[patientrenter]

” ‘CogSciGuy, if you could get a loan for $1 million at a PTI of $2500, would you take it?’

Sure, probably. Wouldn’t you? If I’m purchasing a property with a PITI of $2500/month, I bet I could rent it out for many multiples of $2500/month.

Or was there a different point you were trying to make?”

CogSciGuy, I assumed you were talking about buying your own home, not an investment property. Let’s make that assumption.

My point is that you seem to calculate affordability based solely on the monthly payment, not the purchase price. If you buy a house for, let’s say, $1 million, then my point is that you can only REALLY afford the house if you can expect to earn, net of taxes etc, $1 million in excess of your other needs and wants over your lifetime. Looking at it that way forces you to understand that the price of the house is going to have to compete with some other long-term goals you may not want to sacrifice now. Do you really want to buy a $500K house if it means you may have to retire no earlier than 65, or limit your spending from now until you die to your current abstemious budget?

For years now, most buyers didn’t do the kind of analysis I’m describing, becaase they just assumed that if the price of the home became too much to bear, they would sell it and get a gain, or at least their money back. At today’s prices, that’s not a slam dunk assumption, regardless of your monthly payments.

Do you see what I’m getting at?

Patient renter in OC

PS
CAN SOMEONE TURN OFF THESE ITALICS, PLEASE?

[patientrenter]

” ‘CogSciGuy, if you could get a loan for $1 million at a PTI of $2500, would you take it?’

Sure, probably. Wouldn’t you? If I’m purchasing a property with a PITI of $2500/month, I bet I could rent it out for many multiples of $2500/month.

Or was there a different point you were trying to make?”

CogSciGuy, I assumed you were talking about buying your own home, not an investment property. Let’s make that assumption.

My point is that you seem to calculate affordability based solely on the monthly payment, not the purchase price. If you buy a house for, let’s say, $1 million, then my point is that you can only REALLY afford the house if you can expect to earn, net of taxes etc, $1 million in excess of your other needs and wants over your lifetime. Looking at it that way forces you to understand that the price of the house is going to have to compete with some other long-term goals you may not want to sacrifice now. Do you really want to buy a $500K house if it means you may have to retire no earlier than 65, or limit your spending from now until you die to your current abstemious budget?

For years now, most buyers didn’t do the kind of analysis I’m describing, becaase they just assumed that if the price of the home became too much to bear, they would sell it and get a gain, or at least their money back. At today’s prices, that’s not a slam dunk assumption, regardless of your monthly payments.

Do you see what I’m getting at?

Patient renter in OC

PS
CAN SOMEONE TURN OFF THESE ITALICS, PLEASE?

[patientrenter]

” ‘CogSciGuy, if you could get a loan for $1 million at a PTI of $2500, would you take it?’

Sure, probably. Wouldn’t you? If I’m purchasing a property with a PITI of $2500/month, I bet I could rent it out for many multiples of $2500/month.

Or was there a different point you were trying to make?”

CogSciGuy, I assumed you were talking about buying your own home, not an investment property. Let’s make that assumption.

My point is that you seem to calculate affordability based solely on the monthly payment, not the purchase price. If you buy a house for, let’s say, $1 million, then my point is that you can only REALLY afford the house if you can expect to earn, net of taxes etc, $1 million in excess of your other needs and wants over your lifetime. Looking at it that way forces you to understand that the price of the house is going to have to compete with some other long-term goals you may not want to sacrifice now. Do you really want to buy a $500K house if it means you may have to retire no earlier than 65, or limit your spending from now until you die to your current abstemious budget?

For years now, most buyers didn’t do the kind of analysis I’m describing, becaase they just assumed that if the price of the home became too much to bear, they would sell it and get a gain, or at least their money back. At today’s prices, that’s not a slam dunk assumption, regardless of your monthly payments.

Do you see what I’m getting at?

Patient renter in OC

PS
CAN SOMEONE TURN OFF THESE ITALICS, PLEASE?

[patientrenter]

” ‘CogSciGuy, if you could get a loan for $1 million at a PTI of $2500, would you take it?’

Sure, probably. Wouldn’t you? If I’m purchasing a property with a PITI of $2500/month, I bet I could rent it out for many multiples of $2500/month.

Or was there a different point you were trying to make?”

CogSciGuy, I assumed you were talking about buying your own home, not an investment property. Let’s make that assumption.

My point is that you seem to calculate affordability based solely on the monthly payment, not the purchase price. If you buy a house for, let’s say, $1 million, then my point is that you can only REALLY afford the house if you can expect to earn, net of taxes etc, $1 million in excess of your other needs and wants over your lifetime. Looking at it that way forces you to understand that the price of the house is going to have to compete with some other long-term goals you may not want to sacrifice now. Do you really want to buy a $500K house if it means you may have to retire no earlier than 65, or limit your spending from now until you die to your current abstemious budget?

For years now, most buyers didn’t do the kind of analysis I’m describing, becaase they just assumed that if the price of the home became too much to bear, they would sell it and get a gain, or at least their money back. At today’s prices, that’s not a slam dunk assumption, regardless of your monthly payments.

Do you see what I’m getting at?

Patient renter in OC

PS
CAN SOMEONE TURN OFF THESE ITALICS, PLEASE?

[patientrenter]

CogSciGuy, if you could get a loan for $1 million at a PTI of $2500, would you take it?

After all the analysis of what went wrong in the current bubble, I’d have thought readers of this blog would be looking at the actual price of the home, not just the monthly payments.

Patient renter in OC

[patientrenter]

CogSciGuy, if you could get a loan for $1 million at a PTI of $2500, would you take it?

After all the analysis of what went wrong in the current bubble, I’d have thought readers of this blog would be looking at the actual price of the home, not just the monthly payments.

Patient renter in OC

[patientrenter]

CogSciGuy, if you could get a loan for $1 million at a PTI of $2500, would you take it?

After all the analysis of what went wrong in the current bubble, I’d have thought readers of this blog would be looking at the actual price of the home, not just the monthly payments.

Patient renter in OC

[patientrenter]

CogSciGuy, if you could get a loan for $1 million at a PTI of $2500, would you take it?

After all the analysis of what went wrong in the current bubble, I’d have thought readers of this blog would be looking at the actual price of the home, not just the monthly payments.

Patient renter in OC

[patientrenter]

CogSciGuy, if you could get a loan for $1 million at a PTI of $2500, would you take it?

After all the analysis of what went wrong in the current bubble, I’d have thought readers of this blog would be looking at the actual price of the home, not just the monthly payments.

Patient renter in OC

[patientrenter]

And yet another vanguard guy here! I think that just means we’re cheap, and confident about our own investment choices.

socalarm, you don’t sound confident about your own investment choices, so you probably do want to get a FA. I concur with the others who said that you have the wrong FA. He is probably friendly, and you like him personally, or he seems super-professional in his manner, or whatever. Otherwise, you’d never have gone to, or stayed with, someone who puts you into investments you’re clearly not comfortable with.

I’d guess you need a new FA. Their job is two-fold:
(A) Psychological – Listen carefully to the what their client needs and wants. M
(B) Technical – Use their financial expertise to offer financial options that fit the client’s needs established in A.

It’s a feedback loop. If the FA doesn’t get it right the first time, then they should be listening carefully and making modifications pronto. Doesn’t sound like your guy is doing that. Sorry.

I’m in the financial business, so I don’t need an advisor (or don’t feel I do anyway), but I’ve actually been tempted to check out Rich because, as someone else said here, he gets it. You need to find an advisor that you can say that about.

Patient renter in OC

[patientrenter]

And yet another vanguard guy here! I think that just means we’re cheap, and confident about our own investment choices.

socalarm, you don’t sound confident about your own investment choices, so you probably do want to get a FA. I concur with the others who said that you have the wrong FA. He is probably friendly, and you like him personally, or he seems super-professional in his manner, or whatever. Otherwise, you’d never have gone to, or stayed with, someone who puts you into investments you’re clearly not comfortable with.

I’d guess you need a new FA. Their job is two-fold:
(A) Psychological – Listen carefully to the what their client needs and wants. M
(B) Technical – Use their financial expertise to offer financial options that fit the client’s needs established in A.

It’s a feedback loop. If the FA doesn’t get it right the first time, then they should be listening carefully and making modifications pronto. Doesn’t sound like your guy is doing that. Sorry.

I’m in the financial business, so I don’t need an advisor (or don’t feel I do anyway), but I’ve actually been tempted to check out Rich because, as someone else said here, he gets it. You need to find an advisor that you can say that about.

Patient renter in OC

[patientrenter]

And yet another vanguard guy here! I think that just means we’re cheap, and confident about our own investment choices.

socalarm, you don’t sound confident about your own investment choices, so you probably do want to get a FA. I concur with the others who said that you have the wrong FA. He is probably friendly, and you like him personally, or he seems super-professional in his manner, or whatever. Otherwise, you’d never have gone to, or stayed with, someone who puts you into investments you’re clearly not comfortable with.

I’d guess you need a new FA. Their job is two-fold:
(A) Psychological – Listen carefully to the what their client needs and wants. M
(B) Technical – Use their financial expertise to offer financial options that fit the client’s needs established in A.

It’s a feedback loop. If the FA doesn’t get it right the first time, then they should be listening carefully and making modifications pronto. Doesn’t sound like your guy is doing that. Sorry.

I’m in the financial business, so I don’t need an advisor (or don’t feel I do anyway), but I’ve actually been tempted to check out Rich because, as someone else said here, he gets it. You need to find an advisor that you can say that about.

Patient renter in OC

[patientrenter]

And yet another vanguard guy here! I think that just means we’re cheap, and confident about our own investment choices.

socalarm, you don’t sound confident about your own investment choices, so you probably do want to get a FA. I concur with the others who said that you have the wrong FA. He is probably friendly, and you like him personally, or he seems super-professional in his manner, or whatever. Otherwise, you’d never have gone to, or stayed with, someone who puts you into investments you’re clearly not comfortable with.

I’d guess you need a new FA. Their job is two-fold:
(A) Psychological – Listen carefully to the what their client needs and wants. M
(B) Technical – Use their financial expertise to offer financial options that fit the client’s needs established in A.

It’s a feedback loop. If the FA doesn’t get it right the first time, then they should be listening carefully and making modifications pronto. Doesn’t sound like your guy is doing that. Sorry.

I’m in the financial business, so I don’t need an advisor (or don’t feel I do anyway), but I’ve actually been tempted to check out Rich because, as someone else said here, he gets it. You need to find an advisor that you can say that about.

Patient renter in OC

[patientrenter]

And yet another vanguard guy here! I think that just means we’re cheap, and confident about our own investment choices.

socalarm, you don’t sound confident about your own investment choices, so you probably do want to get a FA. I concur with the others who said that you have the wrong FA. He is probably friendly, and you like him personally, or he seems super-professional in his manner, or whatever. Otherwise, you’d never have gone to, or stayed with, someone who puts you into investments you’re clearly not comfortable with.

I’d guess you need a new FA. Their job is two-fold:
(A) Psychological – Listen carefully to the what their client needs and wants. M
(B) Technical – Use their financial expertise to offer financial options that fit the client’s needs established in A.

It’s a feedback loop. If the FA doesn’t get it right the first time, then they should be listening carefully and making modifications pronto. Doesn’t sound like your guy is doing that. Sorry.

I’m in the financial business, so I don’t need an advisor (or don’t feel I do anyway), but I’ve actually been tempted to check out Rich because, as someone else said here, he gets it. You need to find an advisor that you can say that about.

Patient renter in OC

[patientrenter]

LOL, flu. I feel exactly the same way. We’ve evolved to have more brainpower than we need 100% of the time. These political provocateurs are just like oil wells that have gas flairs burning off the excess natural gas, except they’re burning off excess brainpower. Either way, the people next to them end up having to hold their noses!

Patient renter in OC

[Author]

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