Why can I not get a loan?

[ocrenter]

nc4,

of all of the posts so far, TG once again delivers. it is very true, that 800k home in a couple of years will be a 600k home.

if you are one of those with climbing expectations, look at it this way. check out how many > $1 million homes are out there on the MLS. HUGE!

those will become $800k in 2 years. but remember 20% down will still be mandatory so start saving! =)

oc

[(former)FormerSanDiegan]

[quote=pepsi]

I think it is more like $9500, because you need to deduct the standard deduction:
(720K * 0.6 – STD ) * 0.34

[/quote]

Wrong. Though your point might be correct for those in lower income ranges (e.g. 100K and less),
the truth is that for most people in the 200K + tax bracket that they pay enough in state income tax and property tax alone to exceed the standard deduction.

[(former)FormerSanDiegan]

[quote=pepsi]

I think it is more like $9500, because you need to deduct the standard deduction:
(720K * 0.6 – STD ) * 0.34

[/quote]

Wrong. Though your point might be correct for those in lower income ranges (e.g. 100K and less),
the truth is that for most people in the 200K + tax bracket that they pay enough in state income tax and property tax alone to exceed the standard deduction.

[(former)FormerSanDiegan]

[quote=pepsi]

I think it is more like $9500, because you need to deduct the standard deduction:
(720K * 0.6 – STD ) * 0.34

[/quote]

Wrong. Though your point might be correct for those in lower income ranges (e.g. 100K and less),
the truth is that for most people in the 200K + tax bracket that they pay enough in state income tax and property tax alone to exceed the standard deduction.

[(former)FormerSanDiegan]

[quote=pepsi]

I think it is more like $9500, because you need to deduct the standard deduction:
(720K * 0.6 – STD ) * 0.34

[/quote]

Wrong. Though your point might be correct for those in lower income ranges (e.g. 100K and less),
the truth is that for most people in the 200K + tax bracket that they pay enough in state income tax and property tax alone to exceed the standard deduction.

[(former)FormerSanDiegan]

[quote=pepsi]

I think it is more like $9500, because you need to deduct the standard deduction:
(720K * 0.6 – STD ) * 0.34

[/quote]

Wrong. Though your point might be correct for those in lower income ranges (e.g. 100K and less),
the truth is that for most people in the 200K + tax bracket that they pay enough in state income tax and property tax alone to exceed the standard deduction.

[Eugene]

[quote=pepsi][quote=XBoxBoy][quote=ncounty4]No, we don’t think that renting is a wise financial choice in our tax bracket.[/quote]

Actually ncounty4, I suggest you reconsider that. Compare these two case: 1) you buy an 800k property now, 2) you rent an equivalent property for two years, then buy.

In the first case, you will receive a tax deduction worth about 1/3rd or what you pay in interest on your loan. Depending on your interest rate, and the exact amount of your loan, I figure that deduction will be worth about 15k per year, or 30k for two years. ($720k loan times 6% interest times 34% tax bracket = $14688)

[/quote]

I think it is more like $9500, because you need to deduct the standard deduction:
(720K * 0.6 – STD ) * 0.34

[/quote]

I have plugged OP’s numbers into my excel home cost calculator. If they are able to find a lender that offers 90% jumbos, their PITI will be around 6K, their combined tax deductions (federal and state) would be $1800/month ($22K/year), and $550 would go towards principal. The “cost to own” is 3900-4000. With 20% down, the “cost to own” is 3300-3400.

If the house can be rented for 2500, buying does not make sense. If it can be rented for 3500, it’s a toss up.

The problem I see with waiting 2 more years is this. Right now the high end market is depressed because jumbos are expensive and second loans are scarce. If things stay ugly long enough, the house may well fall to 600k – temporarily. Sooner or later the housing market will turn around. When it does, jumbo interest rates will fall, seconds will reappear, 401K’s will reflate, and high end might bounce back.

[Eugene]

[quote=pepsi][quote=XBoxBoy][quote=ncounty4]No, we don’t think that renting is a wise financial choice in our tax bracket.[/quote]

Actually ncounty4, I suggest you reconsider that. Compare these two case: 1) you buy an 800k property now, 2) you rent an equivalent property for two years, then buy.

In the first case, you will receive a tax deduction worth about 1/3rd or what you pay in interest on your loan. Depending on your interest rate, and the exact amount of your loan, I figure that deduction will be worth about 15k per year, or 30k for two years. ($720k loan times 6% interest times 34% tax bracket = $14688)

[/quote]

I think it is more like $9500, because you need to deduct the standard deduction:
(720K * 0.6 – STD ) * 0.34

[/quote]

I have plugged OP’s numbers into my excel home cost calculator. If they are able to find a lender that offers 90% jumbos, their PITI will be around 6K, their combined tax deductions (federal and state) would be $1800/month ($22K/year), and $550 would go towards principal. The “cost to own” is 3900-4000. With 20% down, the “cost to own” is 3300-3400.

If the house can be rented for 2500, buying does not make sense. If it can be rented for 3500, it’s a toss up.

The problem I see with waiting 2 more years is this. Right now the high end market is depressed because jumbos are expensive and second loans are scarce. If things stay ugly long enough, the house may well fall to 600k – temporarily. Sooner or later the housing market will turn around. When it does, jumbo interest rates will fall, seconds will reappear, 401K’s will reflate, and high end might bounce back.

[Eugene]

[quote=pepsi][quote=XBoxBoy][quote=ncounty4]No, we don’t think that renting is a wise financial choice in our tax bracket.[/quote]

Actually ncounty4, I suggest you reconsider that. Compare these two case: 1) you buy an 800k property now, 2) you rent an equivalent property for two years, then buy.

In the first case, you will receive a tax deduction worth about 1/3rd or what you pay in interest on your loan. Depending on your interest rate, and the exact amount of your loan, I figure that deduction will be worth about 15k per year, or 30k for two years. ($720k loan times 6% interest times 34% tax bracket = $14688)

[/quote]

I think it is more like $9500, because you need to deduct the standard deduction:
(720K * 0.6 – STD ) * 0.34

[/quote]

I have plugged OP’s numbers into my excel home cost calculator. If they are able to find a lender that offers 90% jumbos, their PITI will be around 6K, their combined tax deductions (federal and state) would be $1800/month ($22K/year), and $550 would go towards principal. The “cost to own” is 3900-4000. With 20% down, the “cost to own” is 3300-3400.

If the house can be rented for 2500, buying does not make sense. If it can be rented for 3500, it’s a toss up.

The problem I see with waiting 2 more years is this. Right now the high end market is depressed because jumbos are expensive and second loans are scarce. If things stay ugly long enough, the house may well fall to 600k – temporarily. Sooner or later the housing market will turn around. When it does, jumbo interest rates will fall, seconds will reappear, 401K’s will reflate, and high end might bounce back.

[Eugene]

[quote=pepsi][quote=XBoxBoy][quote=ncounty4]No, we don’t think that renting is a wise financial choice in our tax bracket.[/quote]

Actually ncounty4, I suggest you reconsider that. Compare these two case: 1) you buy an 800k property now, 2) you rent an equivalent property for two years, then buy.

In the first case, you will receive a tax deduction worth about 1/3rd or what you pay in interest on your loan. Depending on your interest rate, and the exact amount of your loan, I figure that deduction will be worth about 15k per year, or 30k for two years. ($720k loan times 6% interest times 34% tax bracket = $14688)

[/quote]

I think it is more like $9500, because you need to deduct the standard deduction:
(720K * 0.6 – STD ) * 0.34

[/quote]

I have plugged OP’s numbers into my excel home cost calculator. If they are able to find a lender that offers 90% jumbos, their PITI will be around 6K, their combined tax deductions (federal and state) would be $1800/month ($22K/year), and $550 would go towards principal. The “cost to own” is 3900-4000. With 20% down, the “cost to own” is 3300-3400.

If the house can be rented for 2500, buying does not make sense. If it can be rented for 3500, it’s a toss up.

The problem I see with waiting 2 more years is this. Right now the high end market is depressed because jumbos are expensive and second loans are scarce. If things stay ugly long enough, the house may well fall to 600k – temporarily. Sooner or later the housing market will turn around. When it does, jumbo interest rates will fall, seconds will reappear, 401K’s will reflate, and high end might bounce back.

[Eugene]

[quote=pepsi][quote=XBoxBoy][quote=ncounty4]No, we don’t think that renting is a wise financial choice in our tax bracket.[/quote]

Actually ncounty4, I suggest you reconsider that. Compare these two case: 1) you buy an 800k property now, 2) you rent an equivalent property for two years, then buy.

In the first case, you will receive a tax deduction worth about 1/3rd or what you pay in interest on your loan. Depending on your interest rate, and the exact amount of your loan, I figure that deduction will be worth about 15k per year, or 30k for two years. ($720k loan times 6% interest times 34% tax bracket = $14688)

[/quote]

I think it is more like $9500, because you need to deduct the standard deduction:
(720K * 0.6 – STD ) * 0.34

[/quote]

I have plugged OP’s numbers into my excel home cost calculator. If they are able to find a lender that offers 90% jumbos, their PITI will be around 6K, their combined tax deductions (federal and state) would be $1800/month ($22K/year), and $550 would go towards principal. The “cost to own” is 3900-4000. With 20% down, the “cost to own” is 3300-3400.

If the house can be rented for 2500, buying does not make sense. If it can be rented for 3500, it’s a toss up.

The problem I see with waiting 2 more years is this. Right now the high end market is depressed because jumbos are expensive and second loans are scarce. If things stay ugly long enough, the house may well fall to 600k – temporarily. Sooner or later the housing market will turn around. When it does, jumbo interest rates will fall, seconds will reappear, 401K’s will reflate, and high end might bounce back.

[kicksavedave]

[quote=sdduuuude]Double check that. Looks like PMI is deductable.[/quote]

As of April 2008 (when I got my loan), PMI is not deductible if you earn a combined $110K or more. The full PMI deduction is only available to folks making less than $100K, it phases out up to $110K. So if you are in the $250K bracket and looking for a jumbo house, it is almost mandatory that you put down 20% or buy down the PMI at about 3/8% interest (if they even allow that anymore), because that giant PMI sum each month is completely wasted, pure profit for the bank.

[kicksavedave]

[quote=sdduuuude]Double check that. Looks like PMI is deductable.[/quote]

As of April 2008 (when I got my loan), PMI is not deductible if you earn a combined $110K or more. The full PMI deduction is only available to folks making less than $100K, it phases out up to $110K. So if you are in the $250K bracket and looking for a jumbo house, it is almost mandatory that you put down 20% or buy down the PMI at about 3/8% interest (if they even allow that anymore), because that giant PMI sum each month is completely wasted, pure profit for the bank.

[kicksavedave]

[quote=sdduuuude]Double check that. Looks like PMI is deductable.[/quote]

As of April 2008 (when I got my loan), PMI is not deductible if you earn a combined $110K or more. The full PMI deduction is only available to folks making less than $100K, it phases out up to $110K. So if you are in the $250K bracket and looking for a jumbo house, it is almost mandatory that you put down 20% or buy down the PMI at about 3/8% interest (if they even allow that anymore), because that giant PMI sum each month is completely wasted, pure profit for the bank.

[kicksavedave]

[quote=sdduuuude]Double check that. Looks like PMI is deductable.[/quote]

As of April 2008 (when I got my loan), PMI is not deductible if you earn a combined $110K or more. The full PMI deduction is only available to folks making less than $100K, it phases out up to $110K. So if you are in the $250K bracket and looking for a jumbo house, it is almost mandatory that you put down 20% or buy down the PMI at about 3/8% interest (if they even allow that anymore), because that giant PMI sum each month is completely wasted, pure profit for the bank.

[Author]

Posts