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October 12, 2007 at 12:12 PM in reply to: how big of a mortgage will i be able to afford if ……. #88483October 12, 2007 at 12:12 PM in reply to: how big of a mortgage will i be able to afford if ……. #88490
HLS
ParticipantCBAD has a valid reason for his fears.
But the true cost is very expensive insurance.There is such a thing as conservative and there is extremely conservative.
In reality, having a home that is paid off is not necessarily the answer. Having a fixed rate long term loan with cash in the bank to pay that loan off is a safer bet.
Equity isn’t CASH. Never has been and never will be.
Being in the lending biz, I see people with “equity” that is tied up in a stucco box that they cannot get to.I know of a house that burned down that was free and clear that took years to settle with the insurance company and turned in to a legal battle. The guy was flat broke waiting for his settlement.
Every dollar that gets paid down on a mortgage is a dollar that you may never see again or be able to use in any other way.
There WILL probably be a depression in our lifetimes, probably sooner rather than later.
Many people’s lives are already in a depression. For them, it can’t get much worse. They don’t need the govt telling them that there is a depression, which is another issue.
Based on GDP, economists don’t even agree on exactly what a depression or recession is.
Standard definition of declining stats, but they lie about the stats and then revise the numbers.When we do have one, most people wont know it, because the current fascination with new terms will be calling it something else. A mild correction, a severe disruption, a conundrum, Irrational exuberance, the terms don’t stop.
87 crash was temporary, not like dot com boom. They must have had some nasty positions.
I don’t recommend highly risky alternatives to paying off a mortgage.
We all have different reasons for doing what we do.
CBAD, I am sorry about what you experienced at a young age.
October 12, 2007 at 11:29 AM in reply to: how big of a mortgage will i be able to afford if ……. #88467ParticipantCBAD,,,
At your age, I’d say that is a silly thing to do, but it’s your choice.
A home goes up or down regardless of what you owe on it.Being all in creates a terrible return considering that leverage is available at the cheapest possible rates on your primary residence.
Over time, you may end up with $10 Million, which is great.
However,
If that money tied up in your stucco box was invested wisely elsewhere, you could end up with $15 million.(I probably don’t know what I’m talking about though)
October 12, 2007 at 11:29 AM in reply to: how big of a mortgage will i be able to afford if ……. #88474ParticipantCBAD,,,
At your age, I’d say that is a silly thing to do, but it’s your choice.
A home goes up or down regardless of what you owe on it.Being all in creates a terrible return considering that leverage is available at the cheapest possible rates on your primary residence.
Over time, you may end up with $10 Million, which is great.
However,
If that money tied up in your stucco box was invested wisely elsewhere, you could end up with $15 million.(I probably don’t know what I’m talking about though)
October 12, 2007 at 11:16 AM in reply to: how big of a mortgage will i be able to afford if ……. #88457ParticipantCBAD…
When I am in my 70’s-80’s I want to have as much debt as possible, with a pile of money rolling in from investments every month, so I can do whatever I want and give money away as I choose..What I don’t want is to be living in a box that is worth $2 or $3 million and own it free and clear.
When you can lock in a long term interest rate and end up paying it back in cheaper dollars why tie up cash now ?
I’d say that it’s very possible that in the next 10-15 years, you will be able to safely earn 8-10% from bank interest, and have a 6% or less mortgage.
I’d like to have as much manageable debt as possible out there and have money available to enjoy my life now, while I can.
I think that 15 YR loans and paying down a mortgage fast is a foolish thing to do for most people. Too many people are a slave to their mortgage.
If you have regular monthly income, and monthly debt is under control, who cares.
I have studied the value of time and money over many years, I don’t think that most people get it.
I’m not waiting until I’m in my 60’s to start enjoying life. I wanna die with debt, not $5 million tied up. Just my 2c.
October 12, 2007 at 11:16 AM in reply to: how big of a mortgage will i be able to afford if ……. #88464ParticipantCBAD…
When I am in my 70’s-80’s I want to have as much debt as possible, with a pile of money rolling in from investments every month, so I can do whatever I want and give money away as I choose..What I don’t want is to be living in a box that is worth $2 or $3 million and own it free and clear.
When you can lock in a long term interest rate and end up paying it back in cheaper dollars why tie up cash now ?
I’d say that it’s very possible that in the next 10-15 years, you will be able to safely earn 8-10% from bank interest, and have a 6% or less mortgage.
I’d like to have as much manageable debt as possible out there and have money available to enjoy my life now, while I can.
I think that 15 YR loans and paying down a mortgage fast is a foolish thing to do for most people. Too many people are a slave to their mortgage.
If you have regular monthly income, and monthly debt is under control, who cares.
I have studied the value of time and money over many years, I don’t think that most people get it.
I’m not waiting until I’m in my 60’s to start enjoying life. I wanna die with debt, not $5 million tied up. Just my 2c.
ParticipantSEA..
Send me an email at [email protected] with your contact info…
Please post here that have done that so I can look for it. (It’s an address that I don’t check often)I might be able to help you from here.
ParticipantSEA..
Send me an email at [email protected] with your contact info…
Please post here that have done that so I can look for it. (It’s an address that I don’t check often)I might be able to help you from here.
October 12, 2007 at 10:35 AM in reply to: how big of a mortgage will i be able to afford if ……. #88440ParticipantDuplicate
October 12, 2007 at 10:35 AM in reply to: how big of a mortgage will i be able to afford if ……. #88446ParticipantDuplicate
October 12, 2007 at 10:33 AM in reply to: how big of a mortgage will i be able to afford if ……. #88437ParticipantFormer….
On the other extreme,,, think about cheap items that are financed.. People who use credit cards to buy everything, including groceries.They have no idea what they are actually paying in the long run for anything that they buy.
There should be NO home lenders and NO credit cards. Only buy what you have cash for. Home prices would drop real fast.
Life was simpler when there were no credit cards.
There has always been credit though.I wonder who Adam and Eve borrowed from…..
October 12, 2007 at 10:33 AM in reply to: how big of a mortgage will i be able to afford if ……. #88444ParticipantFormer….
On the other extreme,,, think about cheap items that are financed.. People who use credit cards to buy everything, including groceries.They have no idea what they are actually paying in the long run for anything that they buy.
There should be NO home lenders and NO credit cards. Only buy what you have cash for. Home prices would drop real fast.
Life was simpler when there were no credit cards.
There has always been credit though.I wonder who Adam and Eve borrowed from…..
October 12, 2007 at 10:22 AM in reply to: how big of a mortgage will i be able to afford if ……. #88425ParticipantHi PERT,,
I am in the mortgage biz…First of all, you MAY have a problem using income from brand new jobs. Some lenders don’t give much/any weight to that.
Even with huge assets, lenders like to see INCOME.
Sometimes retired people need to go stated income to get approved, but they still need income sources to verify.Without about 20 pieces of information, there is no possible way to answer your question correctly.
Your middle credit scores are the first question. The higher they are, the better it is.
Depends how much other monthly debt you have (credit cards, car payments etc)Assuming a loan amount of $417K or less, at todays BEST rates FULL DOC you are looking at a monthly payment of about $600 per $100K for a fully amortized 30 yr fixed.
OR
$530 per $100K interest only.Add at least $100 monthly for property taxes per $100K of Purchase price to the payment above.
YOU need to decide what is comfortable debt for you. IF you qualify, lenders will loan you more than should be comfortable, (it’s insane)
They might loan up to 60% of gross income in some cases.
How much of your income are you willing to spend to “buy” is your decision.I can underwrite FNMA loans, I never know what they will approve or decline, it’s based on overall strength of the borrwers. With your assets, you might be approved for a great rate.
Without a better picture of you & “nice lady” it’s impossible to quote you.
Your situation might look like a no brainer a lender, however, you may not get full doc great pricing.
If you haven’t had a self employed side business for at least 2 years, you cannot go stated.With a decent credit score and $200K down, you might also get an OK rate with a no doc or no income loan from a prime lender
OR
a loan from a subprime lender.This is where they step in, situations that cannot get approved at better rates.
Who knows what rates, programs or guidelines will be next spring.
I always wonder….
What if there were NO lenders and people had to pay cash for houses. I bet that prices would be a whole lot lower….October 12, 2007 at 10:22 AM in reply to: how big of a mortgage will i be able to afford if ……. #88432ParticipantHi PERT,,
I am in the mortgage biz…First of all, you MAY have a problem using income from brand new jobs. Some lenders don’t give much/any weight to that.
Even with huge assets, lenders like to see INCOME.
Sometimes retired people need to go stated income to get approved, but they still need income sources to verify.Without about 20 pieces of information, there is no possible way to answer your question correctly.
Your middle credit scores are the first question. The higher they are, the better it is.
Depends how much other monthly debt you have (credit cards, car payments etc)Assuming a loan amount of $417K or less, at todays BEST rates FULL DOC you are looking at a monthly payment of about $600 per $100K for a fully amortized 30 yr fixed.
OR
$530 per $100K interest only.Add at least $100 monthly for property taxes per $100K of Purchase price to the payment above.
YOU need to decide what is comfortable debt for you. IF you qualify, lenders will loan you more than should be comfortable, (it’s insane)
They might loan up to 60% of gross income in some cases.
How much of your income are you willing to spend to “buy” is your decision.I can underwrite FNMA loans, I never know what they will approve or decline, it’s based on overall strength of the borrwers. With your assets, you might be approved for a great rate.
Without a better picture of you & “nice lady” it’s impossible to quote you.
Your situation might look like a no brainer a lender, however, you may not get full doc great pricing.
If you haven’t had a self employed side business for at least 2 years, you cannot go stated.With a decent credit score and $200K down, you might also get an OK rate with a no doc or no income loan from a prime lender
OR
a loan from a subprime lender.This is where they step in, situations that cannot get approved at better rates.
Who knows what rates, programs or guidelines will be next spring.
I always wonder….
What if there were NO lenders and people had to pay cash for houses. I bet that prices would be a whole lot lower….ParticipantWithout a lease (or a job), there is no income…
This will be underwriter’s discretion.Without knowing 20+ pieces of info, it’s hard to say what you could get approved for.
If you are strong financially, with reserves and a good credit score, It could be a 2nd home to some lenders and only a vacant rental to others.The underwriter just needs to be comfortable that payments can be made. If rental income is needed to qualify, and there are no $$ reserves, it’s tougher, but not impossible.
It’s still possible to get 100% or even 105% financing for homebuyers. There are still subprime programs.
There is an unlimited amount of money available.Situations that are not perfect cookie cutter may require some work to find a lender that will want that risk, so even though a bank may turn down a borrower, it definitely doesn’t mean they cannot get a loan.
What the rate might be is a different story.The more secure a lender is, the easier/better the loan will be.
Some people have some crazy financial situations and even with huge income they are difficult to get loans for.It’s all about qualifying, which just isn’t easy to explain.
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