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citydweller
Participantsandiego, you say you bought to occupy, but then you say you don’t want to fund a bad “investment”. So which was it? A home or an investment?
If it was truly purchased as a home that you liked and could afford, it’s current value should not be an issue.
Is your condo by chance at Aqua Vista? And have you finally had enough of the valet parking? I don’t blame you for wanting to walk away from it, but don’t try to pass it off as having bought it as your “home”.
Participantsandiego, you posted that your neighbor was appraised at $1 million and that you had 65% LTV at the time, which is how I came up with the $650k loan amount, you later posted that you put $100K down, so I assumed a $750K purchase price.
I was trying to be very conservative on the other numbers, so as not to overstate the rent vs purchase difference. For a downtown condo I would guess your HOA is probably closer to $800.
Regardless, my point still stands that it’s important to base real estate purchase decisions on sound fundamentals, not hyper inflated appraisals and hopes of a forever rising real estate market.
Knowing what you know now, do you think in the future you will probably take steps to avoid finding yourself in another situation similar to what you’re in now?
Participantsandiego, you posted that your neighbor was appraised at $1 million and that you had 65% LTV at the time, which is how I came up with the $650k loan amount, you later posted that you put $100K down, so I assumed a $750K purchase price.
I was trying to be very conservative on the other numbers, so as not to overstate the rent vs purchase difference. For a downtown condo I would guess your HOA is probably closer to $800.
Regardless, my point still stands that it’s important to base real estate purchase decisions on sound fundamentals, not hyper inflated appraisals and hopes of a forever rising real estate market.
Knowing what you know now, do you think in the future you will probably take steps to avoid finding yourself in another situation similar to what you’re in now?
Participantsandiego, you posted that your neighbor was appraised at $1 million and that you had 65% LTV at the time, which is how I came up with the $650k loan amount, you later posted that you put $100K down, so I assumed a $750K purchase price.
I was trying to be very conservative on the other numbers, so as not to overstate the rent vs purchase difference. For a downtown condo I would guess your HOA is probably closer to $800.
Regardless, my point still stands that it’s important to base real estate purchase decisions on sound fundamentals, not hyper inflated appraisals and hopes of a forever rising real estate market.
Knowing what you know now, do you think in the future you will probably take steps to avoid finding yourself in another situation similar to what you’re in now?
Participantsandiego, you posted that your neighbor was appraised at $1 million and that you had 65% LTV at the time, which is how I came up with the $650k loan amount, you later posted that you put $100K down, so I assumed a $750K purchase price.
I was trying to be very conservative on the other numbers, so as not to overstate the rent vs purchase difference. For a downtown condo I would guess your HOA is probably closer to $800.
Regardless, my point still stands that it’s important to base real estate purchase decisions on sound fundamentals, not hyper inflated appraisals and hopes of a forever rising real estate market.
Knowing what you know now, do you think in the future you will probably take steps to avoid finding yourself in another situation similar to what you’re in now?
Participantsandiego, you posted that your neighbor was appraised at $1 million and that you had 65% LTV at the time, which is how I came up with the $650k loan amount, you later posted that you put $100K down, so I assumed a $750K purchase price.
I was trying to be very conservative on the other numbers, so as not to overstate the rent vs purchase difference. For a downtown condo I would guess your HOA is probably closer to $800.
Regardless, my point still stands that it’s important to base real estate purchase decisions on sound fundamentals, not hyper inflated appraisals and hopes of a forever rising real estate market.
Knowing what you know now, do you think in the future you will probably take steps to avoid finding yourself in another situation similar to what you’re in now?
ParticipantIf I choose to believe a chocolate cake is worth 1 million dollars, whose fault is it? The one selling it to me? Or mine?…
Great analogy, marion. And if the bank had loaned you the million dollars, would it be their fault? No.
sandiego’s predicament is exactly why the fundamentals that I’ve learned from Rich and all the Piggington posters should be taught to high school seniors.
From his/her posts it appears the condo was purchased for $750K with $100K down. At 5.75 fixed the mortgage is probably around $3500, prop tax $750, HOA at least $300, opportunity cost on the $100K down at least $400 per month. Assuming the highest tax bracket, tax savings of approx $950 per month, so monthly expense minimum $4000.
If you could rent this condo for anywhere near that, then it’s not such a bad deal, whatever selling prices of nearby condos are going for.
However, if you could have rented this for a lot less, and had been aware of real estate fundamentals, you would have thought twice before buying.
Another mistake is not getting 30 year fixed. I’m sure you assumed that when the time came you could refinance, but people need to be aware that there is always a risk involved in not locking in for the entire term. A lesson you’ve learned the hard way.
ParticipantIf I choose to believe a chocolate cake is worth 1 million dollars, whose fault is it? The one selling it to me? Or mine?…
Great analogy, marion. And if the bank had loaned you the million dollars, would it be their fault? No.
sandiego’s predicament is exactly why the fundamentals that I’ve learned from Rich and all the Piggington posters should be taught to high school seniors.
From his/her posts it appears the condo was purchased for $750K with $100K down. At 5.75 fixed the mortgage is probably around $3500, prop tax $750, HOA at least $300, opportunity cost on the $100K down at least $400 per month. Assuming the highest tax bracket, tax savings of approx $950 per month, so monthly expense minimum $4000.
If you could rent this condo for anywhere near that, then it’s not such a bad deal, whatever selling prices of nearby condos are going for.
However, if you could have rented this for a lot less, and had been aware of real estate fundamentals, you would have thought twice before buying.
Another mistake is not getting 30 year fixed. I’m sure you assumed that when the time came you could refinance, but people need to be aware that there is always a risk involved in not locking in for the entire term. A lesson you’ve learned the hard way.
ParticipantIf I choose to believe a chocolate cake is worth 1 million dollars, whose fault is it? The one selling it to me? Or mine?…
Great analogy, marion. And if the bank had loaned you the million dollars, would it be their fault? No.
sandiego’s predicament is exactly why the fundamentals that I’ve learned from Rich and all the Piggington posters should be taught to high school seniors.
From his/her posts it appears the condo was purchased for $750K with $100K down. At 5.75 fixed the mortgage is probably around $3500, prop tax $750, HOA at least $300, opportunity cost on the $100K down at least $400 per month. Assuming the highest tax bracket, tax savings of approx $950 per month, so monthly expense minimum $4000.
If you could rent this condo for anywhere near that, then it’s not such a bad deal, whatever selling prices of nearby condos are going for.
However, if you could have rented this for a lot less, and had been aware of real estate fundamentals, you would have thought twice before buying.
Another mistake is not getting 30 year fixed. I’m sure you assumed that when the time came you could refinance, but people need to be aware that there is always a risk involved in not locking in for the entire term. A lesson you’ve learned the hard way.
ParticipantIf I choose to believe a chocolate cake is worth 1 million dollars, whose fault is it? The one selling it to me? Or mine?…
Great analogy, marion. And if the bank had loaned you the million dollars, would it be their fault? No.
sandiego’s predicament is exactly why the fundamentals that I’ve learned from Rich and all the Piggington posters should be taught to high school seniors.
From his/her posts it appears the condo was purchased for $750K with $100K down. At 5.75 fixed the mortgage is probably around $3500, prop tax $750, HOA at least $300, opportunity cost on the $100K down at least $400 per month. Assuming the highest tax bracket, tax savings of approx $950 per month, so monthly expense minimum $4000.
If you could rent this condo for anywhere near that, then it’s not such a bad deal, whatever selling prices of nearby condos are going for.
However, if you could have rented this for a lot less, and had been aware of real estate fundamentals, you would have thought twice before buying.
Another mistake is not getting 30 year fixed. I’m sure you assumed that when the time came you could refinance, but people need to be aware that there is always a risk involved in not locking in for the entire term. A lesson you’ve learned the hard way.
ParticipantIf I choose to believe a chocolate cake is worth 1 million dollars, whose fault is it? The one selling it to me? Or mine?…
Great analogy, marion. And if the bank had loaned you the million dollars, would it be their fault? No.
sandiego’s predicament is exactly why the fundamentals that I’ve learned from Rich and all the Piggington posters should be taught to high school seniors.
From his/her posts it appears the condo was purchased for $750K with $100K down. At 5.75 fixed the mortgage is probably around $3500, prop tax $750, HOA at least $300, opportunity cost on the $100K down at least $400 per month. Assuming the highest tax bracket, tax savings of approx $950 per month, so monthly expense minimum $4000.
If you could rent this condo for anywhere near that, then it’s not such a bad deal, whatever selling prices of nearby condos are going for.
However, if you could have rented this for a lot less, and had been aware of real estate fundamentals, you would have thought twice before buying.
Another mistake is not getting 30 year fixed. I’m sure you assumed that when the time came you could refinance, but people need to be aware that there is always a risk involved in not locking in for the entire term. A lesson you’ve learned the hard way.
November 30, 2007 at 5:21 PM in reply to: Someone please explain this rate lock thing to me!!! #105956ParticipantCould an unintended consequence of helping people stay in their overpriced homes be a sharp drop in consumer spending? These families will be stretching to make their payments and no longer have access to HELOC money. If they were forced to leave their house (through foreclosure), and had to go rent something they could afford, then they would have more disposable income for eating out, vacations, etc.
I guess what I’m trying to say is that the kindest thing the government could do is to allow these people to get out of the housing trap they’re in and allow them to begin “starting over” that much sooner.
November 30, 2007 at 5:21 PM in reply to: Someone please explain this rate lock thing to me!!! #105989ParticipantCould an unintended consequence of helping people stay in their overpriced homes be a sharp drop in consumer spending? These families will be stretching to make their payments and no longer have access to HELOC money. If they were forced to leave their house (through foreclosure), and had to go rent something they could afford, then they would have more disposable income for eating out, vacations, etc.
I guess what I’m trying to say is that the kindest thing the government could do is to allow these people to get out of the housing trap they’re in and allow them to begin “starting over” that much sooner.
November 30, 2007 at 5:21 PM in reply to: Someone please explain this rate lock thing to me!!! #105999ParticipantCould an unintended consequence of helping people stay in their overpriced homes be a sharp drop in consumer spending? These families will be stretching to make their payments and no longer have access to HELOC money. If they were forced to leave their house (through foreclosure), and had to go rent something they could afford, then they would have more disposable income for eating out, vacations, etc.
I guess what I’m trying to say is that the kindest thing the government could do is to allow these people to get out of the housing trap they’re in and allow them to begin “starting over” that much sooner.
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