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I get a lot conflicting information on how to raise your credit scores. I made a down payment on a car with my rewards cards. I don’t think it made a difference with my credit score. I like the idea of paying off your car loan with a rewards card as long as you pay off the balance at the end of the billing period. Make sure your card does not charge you anything and also the auto loan company does not charge you for using a credit card. You can qualify for a larger home loan if you have less monthly obligations.

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“They sent a black guy. I’m black,” Cunningham said. “He said he was a Christian. I’m a Christian.”

This has got to be the most pathetic part of this whole story.
My wife was in her last year of her RN program. So she met this fellow student who wanted to talk to her about some investment in real estate, real estate sales and lending commission type pyramid thing. Anyway my wife is Filipino, the couple that came over with this pyramid thing was Filipino, my wife is catholic and so were they. How stupid or blind would I have been to ignore the facts just because these people were of the same race and religion as my wife. They couldn’t even answer half of my questions. They wanted something like $5,000 to join this thing. Of course I was polite since this was my wife’s friend. I believe the scam in Temecula involves Filipino Nurses. I’m pretty sure they were Catholic also.
I’m sorry but these people need to stop using excusses.

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It sounds like this poor lady got scammed. The worst part is she got scammed because she was desperate and not greedy. Most scams are done on greed. A deal is too good to pass up and you get scammed. This poor lady was just desperate and dumb. If she actually got cash out during her refi/scam, then I’m the bigger fool for getting scammed into feeling sorry for her.

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Offer 300K. She won’t go for it, so what would you have to loose. Don’t offer anymore than 300K, because prices are going to come down anyways. If you like the property and can afford the 300k, it’s sounds like a win/win situation. If she does go for it, list it immediately for $430K, if it sells pocket the money and rent for another couple of years and buy again for $300k or less.

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Sorry, but I don’t get the trade up scenario. Say you buy a condo at the bottom (good luck calling the bottom though). Then it appreciates and you walk away with $200k in profit. Then you go to buy your dream home. Well, guess what, while your condo was appreciating your dream home was appreciating too, and maybe even at a faster rate than your condo.

You are 100% correct. I don’t understand why people think that it easy to trade up with appreciation. If your condo goes up $100k, your dream home goes up 200K. OK you have $100k to put down, but you’re still going to borrow a $100k more then if you purchased the dream home from the beginning. The key to my statement earlier was to “pay down” the mortgages. This may take 5 or 10years, but as long as appreciation doesn’t get out of hand, you can trade up. I was also assuming that a buyer can almost afford the dream home, but can take the financially safer route of purchasing two lessor older homes for $500k each and eventually trade up for lets say a $1,000,000 dollar home. Your rental income in most cases should cover insurance, taxes, interest. Basically the cost of the two properties should come out to about the same, and you can use the rental income to pay down the mortgages. But like I said the key is to pay down the mortgages. You can also accomplish the same thing by renting and saving money for a large down payment, but you can be leveraged out if appreciation goes up.

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My in-laws just sold their home. It took about 4 months to sell. They took it off the market at one time. When they put it back on the market it only took 2 weeks to get an offer. I think the price was more appropriate when they put it back on the market. The couple that bought the home got an 80/20 loan. They also negotiated seller to cover closing cost. My in-laws did not want to pay the closing cost, so buyer offered more for the purchase to cover the closing cost. This makes me believe that they didn’t have any down payment, including closing cost. I told my in-laws we could probably buy their home back in a couple of years for a $100k less.

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Try option 6. Wait for the bubble to burst, buy at the bottom. Then buy dream house if you can afford it or buy two lower priced homes, rent one out, pay down mortgages. Sell both homes and buy dream house. Or option 7, which is renting both homes and buying dream house. This is something I’m currently doing. I’m just waiting for the bubble burst to complete option 6 or 7.

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Their website actually is showing from the high 600’s. They probably just changed the pricing. Good luck with the purchase. You might want to wait for any incentives or bring a real estate agent willing to give you a kickback on the the sales commission.

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Owning a home is like renting with a twist. Renters rent from landlords. Home owners rent from the bank. Renters rent forever. Home owners/renters rent-to-own. Some home owners just chose to rent longer. Some home owners chose to rent more then they can afford. Some home owners lose their rent-to-own privileges when they can’t pay the higher rent due to toxic rent. Personally I like the rent-to-own variety.

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You noted, properly, that making the comparison for a single year ignored some important benefits of ownership (including steady mortgage payments versus rent payments that are likely to increase). However, with a current rental cost of $24,000 per year and a true after-tax ownership cost in the neighborhood of $40,000 per year for the case above, the rental case generates very substantial cash savings from the start.

You make a great point about rents increaseing while mortgage payments remaining the same (if you get a traditional 30yr fixed rate loan). Although you would initially pay more for mortgage payments, taxes and insurance at some point the cost will be the same, and towards the later part of your 30 years you would be paying less then rent. We would have to speculate on rent increases to come up with the exact dollar amount, but in this basic scenario it would be something to think about. For those fortunate buyers that purchased homes 2002 and prior, their payments may already be equal to or lessor then current rent for the same home. In today’s prices it may take longer then 5 years to get to break even point, but it will still happen within the loan term.

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“Two years ago, when Lewis was looking for a larger house, she easily prequalified for a nearly $700,000 house even though she had no down payment and a spotty credit record. It helped that she was willing to take on two loans to cover 100% of the cost…….I wasn’t completely aware of the mortgage terms but I knew it would adjust in two years,” she said. “Properties were still going up at the time, so I felt it might be a good time for me to buy.”

She was gambling on appreciation and didn’t care about the mortgage terms. She is just too intelligent to accept her role and is just looking to blame anyone else. The montly payment increased by $2,000 and she can’t afford it. That just shows how overextended she already was.

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Does anyone know at what point/income does your tax rate go up to 28%.
Thanks for any answers in advance.

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5-10% percent annually until finally reaching late 2002, early 2003 prices. This will be for any area resale home. New homes purchased in 2002/2003 may have been contracted 3-12 months earlier and therefore may not reflect actual pricing on purchase date. That’s why new downtown condos were selling for a 20% profit after 3 months from original purchase date during 2004.
Predicted 3000 sq ft(newer)home prices after decline:
Carmel Valley $650,000 (with small lot/6500sqft)
Carmel Valley $750,000 (with larger lot/10000+sqft)
Chula Vista $500,000-$600,000
Escondido $400,000-$500,000
San Marcos $400,000-$500,000
Valley Center $400,000-$600,000 (depending on lot/acres)

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Here’s the cars that people in SD bought in 2006:

Note: 1,121 Toyota Highlanders vs. 1,586 Lexus RX350s
(Same Toyota platform on both)

Additional cost per car is approx $10,000

Total = Almost $16 million extra in ‘Lexus Factor’

“Lexus factor” great find. Got to give you credit for this one.
I have to admit it we couldn’t resist the Lexus factor. My wife drives a 2001 Lexus RX300, we bought it used in 2003 and from a private party. Dealer wanted at least $4k more then we paid with same mileage. She loves it, and we are not planing on buying another car for at least 5 years.

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The “latte factor” does go a long ways towards savings. It’s not just going out for dinner or buying clothes. It’s a way of life and of saving. Everyone has a latte factor, it’s what we do about it that counts. I love cars, electronics and Starbucks, but I limit myself. By limitting
your everyday purchases you can save more then you think. Sometimes I think about how anal I am about saving money, but at the end of the month it’s nice to you I still have money left over. I would consider my wife and I to be in the upper middle class, but we still spend like we did last year before she graduated from the RN program and started working as a nurse. We go out all the time, but we use coupons. She still cuts my hair. I do my own lawn and home maintanence. We buy clothes at Walmart(clearance rack) or at least I do. Our cars are paid off and we have no credit debt. Maybe that designer shirt and pants only sets you back $200, so you put it on your credit card and decide to only make the minimal payment. That shirt and pants will end up costing you more then the original $200. Lets say you put all you latte factors on your credit card. Now a year has gone by, and your outstanding balance is $20,000 and you can only afford the minimun payment. Your interest rate goes up to 18%, your rent increases by $100, gas continues to go up, and Starbucks raises it’s lattes by $.35, What are you going to do? I tell you what I would do, I would call my mommy and ask for a loan that I possible couldn’t pay off.

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