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(former)FormerSanDiegan
ParticipantHistorically housing declines lead to recession and a decline in equities. Based on history, I would expect some sort of decline in equities, assuming we are heading into recession. I am not betting my portfolio on it, though.
However, I do not agree with those who think this would lead to a 50% decline in stocks as some former posters have predicted here … from the archives …
October 12, 2007 at 10:01 AM in reply to: how big of a mortgage will i be able to afford if ……. #88418ParticipantI’d also guesstimate in the 250-300K range. But you may have issues qualifying for the best rates on income from new jobs. Significant assets (e.g. 500K retirement funds) certainly helps.
Anyway, with 200K down if it were me and I wanted to be close to the best San Diego has to offer, for 450 – 500K by next year you can probably also get into SFRs in Bay Park or Bay HO/ West Clairemont, have Ocean Breezes (no A/C) and be 10 minutes or so from from downtown, Old Town, Mission Beach, Point Loma, La Jolla, Jack Murphy Stadium, Petco Park, etc…
October 12, 2007 at 10:01 AM in reply to: how big of a mortgage will i be able to afford if ……. #88424ParticipantI’d also guesstimate in the 250-300K range. But you may have issues qualifying for the best rates on income from new jobs. Significant assets (e.g. 500K retirement funds) certainly helps.
Anyway, with 200K down if it were me and I wanted to be close to the best San Diego has to offer, for 450 – 500K by next year you can probably also get into SFRs in Bay Park or Bay HO/ West Clairemont, have Ocean Breezes (no A/C) and be 10 minutes or so from from downtown, Old Town, Mission Beach, Point Loma, La Jolla, Jack Murphy Stadium, Petco Park, etc…
Participantseattle-relo : There are many ways to skin this cat depending on your finances.
One way, if you qualify, is to buy it as a second home. You just have to qualify to cover the PITI under whatever Debt Ratio lenders are using (again depends on the lender, as low as 28/36 to 45% or maybe more). For 175K with 20% down at 6.5%, I’m guessing you need to be able to handle additional debt of about 1250 per month (TX prop tax is about 2.5%). For example if you make 150K thats another 10% on your debt ratio compared to your current situation.
If you need the income to meet qualification guidelines, you would likely either need a less than full-doc loan (e.g. stated income) or find a friend that wants to rent your new house (at least temporarily on paper).
For penciling this out, I would assume 25 or 30% down. Loan rates at 6.5-7% (You can probably get as low as 6.25 with full doc, some points, 30% down and good scores, but I like to be conservative). Property tax at 2.5%. Maintenance at 1% of property value per year (in addition to any obvious up-front maintenance/repairs).
There’s probably myriad other ways. Talk to a mortgage broker, who might be able to spell out a couple scenarios for your situation.
Participantseattle-relo : There are many ways to skin this cat depending on your finances.
One way, if you qualify, is to buy it as a second home. You just have to qualify to cover the PITI under whatever Debt Ratio lenders are using (again depends on the lender, as low as 28/36 to 45% or maybe more). For 175K with 20% down at 6.5%, I’m guessing you need to be able to handle additional debt of about 1250 per month (TX prop tax is about 2.5%). For example if you make 150K thats another 10% on your debt ratio compared to your current situation.
If you need the income to meet qualification guidelines, you would likely either need a less than full-doc loan (e.g. stated income) or find a friend that wants to rent your new house (at least temporarily on paper).
For penciling this out, I would assume 25 or 30% down. Loan rates at 6.5-7% (You can probably get as low as 6.25 with full doc, some points, 30% down and good scores, but I like to be conservative). Property tax at 2.5%. Maintenance at 1% of property value per year (in addition to any obvious up-front maintenance/repairs).
There’s probably myriad other ways. Talk to a mortgage broker, who might be able to spell out a couple scenarios for your situation.
ParticipantWow – Usually it takes a few posts before someone diverts off-topic.
Anyway, there is no easy way to find out how much people have saved up in general. However, the RE agents on this board have occasionally given examples of the types of clients they see purchasing. That might give us a clue.I suspect that most 1st time buyers have less than 10% to put down. I’ve purchased several houses in my life. First one I put down 5% (about $8 K). Second house we put down 10% (about $30K). Third house we put down 20% (about $70K).
Based on my experiences and those of my peers, my guess is that few 1st time buyers have more than 25K saved up in liquid accounts to put down, regardless of race or ethnic origin.
ParticipantWow – Usually it takes a few posts before someone diverts off-topic.
Anyway, there is no easy way to find out how much people have saved up in general. However, the RE agents on this board have occasionally given examples of the types of clients they see purchasing. That might give us a clue.I suspect that most 1st time buyers have less than 10% to put down. I’ve purchased several houses in my life. First one I put down 5% (about $8 K). Second house we put down 10% (about $30K). Third house we put down 20% (about $70K).
Based on my experiences and those of my peers, my guess is that few 1st time buyers have more than 25K saved up in liquid accounts to put down, regardless of race or ethnic origin.
ParticipantWith a full doc loan, they would like to see a signed lease, with a stated it may not be an issue.
This reminds me of a problem I had about 5 years ago when purchasing a property for rental. It was previously owner-occupied, so there was no current tenant. About a week or so before closing, the lender requests a signed lease for the property to prove income (full-doc loan). My PM company will not advertise a property until I own it. In fact, I am not even sure I can legally lease a property to someone prior to actually owning the property, without adding some additional legaleze to the lease agreement.
This can create a catch-22. At that time my solution was to find a friend who was “thinking” about moving out of his home to remodel. He signed a Month-to-month lease with me that didn’t start until about two months after we planned to close. The lease also allowed that he could get out at any time with 30-days notice. It turned out that after we closed, he decided to wait on his remodel and canceled his lease agreement with me.ParticipantWith a full doc loan, they would like to see a signed lease, with a stated it may not be an issue.
This reminds me of a problem I had about 5 years ago when purchasing a property for rental. It was previously owner-occupied, so there was no current tenant. About a week or so before closing, the lender requests a signed lease for the property to prove income (full-doc loan). My PM company will not advertise a property until I own it. In fact, I am not even sure I can legally lease a property to someone prior to actually owning the property, without adding some additional legaleze to the lease agreement.
This can create a catch-22. At that time my solution was to find a friend who was “thinking” about moving out of his home to remodel. He signed a Month-to-month lease with me that didn’t start until about two months after we planned to close. The lease also allowed that he could get out at any time with 30-days notice. It turned out that after we closed, he decided to wait on his remodel and canceled his lease agreement with me.ParticipantOr this could be an opportunity. This is why you look in the drains, behind the outlets, in the attic, etc. Talk about built-in equity …
October 5, 2007 at 2:21 PM in reply to: Employment is down and so is early stock trading ` 200+ points…. #87075ParticipantYou’re only down about 3% overall. These stocks were already down by 50-70% from their peak when you shorted. I would expect some snap-back rallies on these occasionally against your position. It is way too early to go long on these and maybe too late to expect more HUGE moves to the down side. However, I’d guess that you’ll have some opportunities to close these positions at a decent gain of 10% or more sometime times over the next few months.
ParticipantMakes me wish I had poor credit and got a stupid loan a couple years ago. This won’t fly, though. It’s simply a veiled threat to the industry to try to make some progress on getting more folks out of suicide loans.
… but if it did happen, it’s a huge windfall to the borrower.
October 5, 2007 at 1:05 PM in reply to: Employment is down and so is early stock trading ` 200+ points…. #87070ParticipantA few months ago the S&P 500 was trading near a 12-year low in terms of Price-to-Earnings. Why do people think the stock market is significantly overvalued ? When the same principle was applied to housing (see Bubble Primer on this site), there was clearly a large deviation from historical norms. The same is not true currently for stocks. Stocks are trading very close to their long-term norm.
October 4, 2007 at 3:47 PM in reply to: Secretly stacking the deck against renters/prudent RE investors #87002ParticipantParanoid or not, the deck has always been stacked for the landowner and it’s not really a secret or a conspiracy or anything. This has been true for a number of centuries dating at least back to the concept of fiefdoms.
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