Buying a house questions

BHC Vic said:

I think buying houses w conventional 3% loans is not good. Not too hard to get a loan imo. 3% isn't much skin in the game

Click to expand...

I agree, but on a $500K house that is a $2,250 payment with 3% down.. on a $600K house that is $2,700. What are you going to do, default on your house just to go pay more a month in rent? It makes no sense to walk away.

These are not interest only ARMs, these are relatively low interest rate 30 year loans.

LargeOrangeFont said:

I agree, but on a $500K house that is a $2,250 payment with 3% down.. on a $600K house that is $2,700. What are you going to do, default on your house just to go pay more a month in rent? It makes no sense to walk away.

Click to expand...

all I know is I put 20% down on a 400k house and my payment was over 2k. It's gone up since. Our interest in under 4% but we tied solar into it.

BHC Vic said:

all I know is I put 20% down on a 400k house and my payment was over 2k. It's gone up since.

Click to expand...

Dafuq? Are you impounding taxes too? If you are that it why it is extra, and going up.

I put 20% down on $430K and my payment was $1800. Refied and it is just under $1500. I don't impound the taxes monthly.

EDIT: I see that you edited your post and added solar.

When I put 3% down on a 250k house my payment was like 1800 I think.

LargeOrangeFont said:

Dafuq? Are you impounding taxes too? If you are that it why it is extra.

I put 20% down on $430K and my payment was $1800. Refied and it is just under $1500. I don't impound the taxes.

Click to expand...

Yes. I honestly don't know a whole lot about how everything works. My wife handled the solar and refi and all that. I just know monthlys more or less.

BHC Vic said:

Yes. I honestly don't know a whole lot about how everything works. My wife handled the solar and refi and all that. I just know monthlys more or less.

Click to expand...

If you were just paying the payment on a 30 year fixed... the price is the same monthly. Impounds for taxes will change it obviously (a little higher every year), and if you took out a loan on the house for the solar, the payment will go up as well.

LargeOrangeFont said:

If you were just paying the payment on a 30 year fixed... the price is the same monthly. Impounds for taxes will change it obviously (a little higher every year), and if you took out a loan on the house for the solar, the payment will go up as well.

Click to expand...

We used hero. I think we are paying it off this year but like I said momma is in charge 😊

Just another Real Estate thread with all the same information and arguments as all the rest of them..........gosh it gives me a headache. Some of the crap I read on these things is just blasphemy.

Buy a house. Put down what you can afford to in order to get your financing and just live. Prices go up and they go down. We have been in a decades long uptrend in Real Estate, with down periods in that uptrend. If your cool with the payment and your not house poor, then go for it. It really is THAT SIMPLE!!!

I don't know shit about all the details , I jus buy the homes I wanted and have made money on every one of them.
My only suggestion is don't be married to ur mortgage, it is jus a house and there are plenty of them around

That's all I got to say about that [emoji202] [emoji482]

beaverretriever said:

Pardon my ignorance but wouldn't your number equate to around 35,000% total return (rhetorical question)? Most people would be very happy about that investment.

Quote: Business Insider Magazine.
"Remember that 1.3 percent is the real rate of return of the national house-price index between 1975 and 2009."

Click to expand...

No, annual rate of return is 10%.. it's future value of money... if she would have put the same 13k in Berkshire Hathaway she would own half of corona Del Mar... my point was that while it looks awesome on paper it still was a 63 year investment that really did the work. What is really cool is that even though she really only paced the market with her return on investment she got to live at the beach for 63 years! Buy a house that you can afford, don't over think it and understand it's mostly utlility (shelter) that it provides. If it turns out that you can bank some equity you are miles ahead.

mesquito_creek said:

No, annual rate of return is 10%.. it's future value of money... if she would have put the same 13k in Berkshire Hathaway she would own half of corona Del Mar... my point was that while it looks awesome on paper it still was a 63 year investment that really did the work. What is really cool is that even though she really only paced the market with her return on investment she got to live at the beach for 63 years! Buy a house that you can afford, don't over think it and understand it's mostly utlility (shelter) that it provides. If it turns out that you can bank some equity you are miles ahead.

Click to expand...

Still probably one of the only cities in the US that you could buy a single family home on a tiny lot for 10k in the 50s and have it worth 7 mil bucks today. I am trying to think of somewhere else you could do that.

BTW, yes it is a TOTAL ROR of around 35,000%. Here is a simple calculator. I had a surprisingly close guess! http://money.cnn.com/calculator/pf/home-rate-of-return/

beaverretriever said:

Still probably one of the only cities in the US that you could buy a single family home on a tiny lot for 10k in the 50s and have it worth 7 mil bucks today. I am trying to think of somewhere else you could do that.

BTW, yes it is a TOTAL ROR of around 35,000%. Here is a simple calculator. I had a surprisingly close guess! http://money.cnn.com/calculator/pf/home-rate-of-return/

Click to expand...

You are correct in total return, and most people,would be happy with it. I would be happy that I lived at the beach but I would be more happy with other investments in terms of either annual/total returns on my investments over the same time period.

Re-read both my posts where I said "annual" rate of return. Your caculator proves my point. I am not saying that it's a bad thing. The coastline homes in Southern California are probably the only real estate that has paced the stock market. My passive stock market investments over the past 30 year have far out performed the 25 years of various real estate I have owned. But a shelter made from stocks make for shitty living in the rain or heat.

To put it in perspective once again, if she invested 10000 in birkshire Hathaway or any market index over the same time period she would be worth north of 200 million.

At this point I've given up wondering if my house was a good buy. Bought my first house when I was 24 (1994). Sold that one to buy my current house in 2000 for $190K. It was supposed to be a starter house for me and my girlfriend(now wife) but 17 years later I'm still here.

Over the years I refinanced a few times including in 2006 at the height of the market. It appraised for $476K and I pulled every last dollar out of it to buy a business. I also got a small business loan for $2.5 Million and they attached a 3rd to my house. So at one point and time I owed almost $3 million on my house. LOL :yikes

Long story short we currently owe about $330K and it's worth about $430K.

I will add this though, when you start looking at it as a home and not a house your views will change.

GRADS said:

At this point I've given up wondering if my house was a good buy. Bought my first house when I was 24 (1994). Sold that one to buy my current house in 2000 for $190K. It was supposed to be a starter house for me and my girlfriend(now wife) but 17 years later I'm still here.

Over the years I refinanced a few times including in 2006 at the height of the market. It appraised for $476K and I pulled every last dollar out of it to buy a business. I also got a small business loan for $2.5 Million and they attached a 3rd to my house. So at one point and time I owed almost $3 million on my house. LOL :yikes

Long story short we currently owe about $330K and it's worth about $430K.

I will add this though, when you start looking at it as a home and not a house your views will change.

Click to expand...

Sounds like you did fine and have a little equity today which is nice. Not sure what your payments are, but if they are on par or cheaper than if you rented, you are doing ok.

I thought my house would be a starter. It isn't and I'm done worrying about it.

LargeOrangeFont said:

Sounds like you did fine and have a little equity today which is nice. Not sure what your payments are, but if they are on par or cheaper than if you rented, you are doing ok.

I thought my house would be a starter. It isn't and I'm done worrying about it.

Click to expand...

My payment is $1766 and that's with insurance and property tax.

I will also add that at one point and time I paid more for my boat than I did my house. :lmao Neighborhood thought I was crazy....maybe that's why I'm known as "the boat guy" in the neighborhood.

GRADS said:

My payment is $1766 and that's with insurance and property tax.

Click to expand...

Can't argue with that. Not being house poor affords lots of extra fun like Ferraris and boats.

LargeOrangeFont said:

Can't argue with that. Not being house poor affords lots of extra fun like Ferraris and boats.

Click to expand...

Exactly! That's what I've been saying for 17 years. :thumbsup

Bought my first house in 2010 when I was 23. I knew I wouldn't be there forever. Bought in chino and I could live here forever but I know my wife wants a bigger house. In a perfect world next time there's a dip in price I'll have enough cash to put 20% down on a bigger house and I can rent this one. Who knows though

I just read yesterday about a housing shortage predicted in 2018 ... it was in the OC Register ... all about a huge demand for housing but the lowest inventory in 20 years ... so ... regardless ... I'd buy now. Both my daughters just bought house's in Rancho Santa Margarita about 8 months ago at the peak (so we thought) ... both house's like theirs are selling for about $20K to $40K more ... it's crazy. I would make your move. Just my 2 cents.

Bpracing1127 said:

I honestly don't know how you guys says buy now! Home prices in so cal are flat unreal. 500k for a home in garden grove/ or 700k In mission viejo.

Click to expand...

I don't know how young people are doing it. The couple who bought my house in So OC paid 700K and their mortgage is 4K/ month. They are young 20's.

LargeOrangeFont said:

I would not buy my house today, for the price it would sell for, that is for sure. But it is the So Cal game. In another generation, I don't think anyone will even strive to own a home in So Cal. The common practice will be perpetual renting. The only thing people will be able to afford in nicer areas are small condos stacked on top of each other.
Unless you have 0 debt and sizable savings, I don't think that is enough to buy a house and maintain expensive hobbies if you want to live in OC that is anywhere worth living.

Click to expand...

I agree I said the same thing about our house. We thought about staying in OC but the idea of paying over 800K for a fixer and having to pay the taxes on that... No fucking way.

I love California but could not justify the cost (for me) to live there any more. I disliked the house we were in. It was fine when we raised our daughters but once that was done... It was time to move.

Buy the house now... You'll adjust to the mortgage. If you plan to stay in the area and in the house for awhile... You'll be fine.

Mike K said:

I just read yesterday about a housing shortage predicted in 2018 ... it was in the OC Register ... all about a huge demand for housing but the lowest inventory in 20 years ... so ... regardless ... I'd buy now. Both my daughters just bought house's in Rancho Santa Margarita about 8 months ago at the peak (so we thought) ... both house's like theirs are selling for about $20K to $40K more ... it's crazy. I would make your move. Just my 2 cents.

Click to expand...

I believe it. In my neighborhood there have been very few houses for sale. Starter homes like mine go quick and typically for asking or just above. And they also command the most $ per square foot. I can spend another $100k and get a house that is 75% bigger in my neighborhood.

YoPengo said:

I don't know how young people are doing it. The couple who bought my house in So OC paid 700K and their mortgage is 4K/ month. They are young 20's.



I agree I said the same thing about our house. We thought about staying in OC but the idea of paying over 800K for a fixer and having to pay the taxes on that... No fucking way.

I love California but could not justify the cost (for me) to live there any more. I disliked the house we were in. It was fine when we raised our daughters but once that was done... It was time to move.

Buy the house now... You'll adjust to the mortgage. If you plan to stay in the area and in the house for awhile... You'll be fine.

Click to expand...

What is interesting is how they afford a payment like that. I make the most out of my friends and still can't touch something like that. They must be house poor.

A couple things that don't help new buyers or entry level buyers. Is lack of inventory, overpriced areas (oc), and lack of wage stimulation. Right now house inventory is at an all time low and when they do come onto the market they sell almost instantly. I read that the home affordability index in so cal is at 21% which is near the all time low of 19%. Places like NC and AZ are in the 40s that's in real.

I have asked this question before. If you were buying a home right now, could you afford your home today? Second would you buy your home today? This is for today's values not what you paid for it

Bpracing1127 said:

What is interesting is how they afford a payment like that. I make the most out of my friends and still can't touch something like that. They must be house poor.

A couple things that don't help new buyers or entry level buyers. Is lack of inventory, overpriced areas (oc), and lack of wage stimulation. Right now house inventory is at an all time low and when they do come onto the market they sell almost instantly. I read that the home affordability index in so cal is at 21% which is near the all time low of 19%. Places like NC and AZ are in the 40s that's in real.

I have asked this question before. If you were buying a home right now, could you afford your home today? Second would you buy your home today? This is for today's values not what you paid for it

Click to expand...

This just comes down to simple math. If a couple is making $120K+ They can potentially afford that payment on paper. They are probably saving little to nothing in retirement, and if they are leasing BMWs or driving other expensive cars, they are house poor and/or carrying CC debt.

To answer your question, Yes I could afford to buy my home today, I say I would not buy it, but I don't have much of an option unless I wanted to relocate.

Bpracing1127 said:

What is interesting is how they afford a payment like that. I make the most out of my friends and still can't touch something like that. They must be house poor.

A couple things that don't help new buyers or entry level buyers. Is lack of inventory, overpriced areas (oc), and lack of wage stimulation. Right now house inventory is at an all time low and when they do come onto the market they sell almost instantly. I read that the home affordability index in so cal is at 21% which is near the all time low of 19%. Places like NC and AZ are in the 40s that's in real.

I have asked this question before. If you were buying a home right now, could you afford your home today? Second would you buy your home today? This is for today's values not what you paid for it

Click to expand...

We got very lucky w out corona house and made money. That was enough to put down on our chino house and have a decent payment. We bought the corona house for 250k w 3% down. Both my wife and I make decent money. It's how bad do you want things imo. I'm working 350 miles away from my family. Give and take I guess

We got approved. 3.5% down. $440,000 at 3.875% interest. Time to house shop.

No Butt No Putt said:

We got approved. 3.5% down. $440,000 at 3.875% interest. Time to house shop.

Click to expand...

Congratulations. Good luck with the hunt. :thumbup:

No Butt No Putt said:

We got approved. 3.5% down. $440,000 at 3.875% interest. Time to house shop.

Click to expand...

gonna move up by me? ive been looking at whats for sale in east county and its insane. almost need to move out to Campo :grumble:

Wadernation said:

gonna move up by me? ive been looking at whats for sale in east county and its insane. almost need to move out to Campo :grumble:

Click to expand...

No. There's a couple around Lakeside and Santee. We will find something.

YoPengo said:

Congratulations. Good luck with the hunt. :thumbup:

Click to expand...

Thank you.

FHA?

Tamalewagon said:

FHA?

Click to expand...

Yes sir

No Butt No Putt said:

We got approved. 3.5% down. $440,000 at 3.875% interest. Time to house shop.

Click to expand...

Whats your payment at those numbers if you don't mind me asking

Hi Sean...it's going to drive me crazy if I don't at least inform you that we are at 3.625% at zero points with a 700 low mid fico on the $440000 loan amount FHA. 30 day close. At 3.875% we give a $5229 CREDIT to your closing costs. I know you want to go with the other guy but this is a $63 difference per month or $22680 over the life of the loan. Ok...now I'll leave you alone.

Tamalewagon said:

Hi Sean...it's going to drive me crazy if I don't at least inform you that we are at 3.625% at zero points with a 700 low mid fico on the $440000 loan amount FHA. 30 day close. At 3.875% we give a $5229 CREDIT to your closing costs. I know you want to go with the other guy but this is a $63 difference per month or $22680 over the life of the loan. Ok...now I'll leave you alone.

Click to expand...

Working with friends is nice and all, but 22k is still 22k. Great advice and service Mr. Wenhe!

Tamalewagon said:

Hi Sean...it's going to drive me crazy if I don't at least inform you that we are at 3.625% at zero points with a 700 low mid fico on the $440000 loan amount FHA. 30 day close. At 3.875% we give a $5229 CREDIT to your closing costs. I know you want to go with the other guy but this is a $63 difference per month or $22680 over the life of the loan. Ok...now I'll leave you alone.

Click to expand...

Can't beat that. I would have gone with you Scott if I wasn't so deep in when I refi'ed.

OP at this point you are able to use anyone. Scott can get you preapproved quick I'm sure. If your Lender can't beat, match and or credit some closing costs use Scott.

BLOWN HOWARD said:

Whats your payment at those numbers if you don't mind me asking

Click to expand...

$2200

ArizonaKevin said:

Working with friends is nice and all, but 22k is still 22k. Great advice and service Mr. Wenhe!

Click to expand...

I am in real estate as well. We lower our commission for friends always.

With a lender unless they know what they are doing and can match the rest of the industry, what I have found is my buddy the lender is a lot like my buddy the welder.

I have had more inexperienced lenders hold up a deal and cost their friends money.

Tamalewagon said:

Hi Sean...it's going to drive me crazy if I don't at least inform you that we are at 3.625% at zero points with a 700 low mid fico on the $440000 loan amount FHA. 30 day close. At 3.875% we give a $5229 CREDIT to your closing costs. I know you want to go with the other guy but this is a $63 difference per month or $22680 over the life of the loan. Ok...now I'll leave you alone.

Click to expand...

It's 3.875% because I took the $5229 in closing cost. It would have been 3.5% if I had the closing cost money. And no points.

No Butt No Putt said:

$2200

Click to expand...

Impound account and pmi?

Nevermind just pmi right?

Runs2rch said:

Impound account and pmi?

Nevermind just pmi right?

Click to expand...

FHA Loan with pmi.

No Butt No Putt said:

No. There's a couple around Lakeside and Santee. We will find something.

Click to expand...

Same area that my cousin is looking in. Hoping he can find something for $500K and below.

No Butt No Putt said:

$2200

Click to expand...

That's my payment w 20% down on 400k. I have no idea what the variables are but now I'm a little curious. I'll have to ask my wife and then maybe Scott or joe can explain it to me 😜

BHC Vic said:

That's my payment w 20% down on 400k. I have no idea what the variables are but now I'm a little curious. I'll have to ask my wife and then maybe Scott or joe can explain it to me 

Click to expand...

Are your monthly payments including insurance and property taxes?

ArizonaKevin said:

Are your monthly payments including insurance and property taxes?

Click to expand...

His wife pays the bills.

I think he's got some other stuff going on. HERO repayment for solar, and may be impounding tax.

OldSchoolBoats said:

Same area that my cousin is looking in. Hoping he can find something for $500K and below.

Click to expand...

There are some moves houses in this area for $500k - $575k. Too far out of reach for me though.

LargeOrangeFont said:

His wife pays the bills.

I think he's got some other stuff going on. HERO repayment for solar, and may be impounding tax.

Click to expand...

Hero raised it about 200. Gotta be that impounding of tax thing. What's that all about? And yes mama does handle all the bills 😜

BHC Vic said:

Hero raised it about 200. Gotta be that impounding of tax thing. What's that all about? And yes mama does handle all the bills 

Click to expand...

you probably pay 1%+ plus in tax.(some areas are much much higher depending on county and melo roos)

400K house is 4K a year + other little community fees minimum in property tax.

Figure 350+ a month for taxes plus $75 ish a month in insurance.

He will be closer to $2650 a month including everything.

Cole Trickle said:

you probably pay 1%+ plus in tax.(some areas are much much higher depending on county and melo roos)

400K house is 4K a year + other little community fees minimum in property tax.

Figure 350+ a month for taxes plus $75 ish a month in insurance.

He will be closer to $2650 a month including everything.

Click to expand...

yeah, math and stuff

BHC Vic said:

Hero raised it about 200. Gotta be that impounding of tax thing. What's that all about? And yes mama does handle all the bills 

Click to expand...

You can set up your payment to take your property taxes every month. It will normalize your monthly spend. I just pay the taxes out of pocked in December and April myself.

Cole Trickle said:

you probably pay 1%+ plus in tax.(some areas are much much higher depending on county and melo roos)

400K house is 4K a year + other little community fees minimum in property tax.

Figure 350+ a month for taxes plus $75 ish a month in insurance.

He will be closer to $2650 a month including everything.

Click to expand...

Got it. Thank you 😊