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Arraya
ParticipantJust because something is popular does not mean it is a good idea….
I/O loans are rarely a good idea and an absolutely horrible idea in a down market.
Surely your broker must have better reasoning than it’s “popular” for this choice. What is his reasoning?
If you are going to be in your house for 7yr+ then I assume he has you looking at 7 or 10 yr arm. correct? If it is anything less that could be suicide in this market.
Today the 30 year is a lower interest rate than the 7 and 10 year arms. So I can not fathom what he is thinking…
ParticipantJust because something is popular does not mean it is a good idea….
I/O loans are rarely a good idea and an absolutely horrible idea in a down market.
Surely your broker must have better reasoning than it’s “popular” for this choice. What is his reasoning?
If you are going to be in your house for 7yr+ then I assume he has you looking at 7 or 10 yr arm. correct? If it is anything less that could be suicide in this market.
Today the 30 year is a lower interest rate than the 7 and 10 year arms. So I can not fathom what he is thinking…
ParticipantLong term mortgage rates are not directly related to moves in the TNX. There is still an iverted yield curve. 30 YR rates are often less than 7 & 10 ARMS..
HLS,
I have always been confused by this… How does the inversion of the yeild curve affect pricing?
I’ve noticed the arms pricing out worse than 30 year. Is it fair to assume when the curve is not inverted that the arms would price out better than the 30 yr?
SD R,
I think the 10 year is still the best indicator of mtg rates that we have. However, anything that is not a “plain vanilla” conforming loan is in question.
I think underwriting is still a work in progress and will not be worked out for quite some time for anything that does not fall into the the, below 80% LTV, fully documented income, greater than 680 fico range. i.e non-conforming. It’s all up in the air.
until wall street and the lenders come to an agreement on how to underwrite non-conforming loans there will be no good indicators on these types of loans….
ParticipantLong term mortgage rates are not directly related to moves in the TNX. There is still an iverted yield curve. 30 YR rates are often less than 7 & 10 ARMS..
HLS,
I have always been confused by this… How does the inversion of the yeild curve affect pricing?
I’ve noticed the arms pricing out worse than 30 year. Is it fair to assume when the curve is not inverted that the arms would price out better than the 30 yr?
SD R,
I think the 10 year is still the best indicator of mtg rates that we have. However, anything that is not a “plain vanilla” conforming loan is in question.
I think underwriting is still a work in progress and will not be worked out for quite some time for anything that does not fall into the the, below 80% LTV, fully documented income, greater than 680 fico range. i.e non-conforming. It’s all up in the air.
until wall street and the lenders come to an agreement on how to underwrite non-conforming loans there will be no good indicators on these types of loans….
ParticipantCan’t talk specifics regarding the house. However 92104 is one the zips I monitor. I’ve been tracking # of SFRs under 400K as a marker. 4 months ago there was around 2-3 under, now last count was like 15+ and and a few peeking under 300. HUGE drop in the houses not by park. It’s sliding fast…
ParticipantCan’t talk specifics regarding the house. However 92104 is one the zips I monitor. I’ve been tracking # of SFRs under 400K as a marker. 4 months ago there was around 2-3 under, now last count was like 15+ and and a few peeking under 300. HUGE drop in the houses not by park. It’s sliding fast…
ParticipantI get it, I get it! I understand how the median is worthless. However, I expect it to fall as well.
You are preaching to the choir!
ParticipantI get it, I get it! I understand how the median is worthless. However, I expect it to fall as well.
You are preaching to the choir!
ParticipantNo sign! Got to Irvine Housing Blog. I’m seing 10-15% off peak prices left and right. And that is in Irvine! I don’t care what the median says I can see it with my own eyes. The median will fall!
ParticipantNo sign! Got to Irvine Housing Blog. I’m seing 10-15% off peak prices left and right. And that is in Irvine! I don’t care what the median says I can see it with my own eyes. The median will fall!
Participant“FYI, for my house to get back to rental range it would have to get down to the purchase price a decade ago net of installing landscaping, appliances, window treatments etc and rates would have to be around 5.5% and you would need to put down more than 25%.
Good luck on that one.”Are you bragging about you house being in a great area or are you trying to say I don’t know what I am talking about?
I guess it depends where you are looking….
Here is a house from my area that I picked at random. This would rent for above $2500
http://www.sdlookup.com/Property-4B35E3C4-1111_Washington_Pl_San_Diego_CA_92103
If prices drop 30% and I put 20% down @ 6.25 I’m right there…
Like I said I don’t see it being to far off in some areas. La jolla etc… that is a different story.
FYI…if you track that place back a decade and put 25% down you would be at ove 1K positive cash flow. I don’t see that happening either..
Participant“FYI, for my house to get back to rental range it would have to get down to the purchase price a decade ago net of installing landscaping, appliances, window treatments etc and rates would have to be around 5.5% and you would need to put down more than 25%.
Good luck on that one.”Are you bragging about you house being in a great area or are you trying to say I don’t know what I am talking about?
I guess it depends where you are looking….
Here is a house from my area that I picked at random. This would rent for above $2500
http://www.sdlookup.com/Property-4B35E3C4-1111_Washington_Pl_San_Diego_CA_92103
If prices drop 30% and I put 20% down @ 6.25 I’m right there…
Like I said I don’t see it being to far off in some areas. La jolla etc… that is a different story.
FYI…if you track that place back a decade and put 25% down you would be at ove 1K positive cash flow. I don’t see that happening either..
ParticipantI disagree that we will never see prices fall to the point where we can buy for the same price we can rent.
Now I am probably a good bit younger than most on this board and have not wittnessed the past RE cycles. However from what I have seen at the bottom of the past to cycles it breached that point both times. First, around 85-86 and second around 96. So why could it not happen again?
http://www.irvinehousingblog.com/2007/03/06/what-is-past-is-prologue/
Obviously not in the more desirable areas but it the moderate and lower income areas I see it not too far off now.
IMO affordibility is the biggest factor in behind falling prices, not the only one economy, suppy of easy money etc… But I think even with all the other stuff people are saying “This is crazy, I am not paying that, I am not going to be strapped to my mortgage just to be in the homeowners club”
When all is said and done the freemarket will decide where prices should be and where that is, is a guess. I’m banking on them being close to rental range. We will see…
ParticipantI disagree that we will never see prices fall to the point where we can buy for the same price we can rent.
Now I am probably a good bit younger than most on this board and have not wittnessed the past RE cycles. However from what I have seen at the bottom of the past to cycles it breached that point both times. First, around 85-86 and second around 96. So why could it not happen again?
http://www.irvinehousingblog.com/2007/03/06/what-is-past-is-prologue/
Obviously not in the more desirable areas but it the moderate and lower income areas I see it not too far off now.
IMO affordibility is the biggest factor in behind falling prices, not the only one economy, suppy of easy money etc… But I think even with all the other stuff people are saying “This is crazy, I am not paying that, I am not going to be strapped to my mortgage just to be in the homeowners club”
When all is said and done the freemarket will decide where prices should be and where that is, is a guess. I’m banking on them being close to rental range. We will see…
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