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temeculaguy
ParticipantKelly, nice article as always and thanks for dropping in on amatuer hour. I think you are going to have a fun year reporting on this as things unfold, it will be interesting to look back on your older articles exposing the cracks in the armor once this snowball hits full speed.
ParticipantKelly, nice article as always and thanks for dropping in on amatuer hour. I think you are going to have a fun year reporting on this as things unfold, it will be interesting to look back on your older articles exposing the cracks in the armor once this snowball hits full speed.
ParticipantAt this point there’s no reason to get mad, be thankful they paved the way for you. If all the 2/28 and toxic 0 down borrowers hadn’t caused the run up, the builders wouldn’t have added so much inventory that will soon be vacant. Like a hermit crab, look at all the pretty shells you will have to choose from. Had things leveled off in 2003 they would be taking off again now and there would be less inventory to choose from. You had all those years to prepare and save. I haven’t had to bust out any Lao Tzu for weeks but you forced me, “There is beauty in life’s disorder.” Some guy just ordered a bunch of Pizzas and couldn’t pay for them, rather be angry about how his large order delayed yours, offer the pizza guy half the price to take it off his hands.
ParticipantAt this point there’s no reason to get mad, be thankful they paved the way for you. If all the 2/28 and toxic 0 down borrowers hadn’t caused the run up, the builders wouldn’t have added so much inventory that will soon be vacant. Like a hermit crab, look at all the pretty shells you will have to choose from. Had things leveled off in 2003 they would be taking off again now and there would be less inventory to choose from. You had all those years to prepare and save. I haven’t had to bust out any Lao Tzu for weeks but you forced me, “There is beauty in life’s disorder.” Some guy just ordered a bunch of Pizzas and couldn’t pay for them, rather be angry about how his large order delayed yours, offer the pizza guy half the price to take it off his hands.
ParticipantAt this point there’s no reason to get mad, be thankful they paved the way for you. If all the 2/28 and toxic 0 down borrowers hadn’t caused the run up, the builders wouldn’t have added so much inventory that will soon be vacant. Like a hermit crab, look at all the pretty shells you will have to choose from. Had things leveled off in 2003 they would be taking off again now and there would be less inventory to choose from. You had all those years to prepare and save. I haven’t had to bust out any Lao Tzu for weeks but you forced me, “There is beauty in life’s disorder.” Some guy just ordered a bunch of Pizzas and couldn’t pay for them, rather be angry about how his large order delayed yours, offer the pizza guy half the price to take it off his hands.
ParticipantJES, your budget was pretty tight yet you still managed to hit the average american savings rate. You did have an IO loan so you really couln’t afford it even on your spartan budget. The only reason it worked was an appreciating market, now htat is no longer a near term option would anyone take the same risk. What you did was a risk because had you timed it wrong you would have had your loan reset and would have to handle the fully amortized rate, which would have sunk you.
ParticipantJES, your budget was pretty tight yet you still managed to hit the average american savings rate. You did have an IO loan so you really couln’t afford it even on your spartan budget. The only reason it worked was an appreciating market, now htat is no longer a near term option would anyone take the same risk. What you did was a risk because had you timed it wrong you would have had your loan reset and would have to handle the fully amortized rate, which would have sunk you.
ParticipantJES, your budget was pretty tight yet you still managed to hit the average american savings rate. You did have an IO loan so you really couln’t afford it even on your spartan budget. The only reason it worked was an appreciating market, now htat is no longer a near term option would anyone take the same risk. What you did was a risk because had you timed it wrong you would have had your loan reset and would have to handle the fully amortized rate, which would have sunk you.
Participant400k is not affordable with nothing down on 90k gross with four people to feed and put into vehicles. 3x income is a ceiling of loan affordability and that is a stretch for the early years. 270k loan and they should have made it work, they paid twice that and are suprised that it didn’t work out. I can’t believe they didn’t realize the taxes would be raised based on the purchase price. On 90k gross their take home is about 4-5k a month after health insurance, minimal 401k, etc. And their interest only payment for two years would be 3800/mo. before it resets. Even if they didn’t have the new tax rate it was 3200, how do you buy a house where you can’t afford the temporary teaser rate. When I made 90k gross I bought a house for 200k and money was tight for a few years.
These stories are becoming so common and every person in this situation has friends, relatives and co-workers that know their story, what is that going to to do the buyer psyche even when prices get in line with rent. Joe six pack isn’t going to understand the details and why it happened they will just equate R/E with financial ruin.
Participant400k is not affordable with nothing down on 90k gross with four people to feed and put into vehicles. 3x income is a ceiling of loan affordability and that is a stretch for the early years. 270k loan and they should have made it work, they paid twice that and are suprised that it didn’t work out. I can’t believe they didn’t realize the taxes would be raised based on the purchase price. On 90k gross their take home is about 4-5k a month after health insurance, minimal 401k, etc. And their interest only payment for two years would be 3800/mo. before it resets. Even if they didn’t have the new tax rate it was 3200, how do you buy a house where you can’t afford the temporary teaser rate. When I made 90k gross I bought a house for 200k and money was tight for a few years.
These stories are becoming so common and every person in this situation has friends, relatives and co-workers that know their story, what is that going to to do the buyer psyche even when prices get in line with rent. Joe six pack isn’t going to understand the details and why it happened they will just equate R/E with financial ruin.
Participant400k is not affordable with nothing down on 90k gross with four people to feed and put into vehicles. 3x income is a ceiling of loan affordability and that is a stretch for the early years. 270k loan and they should have made it work, they paid twice that and are suprised that it didn’t work out. I can’t believe they didn’t realize the taxes would be raised based on the purchase price. On 90k gross their take home is about 4-5k a month after health insurance, minimal 401k, etc. And their interest only payment for two years would be 3800/mo. before it resets. Even if they didn’t have the new tax rate it was 3200, how do you buy a house where you can’t afford the temporary teaser rate. When I made 90k gross I bought a house for 200k and money was tight for a few years.
These stories are becoming so common and every person in this situation has friends, relatives and co-workers that know their story, what is that going to to do the buyer psyche even when prices get in line with rent. Joe six pack isn’t going to understand the details and why it happened they will just equate R/E with financial ruin.
ParticipantCan you blame him for eyeing some of the troubled companies, he isn’t called the oracle because he got lucky once, there is money to be made in a downturn. It seems almost logical that buying a motgage company or a builder while it is cheap and everyone else is running away, change the business model, learn from the mistakes and emerge on the other side of the cycle. There is a reason thousands of people trust their money to Buffet and people watch his moves, nobody watches my moves for good reason.
I have to second what bob said about Wells Fargo, not sure about B of A but if a bunch of lenders go under, eventually the survivors will pick up market share. Things don’t go up forever and they won’t go down forever, it’s a little dicey right now because the smoke isn’t anywhere near settling but when it does, there will still be banks.
ParticipantCan you blame him for eyeing some of the troubled companies, he isn’t called the oracle because he got lucky once, there is money to be made in a downturn. It seems almost logical that buying a motgage company or a builder while it is cheap and everyone else is running away, change the business model, learn from the mistakes and emerge on the other side of the cycle. There is a reason thousands of people trust their money to Buffet and people watch his moves, nobody watches my moves for good reason.
I have to second what bob said about Wells Fargo, not sure about B of A but if a bunch of lenders go under, eventually the survivors will pick up market share. Things don’t go up forever and they won’t go down forever, it’s a little dicey right now because the smoke isn’t anywhere near settling but when it does, there will still be banks.
ParticipantCan you blame him for eyeing some of the troubled companies, he isn’t called the oracle because he got lucky once, there is money to be made in a downturn. It seems almost logical that buying a motgage company or a builder while it is cheap and everyone else is running away, change the business model, learn from the mistakes and emerge on the other side of the cycle. There is a reason thousands of people trust their money to Buffet and people watch his moves, nobody watches my moves for good reason.
I have to second what bob said about Wells Fargo, not sure about B of A but if a bunch of lenders go under, eventually the survivors will pick up market share. Things don’t go up forever and they won’t go down forever, it’s a little dicey right now because the smoke isn’t anywhere near settling but when it does, there will still be banks.
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