social justice organization, and when I went to the classes, I felt like I was at the democratic national convention. Pictures of Ceasar Chavez and others..
When BofA did their presentation at the class, they said that they get credits for doing these loans, and that they would not do them if the Govt. did not limit their growth ability without a certain amount of credits they get from financing a certain number of these. Thus, it is the “lost loser” car dealership pricipal where they lose money, so they can make money.
The loophole has come from the fact that immigrant workers live all over San Diego. Thus, since my area, Encinitas/ Carlsbad if full of low income workers, we qualify as an area for this loan. Since they can’t discriminate because I am white, I have gotten a loan previously unavailable.
You might ask, why would poor people need a loan of 500k? Basically, that is another loophole. The max income ratio of 90k and loan amounts of 500k are based on mathmatical equations that take in the areas medium home value and income level.
One more thing, 50% of the class was caucasian and there were at least 100 people in the class. This showed me that lots of people even back in July wanted in the market. I did not make the system, I only used it.

[the dingo]

According to the classes I attended, this loan was put in place by the fed in the 70’s so that banks could not do a practice called “redlining” see http://en.wikipedia.org/wiki/Redlining which in a nutshell means offering low income areas credit for high interest cards, but not credit for things like home loans and cars. Acorn was set up as a social justice organization, and when I went to the classes, I felt like I was at the democratic national convention. Pictures of Ceasar Chavez and others..
When BofA did their presentation at the class, they said that they get credits for doing these loans, and that they would not do them if the Govt. did not limit their growth ability without a certain amount of credits they get from financing a certain number of these. Thus, it is the “lost loser” car dealership pricipal where they lose money, so they can make money.
The loophole has come from the fact that immigrant workers live all over San Diego. Thus, since my area, Encinitas/ Carlsbad if full of low income workers, we qualify as an area for this loan. Since they can’t discriminate because I am white, I have gotten a loan previously unavailable.
You might ask, why would poor people need a loan of 500k? Basically, that is another loophole. The max income ratio of 90k and loan amounts of 500k are based on mathmatical equations that take in the areas medium home value and income level.
One more thing, 50% of the class was caucasian and there were at least 100 people in the class. This showed me that lots of people even back in July wanted in the market. I did not make the system, I only used it.

[the dingo]

Thanks for all the interesting feedback, constructive and vindictive. As we all know, no one loan is good for everybody. Yes, our payments are 2450, and with insurance, that is $3000 per month. We are right at the 90k limit, which still gives us heaps to live on, as we have zero debt.
Rentals in my neighborhood, La Costa are at 2100-2400 for the same model, so minus the tax, my loan is the same I would pay for rent.
The reason I liked the loan was that it gives me the security of the locked in rate, but I could easily refi at anytime once the market gets back to a more normal place. And to the comment, you can’t afford that loan. It is not the price, but the terms. 10 years is a long time away. This is not a three year ARM. Everyone is all negative to the interest only loans now, but they are still a great tool if used wisely. P.S. And where else can you get the whole loan on one mortgage without an outrageous 2nd in the 8%+ range

[the dingo]

Thanks for all the interesting feedback, constructive and vindictive. As we all know, no one loan is good for everybody. Yes, our payments are 2450, and with insurance, that is $3000 per month. We are right at the 90k limit, which still gives us heaps to live on, as we have zero debt.
Rentals in my neighborhood, La Costa are at 2100-2400 for the same model, so minus the tax, my loan is the same I would pay for rent.
The reason I liked the loan was that it gives me the security of the locked in rate, but I could easily refi at anytime once the market gets back to a more normal place. And to the comment, you can’t afford that loan. It is not the price, but the terms. 10 years is a long time away. This is not a three year ARM. Everyone is all negative to the interest only loans now, but they are still a great tool if used wisely. P.S. And where else can you get the whole loan on one mortgage without an outrageous 2nd in the 8%+ range

[Raybyrnes]

kev374
10 year is a loooooooooooong time. Long time to wait to get started saving in a Roth IRA aswell. Run the numbers on starting a Roth IRA at the age of 25 vs waiting until you are 35. A little bit now goes a long way later. Think you are sort of missing this. Additionally time value of money say that a payment in 40 year will be equivalent to a car payment today. Money has a declining value. Just giving you the facts. You can play aroudn wiht the calculations.

[Raybyrnes]

kev374
10 year is a loooooooooooong time. Long time to wait to get started saving in a Roth IRA aswell. Run the numbers on starting a Roth IRA at the age of 25 vs waiting until you are 35. A little bit now goes a long way later. Think you are sort of missing this. Additionally time value of money say that a payment in 40 year will be equivalent to a car payment today. Money has a declining value. Just giving you the facts. You can play aroudn wiht the calculations.

[Raybyrnes]

kev374
10 year is a loooooooooooong time. Long time to wait to get started saving in a Roth IRA aswell. Run the numbers on starting a Roth IRA at the age of 25 vs waiting until you are 35. A little bit now goes a long way later. Think you are sort of missing this. Additionally time value of money say that a payment in 40 year will be equivalent to a car payment today. Money has a declining value. Just giving you the facts. You can play aroudn wiht the calculations.

[kev374]

a 40 yr loan doesn’t make any sense. The difference in payments between a 30yr and a 40yr isn’t all that much but an additional 10 years is a loonnnnnng time to continue making those payments. And do you want to keep paying a mortgage into retirement? Geez!

[kev374]

a 40 yr loan doesn’t make any sense. The difference in payments between a 30yr and a 40yr isn’t all that much but an additional 10 years is a loonnnnnng time to continue making those payments. And do you want to keep paying a mortgage into retirement? Geez!

[Raybyrnes]

patientlywaiting
“But considering how much house prices will drop, those financing schemes don’t mean much. Buy a house at a price you can afford not because of financing schemes.”

I will totally support this statement. I don’t think anyone should use any other financial instrament unless they can afford the 30 year fixed. Once the 30 year fixed is management the ability to use IO, neg am, ARMS etc become vialbale options becasue you can already mangement the payments. At this point it is just a matter of whether or not you can get a better rate of return investing the differnce.

Best scenario is to identify something you can afford and then use the affordable-income programs.

But be aware that if you do well, get married etc you can quickly exceed the income limits and all of a sudden you are trapped in the middle. It happend to me so I speak from experience.

[Raybyrnes]

patientlywaiting
“But considering how much house prices will drop, those financing schemes don’t mean much. Buy a house at a price you can afford not because of financing schemes.”

I will totally support this statement. I don’t think anyone should use any other financial instrament unless they can afford the 30 year fixed. Once the 30 year fixed is management the ability to use IO, neg am, ARMS etc become vialbale options becasue you can already mangement the payments. At this point it is just a matter of whether or not you can get a better rate of return investing the differnce.

Best scenario is to identify something you can afford and then use the affordable-income programs.

But be aware that if you do well, get married etc you can quickly exceed the income limits and all of a sudden you are trapped in the middle. It happend to me so I speak from experience.

[patientlywaiting]

I agree this is a good loan compared to what is available in todays market. Just like some affordable-income programs are good in today’s market.

But considering how much house prices will drop, those financing schemes don’t mean much. Buy a house at a price you can afford not because of financing schemes.

Ex-SD is right; prices will continue to drop for a long time. You’re much better off buying at the low.

[patientlywaiting]

I agree this is a good loan compared to what is available in todays market. Just like some affordable-income programs are good in today’s market.

But considering how much house prices will drop, those financing schemes don’t mean much. Buy a house at a price you can afford not because of financing schemes.

Ex-SD is right; prices will continue to drop for a long time. You’re much better off buying at the low.

[kewp]

bsrsharma,

Wages are still lagging (real) inflation by a significant amount. And RE inflation by an even more significant amount.

Compounding that is the very real issue that while folks can live without a mortgage, they can’t live without paying for food and energy. The former is going to suffer due to inflation of the latter.

[kewp]

bsrsharma,

Wages are still lagging (real) inflation by a significant amount. And RE inflation by an even more significant amount.

Compounding that is the very real issue that while folks can live without a mortgage, they can’t live without paying for food and energy. The former is going to suffer due to inflation of the latter.

[what_a_disasta]

Tamer energy prices? Hardly.

[what_a_disasta]

Tamer energy prices? Hardly.

[what_a_disasta]

Tamer energy prices? Hardly.

[bsrsharma]

A brisk rise in American wages
Pay rose faster than the cost of living for the first time in years.

American paychecks are rising again at a pace not seen since the 1990s.
The pay increase amounts to 4 percent on average over the past 12 months, and it comes at a very helpful time for millions of households.

For three years, pay increases haven’t kept pace with the rising cost of living. Then came this year’s housing slowdown, which has further squeezed family finances.

Those setbacks, however, are now being offset by rising income. Four percent may not sound like much, but you have to look back to 1997 to find a calendar year with a gain that big.

Equally significant, tamer energy prices mean that the “real” wage gains, after inflation, are above 3 percent for the past 12 months. That, too, hasn’t happened since the 1990s, even though the economy has been expanding over the past five years………..

http://www.csmonitor.com/2006/1120/p01s03-usec.html

[bsrsharma]

A brisk rise in American wages
Pay rose faster than the cost of living for the first time in years.

American paychecks are rising again at a pace not seen since the 1990s.
The pay increase amounts to 4 percent on average over the past 12 months, and it comes at a very helpful time for millions of households.

For three years, pay increases haven’t kept pace with the rising cost of living. Then came this year’s housing slowdown, which has further squeezed family finances.

Those setbacks, however, are now being offset by rising income. Four percent may not sound like much, but you have to look back to 1997 to find a calendar year with a gain that big.

Equally significant, tamer energy prices mean that the “real” wage gains, after inflation, are above 3 percent for the past 12 months. That, too, hasn’t happened since the 1990s, even though the economy has been expanding over the past five years………..

http://www.csmonitor.com/2006/1120/p01s03-usec.html

[Ex-SD]

I think that the $475k house that he bought will be worth no more than $300k in 10 years so when the interest only portion is up, he will start paying for P&I for 30 years for an overpriced property. The bottom for housing prices in SoCal won’t hit until at least the end of 2011 but most likely 2012 or later. When the bottom hits, prices will not go up for years because the average incomes for buyers in SD don’t equal what it takes to get a loan. Prices will only be able to rise according to income rising along with inventory & demand. After this fiasco, banks will not be handing out loans like candy to trick or treaters and buyers will not be so eager to buy a home that they can’t use as a get rich quick scheme or an ATM.
If he’s happy with the loan, more power to him but it’s not something I would advise any of my children to do.

[(former)FormerSanDiegan]

Historically, in high inflation environments the price of hard assets goes up. Real estate is a hard asset. So is gold.

If the current dollar decline results in increased inflation, I would expect that the remaining 30-40% or so price decline in San Diego could consist of half due to inflaiton and half due to nominal price declines.

What leads one to conclude that a declining dollar and rampant inflation would put downward pressure on real estate prices. I do not understand the logic of those who hold this view. Is there some sort of mass cognitive dissonance going on ?

[(former)FormerSanDiegan]

Historically, in high inflation environments the price of hard assets goes up. Real estate is a hard asset. So is gold.

If the current dollar decline results in increased inflation, I would expect that the remaining 30-40% or so price decline in San Diego could consist of half due to inflaiton and half due to nominal price declines.

What leads one to conclude that a declining dollar and rampant inflation would put downward pressure on real estate prices. I do not understand the logic of those who hold this view. Is there some sort of mass cognitive dissonance going on ?

[(former)FormerSanDiegan]

Historically, in high inflation environments the price of hard assets goes up. Real estate is a hard asset. So is gold.

If the current dollar decline results in increased inflation, I would expect that the remaining 30-40% or so price decline in San Diego could consist of half due to inflaiton and half due to nominal price declines.

What leads one to conclude that a declining dollar and rampant inflation would put downward pressure on real estate prices. I do not understand the logic of those who hold this view. Is there some sort of mass cognitive dissonance going on ?

[Ex-SD]

I think that the $475k house that he bought will be worth no more than $300k in 10 years so when the interest only portion is up, he will start paying for P&I for 30 years for an overpriced property. The bottom for housing prices in SoCal won’t hit until at least the end of 2011 but most likely 2012 or later. When the bottom hits, prices will not go up for years because the average incomes for buyers in SD don’t equal what it takes to get a loan. Prices will only be able to rise according to income rising along with inventory & demand. After this fiasco, banks will not be handing out loans like candy to trick or treaters and buyers will not be so eager to buy a home that they can’t use as a get rich quick scheme or an ATM.
If he’s happy with the loan, more power to him but it’s not something I would advise any of my children to do.

[Ex-SD]

I think that the $475k house that he bought will be worth no more than $300k in 10 years so when the interest only portion is up, he will start paying for P&I for 30 years for an overpriced property. The bottom for housing prices in SoCal won’t hit until at least the end of 2011 but most likely 2012 or later. When the bottom hits, prices will not go up for years because the average incomes for buyers in SD don’t equal what it takes to get a loan. Prices will only be able to rise according to income rising along with inventory & demand. After this fiasco, banks will not be handing out loans like candy to trick or treaters and buyers will not be so eager to buy a home that they can’t use as a get rich quick scheme or an ATM.
If he’s happy with the loan, more power to him but it’s not something I would advise any of my children to do.

[kewp]

bsrsharma,

Wages are not inflating.

Wages are flat.

[kewp]

bsrsharma,

Wages are not inflating.

Wages are flat.

[Raybyrnes]

bsrsharma

You arr right on the money. That is a great loan. IN 10 years you coul likely see a combination of higher rates and higher home prices. Having locked in at 6% the paper becomes cheap. Additionally accounting for inflation his 3000K payment in 40 years is equivalent to a $1500 payment or less in todays terms.

There is also nothing that stops him from prepaying the loan back or refinancing if we got into soem wierd situation where rates went to some ridiculous 4% range. The big thing here is making sure you have the cash to continue to make the payment.

Nice thing with this home loan is that in the enevt of job loss I believe there is deferrment and forbearanc ein the form of PMI that will cover the mortgage so even his payment is insured. It is a good loan.

[Raybyrnes]

bsrsharma

You arr right on the money. That is a great loan. IN 10 years you coul likely see a combination of higher rates and higher home prices. Having locked in at 6% the paper becomes cheap. Additionally accounting for inflation his 3000K payment in 40 years is equivalent to a $1500 payment or less in todays terms.

There is also nothing that stops him from prepaying the loan back or refinancing if we got into soem wierd situation where rates went to some ridiculous 4% range. The big thing here is making sure you have the cash to continue to make the payment.

Nice thing with this home loan is that in the enevt of job loss I believe there is deferrment and forbearanc ein the form of PMI that will cover the mortgage so even his payment is insured. It is a good loan.

[Raybyrnes]

bsrsharma

You arr right on the money. That is a great loan. IN 10 years you coul likely see a combination of higher rates and higher home prices. Having locked in at 6% the paper becomes cheap. Additionally accounting for inflation his 3000K payment in 40 years is equivalent to a $1500 payment or less in todays terms.

There is also nothing that stops him from prepaying the loan back or refinancing if we got into soem wierd situation where rates went to some ridiculous 4% range. The big thing here is making sure you have the cash to continue to make the payment.

Nice thing with this home loan is that in the enevt of job loss I believe there is deferrment and forbearanc ein the form of PMI that will cover the mortgage so even his payment is insured. It is a good loan.

[bsrsharma]

djrobsd – we are being so blinded by the flash of the bubble burst that sometimes we forget that macroeconomic dynamics are propelling us to high inflation regime. That means, his 475K loan today is already worth half of that in 10 years when he has to repay with cheap $. When $ declines, real estate prices go up due to the natural forces of inflation. That 475K will be barely sufficient to by a small condo in 10 years – think $8 gas, $15 minimum wage, $2000 rent for a one bedroom apartment, $2000 per Oz Gold, $300 Bbl oil – you get the picture. He will be paying $3000 per month on a monthly salary of of $20K! When everything else doubles, his repayments will look puny.

[bsrsharma]

djrobsd – we are being so blinded by the flash of the bubble burst that sometimes we forget that macroeconomic dynamics are propelling us to high inflation regime. That means, his 475K loan today is already worth half of that in 10 years when he has to repay with cheap $. When $ declines, real estate prices go up due to the natural forces of inflation. That 475K will be barely sufficient to by a small condo in 10 years – think $8 gas, $15 minimum wage, $2000 rent for a one bedroom apartment, $2000 per Oz Gold, $300 Bbl oil – you get the picture. He will be paying $3000 per month on a monthly salary of of $20K! When everything else doubles, his repayments will look puny.

[djrobsd]

Where’s your logic there, bsrsharma? I’m assuming you talk about the decline of the dollar? Well, when the dollar declines, you don’t think real estate values will stay up do you?! Quite the contrary, they will sink into a big hole, so 1/8th the value of the dollar in 30 years, will probably also mean the property will only be worth 1/8 its original value…

lol

I still see a big flaw in this Acorn program. They are giving you an interest only loan because you can’t afford to pay principal + interest. But, in 10 years, the loan re-casts itself, and you have to begin paying principal. I guess ACORN assumes your income will increase in 10 years and you’ll be able to afford the higher payments?

Looks like the same flawed logic as an ARM to me, only the rate is fixed, but the payment certainly isn’t.

Can a mortgage broker shed some light on how much the payment goes up after the interest only period is done?

[djrobsd]

Where’s your logic there, bsrsharma? I’m assuming you talk about the decline of the dollar? Well, when the dollar declines, you don’t think real estate values will stay up do you?! Quite the contrary, they will sink into a big hole, so 1/8th the value of the dollar in 30 years, will probably also mean the property will only be worth 1/8 its original value…

lol

I still see a big flaw in this Acorn program. They are giving you an interest only loan because you can’t afford to pay principal + interest. But, in 10 years, the loan re-casts itself, and you have to begin paying principal. I guess ACORN assumes your income will increase in 10 years and you’ll be able to afford the higher payments?

Looks like the same flawed logic as an ARM to me, only the rate is fixed, but the payment certainly isn’t.

Can a mortgage broker shed some light on how much the payment goes up after the interest only period is done?

[bsrsharma]

I think you got a very good loan. 6.1% APR FIXED for a 40 year loan, 100% LTV, no PMI is just insanely great. What are your payments like?

Those who disapprove – remember: he will be paying his loan with $ that is half its value from today in 10 years, quarter its value in 20 years and 1/8th in 30 years. All the time getting a tax writeoff. If this is not a deal, what is it? In effect, he will be paying just a fraction of the amount owed, in terms of purchasing power.

[bsrsharma]

I think you got a very good loan. 6.1% APR FIXED for a 40 year loan, 100% LTV, no PMI is just insanely great. What are your payments like?

Those who disapprove – remember: he will be paying his loan with $ that is half its value from today in 10 years, quarter its value in 20 years and 1/8th in 30 years. All the time getting a tax writeoff. If this is not a deal, what is it? In effect, he will be paying just a fraction of the amount owed, in terms of purchasing power.

[patientrenter]

We all agree that it’s a “good” loan, in the sense that you’re paying less than it’s worth. Who is subsidizing you to keep real estate prices high? I’ll bet the money didn’t all come from the NAR.

Sorry to be so blunt. You’re probably a nice person to talk with, but you’re taking advantage of a system that doubly screws taxpayers who pay bucketloads of tax to pay for crackpot schemes like this, and who refuse to abandon financial responsibility to overpay for their own home. As a result, these responsible taxpayers are priced out themselves.

Patient renter in OC

[the dingo]

Patientrenter,
First of all you are right, I am a nice person to talk to, but to be blunt, capitalism is built on getting an advantage in the system. It’s legal and it is available.
I’m not sure how me getting this loan is taking advantage of people or screwing taxpayers? Also, “overpaying” is a odd comment. Once again capitalism says that something is worth what one will pay.
And I don’t feel a loan with a 40 year track record which has allowed many low and medium income families to afford homes, which by the way would always be unaffordable for these people is a bad “crackpot scheme”. I also have a feeling if you met the criteria, you would jump on it also.

[Ricechex]

Can you refi using one of these loans? Also, can it be used in combination with other programs?

[drunkle]

what happens if you start making more than the limit after signing?

seems like a good product for qualified buyers. but the amount of the loan seems absurd… what happens if you’re trying to buy in manhatten? the hollywood hills? the hamptons? do they give you the million dollar loan on your sub 90k income?

[Raybyrnes]

In New York you would have to go through SONYMA. The income only matters at the time of qualificaiton. It is a great program for a person with a good job but is now going abck to grad school. There income is artificially low during this period of time so they would qualify as low income earners. Once they come out of school their income typically rises dramatically and they now have a residence and a low cost loan program. I beleive one of the other benefit is that they don’t include federal student loan debt into the formula.

[Raybyrnes]

In New York you would have to go through SONYMA. The income only matters at the time of qualificaiton. It is a great program for a person with a good job but is now going abck to grad school. There income is artificially low during this period of time so they would qualify as low income earners. Once they come out of school their income typically rises dramatically and they now have a residence and a low cost loan program. I beleive one of the other benefit is that they don’t include federal student loan debt into the formula.

[Raybyrnes]

In New York you would have to go through SONYMA. The income only matters at the time of qualificaiton. It is a great program for a person with a good job but is now going abck to grad school. There income is artificially low during this period of time so they would qualify as low income earners. Once they come out of school their income typically rises dramatically and they now have a residence and a low cost loan program. I beleive one of the other benefit is that they don’t include federal student loan debt into the formula.

[drunkle]

what happens if you start making more than the limit after signing?

seems like a good product for qualified buyers. but the amount of the loan seems absurd… what happens if you’re trying to buy in manhatten? the hollywood hills? the hamptons? do they give you the million dollar loan on your sub 90k income?

[drunkle]

what happens if you start making more than the limit after signing?

seems like a good product for qualified buyers. but the amount of the loan seems absurd… what happens if you’re trying to buy in manhatten? the hollywood hills? the hamptons? do they give you the million dollar loan on your sub 90k income?

[Ricechex]

Can you refi using one of these loans? Also, can it be used in combination with other programs?

[Ricechex]

Can you refi using one of these loans? Also, can it be used in combination with other programs?

[the dingo]

Patientrenter,
First of all you are right, I am a nice person to talk to, but to be blunt, capitalism is built on getting an advantage in the system. It’s legal and it is available.
I’m not sure how me getting this loan is taking advantage of people or screwing taxpayers? Also, “overpaying” is a odd comment. Once again capitalism says that something is worth what one will pay.
And I don’t feel a loan with a 40 year track record which has allowed many low and medium income families to afford homes, which by the way would always be unaffordable for these people is a bad “crackpot scheme”. I also have a feeling if you met the criteria, you would jump on it also.

[the dingo]

Patientrenter,
First of all you are right, I am a nice person to talk to, but to be blunt, capitalism is built on getting an advantage in the system. It’s legal and it is available.
I’m not sure how me getting this loan is taking advantage of people or screwing taxpayers? Also, “overpaying” is a odd comment. Once again capitalism says that something is worth what one will pay.
And I don’t feel a loan with a 40 year track record which has allowed many low and medium income families to afford homes, which by the way would always be unaffordable for these people is a bad “crackpot scheme”. I also have a feeling if you met the criteria, you would jump on it also.

[patientrenter]

We all agree that it’s a “good” loan, in the sense that you’re paying less than it’s worth. Who is subsidizing you to keep real estate prices high? I’ll bet the money didn’t all come from the NAR.

Sorry to be so blunt. You’re probably a nice person to talk with, but you’re taking advantage of a system that doubly screws taxpayers who pay bucketloads of tax to pay for crackpot schemes like this, and who refuse to abandon financial responsibility to overpay for their own home. As a result, these responsible taxpayers are priced out themselves.

Patient renter in OC

[patientrenter]

We all agree that it’s a “good” loan, in the sense that you’re paying less than it’s worth. Who is subsidizing you to keep real estate prices high? I’ll bet the money didn’t all come from the NAR.

Sorry to be so blunt. You’re probably a nice person to talk with, but you’re taking advantage of a system that doubly screws taxpayers who pay bucketloads of tax to pay for crackpot schemes like this, and who refuse to abandon financial responsibility to overpay for their own home. As a result, these responsible taxpayers are priced out themselves.

Patient renter in OC

[asragov]

Do you have a web site / phone number for more information on this program?

[asragov]

Do you have a web site / phone number for more information on this program?

[asragov]

Do you have a web site / phone number for more information on this program?

[asragov]

Do you have a web site / phone number for more information on this program?

[Author]

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