[temeculaguy]

Bearish girl, I concur with what ren said, it’s the budget that matter most but there are other less expensive places that exist in SD, they just dont ofer what Temecula does, especially for those with kids. I’m not disputing that some people aren’t unhappy or that some paid too much during the bubble and may take a long time to recover, but that can be true for a lot of areas. Right now, if you do your homework, you can spend about 300k for a 3000 sq ft house built within the last 5 years. Your taxes will be between 4 and 6k because it’s based on purchase price, so for about 2k a month, you can get more than you need and with top notch schools, probably only surpassed by the carlsbad/encinitas or poway districts.

As far as long term investments, Temecula proper is nearly built out, most houses purchased today are almost rent nuetral from day one, I can find rentals that cash flow from day one, no place in S.D. has the same opportunity. What I think you need to do is actually come check it out or get a tour from a local, your impression is from another time and it’s not the same place it once was. I still think there are nicer places in S.D. than where I live, but comparing apples to apples, dollar for dollar, the 270k i spent on my place would run me between 700k and 1 mil to get a comparable feel as far as the physical house and the community it is in, and that wouldn’t allow for the rest of my plan, the rest of my plan is more important than the real estate part of my plan.

I also think the market in most sd areas is still overpriced so it will appreciate less in the coming years. My place was purchased at peak in the 600’s and then they put money into it, losing it two years later as it value fell below half, in my opinion, the air had already be let out, most of sd has yet to lose similar numbers so it will either still do it, or fail to rise because there is a limit as to what people can afford using traditional mortgages. A 300k place in some of the less desirable places you mentioned willhave just as hard of a time getting to 600k as mine will in the future. Because little old falling apart places with rotten schools dont attract young families, migration out is as likely as migration in. Look at these boards, people talk about places within 5 miles of highways 52, 56 or 5, the Temecula Valley is one of the other places that gets people talking about it and moving to it, more so than the east county or south bay, there’s a reason. The reason is that low crime, good schools and low prices is a winning formula. It was the formula for the Santa Clarita valley in the 1980’s and much of S. Orange county in the 1970’s. All of the talk of this place becoming palmdale or vegas after prices crash never materialized. We are a few years into the recession, prices have remained stable with slow upticks since 2008. The local government and the retail is just fine, they are doing better than most other places and much better than San Diego. My guess it’s because of people like ren and scardey, people who are spending between 10 and 20% of their income on housing, it’s not all they could afford, it’s all they were comfortable affording, a whole new paradigm.

[temeculaguy]

Bearish girl, I concur with what ren said, it’s the budget that matter most but there are other less expensive places that exist in SD, they just dont ofer what Temecula does, especially for those with kids. I’m not disputing that some people aren’t unhappy or that some paid too much during the bubble and may take a long time to recover, but that can be true for a lot of areas. Right now, if you do your homework, you can spend about 300k for a 3000 sq ft house built within the last 5 years. Your taxes will be between 4 and 6k because it’s based on purchase price, so for about 2k a month, you can get more than you need and with top notch schools, probably only surpassed by the carlsbad/encinitas or poway districts.

As far as long term investments, Temecula proper is nearly built out, most houses purchased today are almost rent nuetral from day one, I can find rentals that cash flow from day one, no place in S.D. has the same opportunity. What I think you need to do is actually come check it out or get a tour from a local, your impression is from another time and it’s not the same place it once was. I still think there are nicer places in S.D. than where I live, but comparing apples to apples, dollar for dollar, the 270k i spent on my place would run me between 700k and 1 mil to get a comparable feel as far as the physical house and the community it is in, and that wouldn’t allow for the rest of my plan, the rest of my plan is more important than the real estate part of my plan.

I also think the market in most sd areas is still overpriced so it will appreciate less in the coming years. My place was purchased at peak in the 600’s and then they put money into it, losing it two years later as it value fell below half, in my opinion, the air had already be let out, most of sd has yet to lose similar numbers so it will either still do it, or fail to rise because there is a limit as to what people can afford using traditional mortgages. A 300k place in some of the less desirable places you mentioned willhave just as hard of a time getting to 600k as mine will in the future. Because little old falling apart places with rotten schools dont attract young families, migration out is as likely as migration in. Look at these boards, people talk about places within 5 miles of highways 52, 56 or 5, the Temecula Valley is one of the other places that gets people talking about it and moving to it, more so than the east county or south bay, there’s a reason. The reason is that low crime, good schools and low prices is a winning formula. It was the formula for the Santa Clarita valley in the 1980’s and much of S. Orange county in the 1970’s. All of the talk of this place becoming palmdale or vegas after prices crash never materialized. We are a few years into the recession, prices have remained stable with slow upticks since 2008. The local government and the retail is just fine, they are doing better than most other places and much better than San Diego. My guess it’s because of people like ren and scardey, people who are spending between 10 and 20% of their income on housing, it’s not all they could afford, it’s all they were comfortable affording, a whole new paradigm.

[temeculaguy]

Bearish girl, I concur with what ren said, it’s the budget that matter most but there are other less expensive places that exist in SD, they just dont ofer what Temecula does, especially for those with kids. I’m not disputing that some people aren’t unhappy or that some paid too much during the bubble and may take a long time to recover, but that can be true for a lot of areas. Right now, if you do your homework, you can spend about 300k for a 3000 sq ft house built within the last 5 years. Your taxes will be between 4 and 6k because it’s based on purchase price, so for about 2k a month, you can get more than you need and with top notch schools, probably only surpassed by the carlsbad/encinitas or poway districts.

As far as long term investments, Temecula proper is nearly built out, most houses purchased today are almost rent nuetral from day one, I can find rentals that cash flow from day one, no place in S.D. has the same opportunity. What I think you need to do is actually come check it out or get a tour from a local, your impression is from another time and it’s not the same place it once was. I still think there are nicer places in S.D. than where I live, but comparing apples to apples, dollar for dollar, the 270k i spent on my place would run me between 700k and 1 mil to get a comparable feel as far as the physical house and the community it is in, and that wouldn’t allow for the rest of my plan, the rest of my plan is more important than the real estate part of my plan.

I also think the market in most sd areas is still overpriced so it will appreciate less in the coming years. My place was purchased at peak in the 600’s and then they put money into it, losing it two years later as it value fell below half, in my opinion, the air had already be let out, most of sd has yet to lose similar numbers so it will either still do it, or fail to rise because there is a limit as to what people can afford using traditional mortgages. A 300k place in some of the less desirable places you mentioned willhave just as hard of a time getting to 600k as mine will in the future. Because little old falling apart places with rotten schools dont attract young families, migration out is as likely as migration in. Look at these boards, people talk about places within 5 miles of highways 52, 56 or 5, the Temecula Valley is one of the other places that gets people talking about it and moving to it, more so than the east county or south bay, there’s a reason. The reason is that low crime, good schools and low prices is a winning formula. It was the formula for the Santa Clarita valley in the 1980’s and much of S. Orange county in the 1970’s. All of the talk of this place becoming palmdale or vegas after prices crash never materialized. We are a few years into the recession, prices have remained stable with slow upticks since 2008. The local government and the retail is just fine, they are doing better than most other places and much better than San Diego. My guess it’s because of people like ren and scardey, people who are spending between 10 and 20% of their income on housing, it’s not all they could afford, it’s all they were comfortable affording, a whole new paradigm.

[temeculaguy]

Bearish girl, I concur with what ren said, it’s the budget that matter most but there are other less expensive places that exist in SD, they just dont ofer what Temecula does, especially for those with kids. I’m not disputing that some people aren’t unhappy or that some paid too much during the bubble and may take a long time to recover, but that can be true for a lot of areas. Right now, if you do your homework, you can spend about 300k for a 3000 sq ft house built within the last 5 years. Your taxes will be between 4 and 6k because it’s based on purchase price, so for about 2k a month, you can get more than you need and with top notch schools, probably only surpassed by the carlsbad/encinitas or poway districts.

As far as long term investments, Temecula proper is nearly built out, most houses purchased today are almost rent nuetral from day one, I can find rentals that cash flow from day one, no place in S.D. has the same opportunity. What I think you need to do is actually come check it out or get a tour from a local, your impression is from another time and it’s not the same place it once was. I still think there are nicer places in S.D. than where I live, but comparing apples to apples, dollar for dollar, the 270k i spent on my place would run me between 700k and 1 mil to get a comparable feel as far as the physical house and the community it is in, and that wouldn’t allow for the rest of my plan, the rest of my plan is more important than the real estate part of my plan.

I also think the market in most sd areas is still overpriced so it will appreciate less in the coming years. My place was purchased at peak in the 600’s and then they put money into it, losing it two years later as it value fell below half, in my opinion, the air had already be let out, most of sd has yet to lose similar numbers so it will either still do it, or fail to rise because there is a limit as to what people can afford using traditional mortgages. A 300k place in some of the less desirable places you mentioned willhave just as hard of a time getting to 600k as mine will in the future. Because little old falling apart places with rotten schools dont attract young families, migration out is as likely as migration in. Look at these boards, people talk about places within 5 miles of highways 52, 56 or 5, the Temecula Valley is one of the other places that gets people talking about it and moving to it, more so than the east county or south bay, there’s a reason. The reason is that low crime, good schools and low prices is a winning formula. It was the formula for the Santa Clarita valley in the 1980’s and much of S. Orange county in the 1970’s. All of the talk of this place becoming palmdale or vegas after prices crash never materialized. We are a few years into the recession, prices have remained stable with slow upticks since 2008. The local government and the retail is just fine, they are doing better than most other places and much better than San Diego. My guess it’s because of people like ren and scardey, people who are spending between 10 and 20% of their income on housing, it’s not all they could afford, it’s all they were comfortable affording, a whole new paradigm.

[temeculaguy]

here you go walter, here’s a hail may I can get behind.

http://www.redfin.com/CA/Murrieta/41410-Juniper-St-92562/unit-2224/home/6658879

70k, 2br in murrieta, there are 29 listed in that complex under 125. I cant remember if that was the one I was looking at with the cash only litigation but it doesn’t seem to be the case anymore.

In 2005 they paid 285k, it was one of the cheaper ones at 70k but lots in the 90k range are listed.

Need a little more room?

http://www.redfin.com/CA/Murrieta/28589-Via-Las-Flores-92563/home/6176006

115k and you get a garage and a backyard. It’s a little old school and you have to live next to a few thousand bible thumpers at calvary’s college and retreat thing, but they make good neighbors, probably.

You can get loans on these ones, how much fun do you think it will be running the numbers on these? Think of the joy deciding between a 24 or a 36 month mortgage? Just a thought.

[temeculaguy]

here you go walter, here’s a hail may I can get behind.

http://www.redfin.com/CA/Murrieta/41410-Juniper-St-92562/unit-2224/home/6658879

70k, 2br in murrieta, there are 29 listed in that complex under 125. I cant remember if that was the one I was looking at with the cash only litigation but it doesn’t seem to be the case anymore.

In 2005 they paid 285k, it was one of the cheaper ones at 70k but lots in the 90k range are listed.

Need a little more room?

http://www.redfin.com/CA/Murrieta/28589-Via-Las-Flores-92563/home/6176006

115k and you get a garage and a backyard. It’s a little old school and you have to live next to a few thousand bible thumpers at calvary’s college and retreat thing, but they make good neighbors, probably.

You can get loans on these ones, how much fun do you think it will be running the numbers on these? Think of the joy deciding between a 24 or a 36 month mortgage? Just a thought.

[temeculaguy]

here you go walter, here’s a hail may I can get behind.

http://www.redfin.com/CA/Murrieta/41410-Juniper-St-92562/unit-2224/home/6658879

70k, 2br in murrieta, there are 29 listed in that complex under 125. I cant remember if that was the one I was looking at with the cash only litigation but it doesn’t seem to be the case anymore.

In 2005 they paid 285k, it was one of the cheaper ones at 70k but lots in the 90k range are listed.

Need a little more room?

http://www.redfin.com/CA/Murrieta/28589-Via-Las-Flores-92563/home/6176006

115k and you get a garage and a backyard. It’s a little old school and you have to live next to a few thousand bible thumpers at calvary’s college and retreat thing, but they make good neighbors, probably.

You can get loans on these ones, how much fun do you think it will be running the numbers on these? Think of the joy deciding between a 24 or a 36 month mortgage? Just a thought.

[temeculaguy]

here you go walter, here’s a hail may I can get behind.

http://www.redfin.com/CA/Murrieta/41410-Juniper-St-92562/unit-2224/home/6658879

70k, 2br in murrieta, there are 29 listed in that complex under 125. I cant remember if that was the one I was looking at with the cash only litigation but it doesn’t seem to be the case anymore.

In 2005 they paid 285k, it was one of the cheaper ones at 70k but lots in the 90k range are listed.

Need a little more room?

http://www.redfin.com/CA/Murrieta/28589-Via-Las-Flores-92563/home/6176006

115k and you get a garage and a backyard. It’s a little old school and you have to live next to a few thousand bible thumpers at calvary’s college and retreat thing, but they make good neighbors, probably.

You can get loans on these ones, how much fun do you think it will be running the numbers on these? Think of the joy deciding between a 24 or a 36 month mortgage? Just a thought.

[temeculaguy]

here you go walter, here’s a hail may I can get behind.

http://www.redfin.com/CA/Murrieta/41410-Juniper-St-92562/unit-2224/home/6658879

70k, 2br in murrieta, there are 29 listed in that complex under 125. I cant remember if that was the one I was looking at with the cash only litigation but it doesn’t seem to be the case anymore.

In 2005 they paid 285k, it was one of the cheaper ones at 70k but lots in the 90k range are listed.

Need a little more room?

http://www.redfin.com/CA/Murrieta/28589-Via-Las-Flores-92563/home/6176006

115k and you get a garage and a backyard. It’s a little old school and you have to live next to a few thousand bible thumpers at calvary’s college and retreat thing, but they make good neighbors, probably.

You can get loans on these ones, how much fun do you think it will be running the numbers on these? Think of the joy deciding between a 24 or a 36 month mortgage? Just a thought.

[temeculaguy]

2x assets, I’m not down with that formula. What is the price to earnings ratio? I don’t like an all out liquidation for an unfinished house, especially on land, which can have higher carry costs. Plus, accessing all those various sources of credit, they aren’t deductable.

Now if you had a plan to borrow, cheat and steal to cover the full purchase price and needed work to make it livable in a short amount of time (less than 6 months) and then secure a conventional loan to pay back the funding sources and it pencils out to a considerable savings because it required a cash offer due to condition, well that is a plan I can get behind. The trouble with that is the funding sources, in most cases, rich relative is one of the only ones available.

In this market, it’s a huge red flag when something doesn’t sell for a while. One exception is condos with litigation pending, in that case, nobody can get a loan because of the litigation, so the “cash only” designator reduces the buyers pool and the price. With due diligence into the reason for the litigation, you can score a winner on those as a rental, but it’s a play for the more advanced investor.

You want to be a maverick, here’s a plan I amost went with but chickened out. There was a condo complex in litigation built during the boom and chock full of repos and shorts about a year ago, cash only designator. The litigation was for the community pool and it wasn’t something that could get crazy even if the complex lost, about a grand per unit would fix the problem. I could score a 3br for under 100k, all cash, but I only had 50k liquid. I could have done what you mentioned with regards to borrowing against investments and moved in with no mortgage. My income is over 100k, I’d have no mortgage and I could spend the first two years paying back the funding sources I tapped at about 2k a month which would be comparable to mortgages I was considering. So in two years, I’ve recovered from the loans and I own outright. Spend the next two years banking the equivalent of a mortgage, get my downpayment back, go buy a normal house in a normal way and have a cash cow paid off rental in four years. Or just get accustomed to the condo life and never pay a mortgage after just 2 years. That plan works because the amount I would bite off was so small compared to earnings, it’s less than .5x earnings as housing debt, just requires non housing funding sources which are costlier and non deductable but are very short term. It would have required that I leave my current zip code and would have happened during my kid’s high school years, so I decided against it, but it doesn’t make it a bad plan.

Once you free your mind of the concept of “dream house” and latch onto “dream scenario” or “dream payment” a lot more options open up.

[temeculaguy]

2x assets, I’m not down with that formula. What is the price to earnings ratio? I don’t like an all out liquidation for an unfinished house, especially on land, which can have higher carry costs. Plus, accessing all those various sources of credit, they aren’t deductable.

Now if you had a plan to borrow, cheat and steal to cover the full purchase price and needed work to make it livable in a short amount of time (less than 6 months) and then secure a conventional loan to pay back the funding sources and it pencils out to a considerable savings because it required a cash offer due to condition, well that is a plan I can get behind. The trouble with that is the funding sources, in most cases, rich relative is one of the only ones available.

In this market, it’s a huge red flag when something doesn’t sell for a while. One exception is condos with litigation pending, in that case, nobody can get a loan because of the litigation, so the “cash only” designator reduces the buyers pool and the price. With due diligence into the reason for the litigation, you can score a winner on those as a rental, but it’s a play for the more advanced investor.

You want to be a maverick, here’s a plan I amost went with but chickened out. There was a condo complex in litigation built during the boom and chock full of repos and shorts about a year ago, cash only designator. The litigation was for the community pool and it wasn’t something that could get crazy even if the complex lost, about a grand per unit would fix the problem. I could score a 3br for under 100k, all cash, but I only had 50k liquid. I could have done what you mentioned with regards to borrowing against investments and moved in with no mortgage. My income is over 100k, I’d have no mortgage and I could spend the first two years paying back the funding sources I tapped at about 2k a month which would be comparable to mortgages I was considering. So in two years, I’ve recovered from the loans and I own outright. Spend the next two years banking the equivalent of a mortgage, get my downpayment back, go buy a normal house in a normal way and have a cash cow paid off rental in four years. Or just get accustomed to the condo life and never pay a mortgage after just 2 years. That plan works because the amount I would bite off was so small compared to earnings, it’s less than .5x earnings as housing debt, just requires non housing funding sources which are costlier and non deductable but are very short term. It would have required that I leave my current zip code and would have happened during my kid’s high school years, so I decided against it, but it doesn’t make it a bad plan.

Once you free your mind of the concept of “dream house” and latch onto “dream scenario” or “dream payment” a lot more options open up.

[temeculaguy]

2x assets, I’m not down with that formula. What is the price to earnings ratio? I don’t like an all out liquidation for an unfinished house, especially on land, which can have higher carry costs. Plus, accessing all those various sources of credit, they aren’t deductable.

Now if you had a plan to borrow, cheat and steal to cover the full purchase price and needed work to make it livable in a short amount of time (less than 6 months) and then secure a conventional loan to pay back the funding sources and it pencils out to a considerable savings because it required a cash offer due to condition, well that is a plan I can get behind. The trouble with that is the funding sources, in most cases, rich relative is one of the only ones available.

In this market, it’s a huge red flag when something doesn’t sell for a while. One exception is condos with litigation pending, in that case, nobody can get a loan because of the litigation, so the “cash only” designator reduces the buyers pool and the price. With due diligence into the reason for the litigation, you can score a winner on those as a rental, but it’s a play for the more advanced investor.

You want to be a maverick, here’s a plan I amost went with but chickened out. There was a condo complex in litigation built during the boom and chock full of repos and shorts about a year ago, cash only designator. The litigation was for the community pool and it wasn’t something that could get crazy even if the complex lost, about a grand per unit would fix the problem. I could score a 3br for under 100k, all cash, but I only had 50k liquid. I could have done what you mentioned with regards to borrowing against investments and moved in with no mortgage. My income is over 100k, I’d have no mortgage and I could spend the first two years paying back the funding sources I tapped at about 2k a month which would be comparable to mortgages I was considering. So in two years, I’ve recovered from the loans and I own outright. Spend the next two years banking the equivalent of a mortgage, get my downpayment back, go buy a normal house in a normal way and have a cash cow paid off rental in four years. Or just get accustomed to the condo life and never pay a mortgage after just 2 years. That plan works because the amount I would bite off was so small compared to earnings, it’s less than .5x earnings as housing debt, just requires non housing funding sources which are costlier and non deductable but are very short term. It would have required that I leave my current zip code and would have happened during my kid’s high school years, so I decided against it, but it doesn’t make it a bad plan.

Once you free your mind of the concept of “dream house” and latch onto “dream scenario” or “dream payment” a lot more options open up.

[temeculaguy]

2x assets, I’m not down with that formula. What is the price to earnings ratio? I don’t like an all out liquidation for an unfinished house, especially on land, which can have higher carry costs. Plus, accessing all those various sources of credit, they aren’t deductable.

Now if you had a plan to borrow, cheat and steal to cover the full purchase price and needed work to make it livable in a short amount of time (less than 6 months) and then secure a conventional loan to pay back the funding sources and it pencils out to a considerable savings because it required a cash offer due to condition, well that is a plan I can get behind. The trouble with that is the funding sources, in most cases, rich relative is one of the only ones available.

In this market, it’s a huge red flag when something doesn’t sell for a while. One exception is condos with litigation pending, in that case, nobody can get a loan because of the litigation, so the “cash only” designator reduces the buyers pool and the price. With due diligence into the reason for the litigation, you can score a winner on those as a rental, but it’s a play for the more advanced investor.

You want to be a maverick, here’s a plan I amost went with but chickened out. There was a condo complex in litigation built during the boom and chock full of repos and shorts about a year ago, cash only designator. The litigation was for the community pool and it wasn’t something that could get crazy even if the complex lost, about a grand per unit would fix the problem. I could score a 3br for under 100k, all cash, but I only had 50k liquid. I could have done what you mentioned with regards to borrowing against investments and moved in with no mortgage. My income is over 100k, I’d have no mortgage and I could spend the first two years paying back the funding sources I tapped at about 2k a month which would be comparable to mortgages I was considering. So in two years, I’ve recovered from the loans and I own outright. Spend the next two years banking the equivalent of a mortgage, get my downpayment back, go buy a normal house in a normal way and have a cash cow paid off rental in four years. Or just get accustomed to the condo life and never pay a mortgage after just 2 years. That plan works because the amount I would bite off was so small compared to earnings, it’s less than .5x earnings as housing debt, just requires non housing funding sources which are costlier and non deductable but are very short term. It would have required that I leave my current zip code and would have happened during my kid’s high school years, so I decided against it, but it doesn’t make it a bad plan.

Once you free your mind of the concept of “dream house” and latch onto “dream scenario” or “dream payment” a lot more options open up.

[temeculaguy]

2x assets, I’m not down with that formula. What is the price to earnings ratio? I don’t like an all out liquidation for an unfinished house, especially on land, which can have higher carry costs. Plus, accessing all those various sources of credit, they aren’t deductable.

Now if you had a plan to borrow, cheat and steal to cover the full purchase price and needed work to make it livable in a short amount of time (less than 6 months) and then secure a conventional loan to pay back the funding sources and it pencils out to a considerable savings because it required a cash offer due to condition, well that is a plan I can get behind. The trouble with that is the funding sources, in most cases, rich relative is one of the only ones available.

In this market, it’s a huge red flag when something doesn’t sell for a while. One exception is condos with litigation pending, in that case, nobody can get a loan because of the litigation, so the “cash only” designator reduces the buyers pool and the price. With due diligence into the reason for the litigation, you can score a winner on those as a rental, but it’s a play for the more advanced investor.

You want to be a maverick, here’s a plan I amost went with but chickened out. There was a condo complex in litigation built during the boom and chock full of repos and shorts about a year ago, cash only designator. The litigation was for the community pool and it wasn’t something that could get crazy even if the complex lost, about a grand per unit would fix the problem. I could score a 3br for under 100k, all cash, but I only had 50k liquid. I could have done what you mentioned with regards to borrowing against investments and moved in with no mortgage. My income is over 100k, I’d have no mortgage and I could spend the first two years paying back the funding sources I tapped at about 2k a month which would be comparable to mortgages I was considering. So in two years, I’ve recovered from the loans and I own outright. Spend the next two years banking the equivalent of a mortgage, get my downpayment back, go buy a normal house in a normal way and have a cash cow paid off rental in four years. Or just get accustomed to the condo life and never pay a mortgage after just 2 years. That plan works because the amount I would bite off was so small compared to earnings, it’s less than .5x earnings as housing debt, just requires non housing funding sources which are costlier and non deductable but are very short term. It would have required that I leave my current zip code and would have happened during my kid’s high school years, so I decided against it, but it doesn’t make it a bad plan.

Once you free your mind of the concept of “dream house” and latch onto “dream scenario” or “dream payment” a lot more options open up.

[temeculaguy]

Admittedly I’m using info from 1990/1991 because that is when i bought my first house and the fha ceiling was 41%, the default rate back then was steady in the 5-8% rate and had been stable until 2001 when it broke 10% and kept climbing. DTI’s during the recent boom were virtually non existent.

I’m not saying it’s ideal, just that it can be done. FHA loans were not designed for people at the apex of their careers, it was primarily for first timers. I had a 41% dti, but I was like 22 or 23 years old, every year that number went down as my income increased.

And the answer to the question about what happens if there is extended unemployment, divorce, etc, is that you sell the house. No dti can calculate that, you stop working, you stop owning, that is not new, I’m sure of it. The part about raising a family and saving for retirement, people who make 60k gross don’t get to raise families and buy houses on that, plain and simple. That example is for they typical college grad buying a little condo for under 200k. So in my mind, since fha was using that 41% 20 years ago and had a lower default rate, even through boom and bust cycles, the culprit of todays problems isn’t that 41%.

Would I buy today with a 41% dti, hell no! I’m over 40, my earnings are near their peak in my career, I do have kids to send to college, and pay for cars and insurance, etc., etc., etc. so I’m more conservative, but at this point in my life I’m not who that loan is intended for, when I was, it worked, that’s all I’m saying.

I could be wrong on this but I was trying to research the history of dti’s and found that during the boom years of 2005,2006, they were using 59%, so was conventional, if that is true, that is crazy. But then again on a stated income loan, there is no dti, I believe that is the biggest reason things went to pieces.

[Author]

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