Fine article - Why Housing isn't coming back. Or you better like that bag you're holding
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Fine article - Why Housing isn't coming back. Or you better like that bag you're holding
Now reduced to $98,000.Quote:
Originally Posted by grrrr
What he said. There are auctions by the trustee that in LA County are held on the steps of the courthouse and are the step where the Bank typically ends up with the property. As another poster mentioned above, previously the banks would offer what was owed on the loan. Now, housing prices have fallen so far and banks don't want to own property, they are listing new, lower prices right before the auction. My understanding is that at the trustee auction, you get what you get, and therefore all title searches, property condition searches, etc. need to be done prior to handing over the cashiers checks that are required payment for the property.Quote:
Originally Posted by mocwvmit
There are auction houses that are auctioning properties, but this is typically happening once the homes have already been foreclosed on and sold at the above trustee sale and therefore you are buying from the bank. In these I believe, although I don't really know for sure, that most title issues have been worked out.
Some markets are close to hitting bottom, some are a long way from it. It all depends on the local submarket, when they started declining, demand, and the ultimate factor is the jobs situation.
guys - not all auction sales by auction houses offer clear title. Many are "as is, where is". Again, it all depends.
This well may be, but also; not all aution sales by auction houses offer possibly clouded titles either.Quote:
Originally Posted by LeeLau
Today I took pics of soon to be foreclosed/foreclosed homes for a company and filled out the best I could some info. In hindsight most were occupied and most likely are spy pics for the bank. Its a realtors job but went on vacation. Pretty good money for being a depression here.
My estimates.
The house 10 feet from me is in the first phase. I'd reckon it'll be 45 k or less, for the next owner. Commercial double lot, worthless but livable home.
The one up the street I'd say 65k or less, kinda nice place for a person like me, a dump to you .
And a bunch of other nicer stuff and some backwoods shit that would make most feel for their safety. Esp when shit is everywhere , people are around , I roll up , start taking pictures and the mortgage hasnt been paid for 6 months. I was wasnt at that one for long.
Everything but culture, economy, mountaineering, extreem skiing and rock climbing.
WSJ
APRIL 24, 2009, 10:19 A.M. ET
In Real Estate, A New Class of Haves and Have Nots
As bargain sales of distressed homes soar, financially healthy sellers may need to slash prices to compete.
By BRETT ARENDS
Is real estate cheap yet - or is it still expensive?
Maybe it's both.
The latest data from the National Association of Realtors, which rattled nerves on Wall Street this week, showed national home sales are still weak. But they also showed how home sellers nationwide have split into two camps.
Call them "the haves" and the "don't haves." As in: Those who have to sell, and those who don't have to.
The haves are the distressed sales. These include those in foreclosure, and those in pre-foreclosure "short sales." Such sales are now booming - at bargain prices.
On the other hand, those who don't have to sell are often hanging on to 2006 prices. And they are hanging on to their homes.
Prices aren't dropping. And homes aren't selling.
This could be ominous. It suggests - though it does not prove - that another shoe could be about to drop in real estate, as those who don't have to sell realize they need to compete more aggressively with those who do.
The latest housing numbers tell a story.
According to the Realtors, there were 360,000 second-hand (aka "existing") home sales last month. As the headlines noted, that was down about from a year ago, when sales were 375,000.
But remarkably, distressed sales - foreclosures plus short sales -- now account for more than half of all turnover nationwide.The figure was 53% in March.
"This is the first month that has gone over 50%," says Realtors association spokesman Walter Molony. "It was stable for five months at about 45%."
That means March saw about 190,000 forced sales. No wonder prices are in free fall.
A year ago, says Mr. Molony, distressed sales made up just 18% of the 375,000 transactions. That's about 68,000 sales.
In other words, the number of distressed sales has nearly tripled in a year.
That's the good news. That's a market clearing, at last. Distressed sales are taking place at prices at least 20% below the rest, the association says.
On the other hand, look at those who aren't in foreclosure or a short sale. They're selling their homes while still solvent. This used to be called the normal housing market.
Prices haven't come down much. In some premium neighborhoods they have may even be rising.
But the volume of those "normal" sales is down sharply. They make up just 47% of 360,000 second-hand home sales. That's 169,000 transactions.
How little is that?
Even a year ago, when the housing market was already in the tank, these non-distressed sales accounted for 82% of 375,000 second-hand home sales nationwide. Or 308,000 transactions.
It's like the old joke about the man with the million dollar dog ("Well, I haven't sold him yet!").
When a real estate market collapses, volumes die first. Prices fall later. So news that volumes are drying up for non-distressed sales has to be an ominous sign.
Those who live in premium neighborhoods often fancy that they are immune from the slump. "Oh, good quality will hold up," they say. It's true good quality may hold up for awhile. But that doesn't mean anyone's immune.
And over long terms, different real estate markets have to maintain some reasonably persistent connections. Otherwise many people would move to the cheaper neighborhoods.
The trade now -- in theory, at least -- may be to sell the place in an upscale neighborhood like Pacific Heights in San Francisco, if you can, and buy a foreclosure deal out in the 'burbs.
It's probably going to be ugly for a long time in housing, as people who don't have to sell eventually have enough and decide it's time to move, realize they won't be getting out from underwater, and mail in the keys. L-shaped recovery, so on and so forth.
Well, my neighbor just put up their 2 BR 2 1/2 Bath 1500 Sq. Ft. Condo for $430K and it is priced to sell in a month. I'll check back in a month.
Well, my neighbor just put up their 2 BR 2 1/2 Bath 1500 Sq. Ft. Condo for $430K and it is priced to sell in a month. I'll check back in a month. Two others have sold over $400K.
http://s.wsj.net/public/resources/im...0504180217.jpg
WSJ
No Sale: Bank Wrecks New Houses
By MICHAEL CORKERY
A Texas bank is about done demolishing 16 new and partially built houses acquired in Southern California through foreclosure, figuring it was better to knock them down than to try selling them in the depressed housing market.
Guaranty Bank of Austin is wrecking the structures to provide a "safe environment" for neighbors of the abandoned housing tract in Victorville, a high-desert city about 85 miles northeast of Los Angeles, a bank spokesman said.
Victorville city officials said the bank told them the cost of finishing the development would exceed what they could sell the homes for.
The bank also faced escalating city fines as vandals and squatters took over the sprawling housing project, leaving behind graffiti and drug paraphernalia, city officials said.
"It's unfortunate," said George Duran, the city's code-enforcement manager. "We would have hoped for these houses to be finished. But it's up to the owner to see what is best for them."
Home prices in San Bernardino County, where Victorville is located, have fallen 60% from the housing peak in 2006, according to DataQuick, a research firm. The median new-home price in Victorville is $265,990, according to Hanley Wood Market Intelligence, a housing-research firm. Homes in the Victorville development were priced at a range of $280,00 to $350,000 in early 2008, according to Hanley Wood.
Demolishing vacant houses in economically troubled, inner-city neighborhoods is common. But the demolitions in Victorville show how the housing market is weighing on lenders even in once-booming suburbs. The houses were built by a California developer less than two years ago, according to city records.
Guaranty Bank has significant exposure to construction loans to home builders. Last month, its parent company, Guaranty Financial Group, was issued a "cease and desist" order by the federal Office of Thrift Supervision, citing the firm's "unsafe and unsound banking practices."
Many lenders, like Guaranty, have been foreclosing on home builders whose projects have gone bust. Regulators told Guaranty to come up with a plan to dispose of its foreclosed properties. But finding buyers is difficult, as home values remain under pressure.
Guaranty spokesman John Wessman said only four of the 16 structures slated for demolition were "substantially complete," while the others were less than half finished and "exposed to the elements." Guaranty obtained the property through foreclosure in December 2008. The builder, Matthews Homes, couldn't be reached.
A Guaranty official based in California told the Victorville newspaper, the Daily Press, that it would cost more than $1 million to finish developing the property so it could be occupied. Mr. Wessman said that official wasn't authorized to speak to reporters. He said he didn't know how much it would cost to finish the job.
A demolition job of this size would likely cost more than $100,000, according to a person familiar with the matter. A video of the houses being knocked down was posted on YouTube by the founder of a Web site called Vision Victory Manifesto, which has been warning of economic disaster. He declined to give his full name for this story.
Many of the appliances had been stripped out of the houses, according to the demolition company. "I was a little surprised they couldn't come up with an alternative" to demolition, said Ron Willemsen, president of Intravaia Rock & Sand Inc. of Montclair, Calif., which did the demolition.
Mr. Willemsen said he would grind up much of the wood into mulch for landscaping, while some of the lumber would be sent to Mexico for construction there.
Have any of you real estate mavens been reading the blog "It's lovely, I'll take it?"
Pretty funny, but depressing at times due to all the obvious foreclosures.
http://www.lovelylisting.com/
The california section is particularly poignant.
for example:
http://www.lovelylisting.com/2009/03...-paneling.html
http://www.lovelylisting.com/2009/03...f-notepad.html
and here:
http://www.lovelylisting.com/2009/04...pressions.html
edit: oh and this one was a personal fav... what the HELL were these people thinking???!?!
$$ ≠ taste
http://www.lovelylisting.com/2009/03...ntil-last.html
Move on to what? Renting? Nobody who mails in their keys will be getting another mortgage for a long time so what would motivate someone to do that if they don't have to sell? People who don't have to sell will sit on their property for years before they turn in the keys.Quote:
Originally Posted by Bean
After the initial sell off from the people who have to sell, there will probably be a flat line in the market until demand kicks up volume again and then prices will follow. God only knows how long that process will take. Not too long ago most folks lived in the same house for years and some even stayed until they paid the mortgage off so we'll probably see a back to basics type of housing market in the next decade or so.
Quote:
Originally Posted by BeanDip4All
In the late 80's and early 90's there was a constant stream of real estate ads running on the local NYC channel on Sunday morning (I don't know, channel 5 or 9 or sumthin'), and it was a major look into bad taste interiors. The outside and yards looked fine, unless it was Staten Island, but the interiors were major tacky, almost every one. But there wasn't any tagging, I have to admit.
I read somewhere about people realizing that they are several 100K upside down on their house "mailing in the keys" so to speak (even when they are still completely capable of making the payments). They walk from $250K worth of debt and start again. Traditional financing is definitely not going to be an option for them any time soon, but seller financing is one of the ways many deals are being done these days.Quote:
Originally Posted by powder11
This clusterfuck is pretty well out of hand. Lending has seized up so tight that a lot of people that are willing and capable to jump in and start taking these homes back from the banks and make them functional again aren't able to. Fannie/Freddie drew a line in the sand at 4 mortgages per person and everybody has toed the line (they want to sell their loans). So basically anyone who is a professional and experienced at tackling these problems has just been cut off.
I know plenty of seasoned investors and Realtors who'd like to buying up a lot of these messes (and could make them cash flow well), but they can't. It doesn't matter if your credit score is through the roof. It doesn't matter if you have serious assets. It doesn't matter if you put 30% down. There's a line drawn at 4 mortgages and nothing else even gets looked at with regard to the borrower. It's nuts. The banks continue to kill themselves.
Private money and seller financing have been involved on 50% of what I've worked on this year.
Isn't it great what $5 TRILLION in bailouts will buy? Absolutely nothing that benefits anyone but the bankers that lost it in the first place.Quote:
Originally Posted by meatdrink9
"We have to get banks lending again..." The way you do that is by letting prices come down to where lending is profitable, not by giving money to banks and hoping they lend it on overvalued property. This is just the failed doctrine of supply side economics with a different name, and since it's now pushed by a Democrat, no one notices.
When Clinton came into office in 1992?? a very similar housing crisis hit So Cal due to Clinton putting a big halt on military spending. All the big defense contractors folded and left CA. That resulted in foreclosures locally and price depreciation on par with what is happening again on a national level. From beginning to market bottom (1995-96) to getting back to even (1998-99) it took about 6-7 years. This time I am thinking at least 10 years, maybe longer, as the driving force in appreciation from 2002-2006 was liar loans (stated income loans). I just don't know how long it will take wages to get high enough to justify the former prices, when people really have to qualify for a loan. I don't see banks ever bringing back stated income loans like we had from 2002-2006 to juice the process along again.Quote:
Originally Posted by powder11
I remember that well. My dad was in commercial RE devt at the time and took a bath. He never recovered from it financially and that has been one of the key factors in my own tolerance for risk in RE. Never bite off more than you can chew and live within your means. I'm ok with the current state of the market and actually really like the bags I'm holding.Quote:
Originally Posted by liv2ski
I do think lending will come back, but people looking to get stated income loans will be paying a hudge premium. All that being said, people will find a way to make it work as MD9 stated above.
There is still plenty of financing available for first time buyers with shitty credit. Friend of mine who declared bankruptcy in 2004 (he had somehow managed to rack up over 60K in CC debt) just closed on a place last week. FHA loan, 2% down, no PMI. Went through Wells Fargo.
Dang, that was a 50% haircut:eek: It puzzles me that the high end neighborhood I live in has not taken a similar hit. Looks like we are 20% off the 06 top where I live at. I am sure that is because people that pay $1M+ for a house, typically have a big down payment into the deal, that they will not walk away from, unlike ever douche that bought a house for $500k or less with 100% financing. Because of the 0 equity into the deal, it starts with a few mailing the keys in for whatever reason, which exacerbates downward pricing pressure, then more mail in the keys and it just keeps the downward spiral going in a vicious circle due to no money into the deal. Areas that had a lot of 0 down lending done in them are fucked IMO. These areas have gone down the most and the quickest in So Cal. I am puzzled as to whether they will eventually drag down the move up areas too, by an equal percentage?Quote:
Originally Posted by grrrr
FHA loans are 3.5% down and have the most expensive upfront (financed MIP/PMI) plus a monthly expense of .55% of the loan amt divided by 12 months. Fucking expensive mortgage insurance, but they will do deals conventional lenders will not.Quote:
Originally Posted by ass-to-mouth
One scenario I have heard discussed and I have tossed it out to one small bank as a what-if scenario, is if you buy say 10 homes, fix them up, rent them out, then come to the bank and show the leases, income, etc and ask for a conservative 60% LTV that it might fly? Thoughts?Quote:
Originally Posted by meatdrink9
Other than that, yep, the 4 loans per person thing is pretty restrictive. Pretty much everyone I know is having to do it largely on an all cash basis.
In some areas of So Cal prices are down 75% - 80% :eek:. I don't think the higher priced areas are going to fall that far, but they have only just started to fall in the last 6 months. They have a lot further to fall than the 20% they may have fallen to date. There are a lot of alt-A mortgages resetting in the near future and defaults on super jumbo's have risen pretty dramatically. I'm underwater and figure that unfortunately I will be for a while... :frown:Quote:
Originally Posted by liv2ski
Yeah, I don't know what to tell you dood. I didn't believe him either until he showed me the loan docs. 2% down & no PMI. I don't know how he pulled it off, but he did. After all the shit that's gone down the past couple years, deadbeats with crappy credit are still getting loans. Nothing has changed at all. :rolleyes::rolleyes:Quote:
Originally Posted by liv2ski
Seems like that could happen if it was a pretty expensive house and he got the seller to contribute 6% (of which 1.5% was left over after closing/prepaids), and the appraiser came up with 20% instant equity (not that that's likely right now)
I'm pretty disgusted that could happen as well
How old is this buyer? Approx. income (ballpark). Good job? Where? Nice house? How much was the house? (approx.)Quote:
Originally Posted by ass-to-mouth
Quote:
Originally Posted by liv2ski
That's a thought, and the crux. If you do the math, and really think about it, well, I say, never in our lifetimes, yours and mine. Much less mine. By that, I mean, go back to, oh, 2000, to be conservative, although I think the housing bubble started accelerating around '98. Now graft a chart of home prices since then, which is, like, 60 degrees up, on a chart of wages and income during that period that stay flat to a little down. Duh. So, somehow, wages and income have to shoot to the moon to justify even present pricing. That ain't happening with almost 10% unemployment for a year or two, at least. Now, looking at numbers since Raygun got inaugurated, and using the same income to home pricing ratio, well, it seems to be all smoke and mirrors since even then. So, here we are with our auto industry collapsing and our banking industry scrambling around like rats for the last bonus, and we expect things to go back to, ahem, normal by the, ahem, fourth quarter. I don't get it.
It doesn't matter what he told you or what you thought you saw, FHA requires 3.5% down on a purchase in 2009, period. I have been doing those loans since 1984, so ya, I am the fucking expert on this.Quote:
Originally Posted by ass-to-mouth
It looks like he put 2% down because he did put 3.5% down, but 1.5% for MIP was added back on to his base loan amt, resulting in a 98% amount financed.
What you called PMI, FHA calls MIP and what was 1.5%, is now 1.75% of the loan amt added to the loan upfront with .55% paid on the loan balance monthly.
Sorry dood, you talking bullshit and those that speculated that he got out of that because the property appraised with 20% equity is crap, as FHA charges MIP regardless of LTV on a purchase.:FIREdevil
In CA he could have done a Calpers or Calsters loan with 3% down and no mortgage insurance, as the loans are split into an 80% 1st and 17% 2nd. Because this is a conventional loan with a 80% ltv 1st TD, there is no PMI required. I am sure other states have similar products, but FHA is the same nationally.
One real estate company that I follow that i listened in on the quarterly call just bought 1800 lots in CA , riverside area? for less than $10,000 each. So if have cash can get some good deals that will eventually pay off.
Now this company is losing money but its mostly from righting off options and some value in land.
sweet ram-jam smackdown!Quote:
Originally Posted by liv2ski
ya but if he got the house at 20% below what its worth, he can call them the next day and get it dropped couldnt he? 20% below, i find hard to believe either way thats what he got the house for.Quote:
as FHA charges MIP regardless of LTV on a purchase.
And yes, FHA requires 3.5% now and it was 3% last year. Id know, i just bought a house in december (3% down) and and my brother in law finally closed on his today. (3.5% down) Both on fha loans.
2% isnt FHA. And most lenders require you to pay pmi on anything under 20% down dont they? Regardless of if its fha or not.
Because when you make your offer, they show you the title from the title company. They are required to disclose any back taxes, etc. You sign paperwork saying you made sure that there isnt any leins, etc. Thats what your real estate agent is for as well. She checks all that out when you go to make an offer. Even if you win the auction, im assuming its got contingencies like any other purchase. if it doesnt inspect, you cant get a loan, etc, you can walk.Quote:
Originally Posted by Benny Profane
^^^ Wrong:
At a trustee auction on the steps of the courthouse, its called buy as is. They tell you the house, you bid, if you win, you hand over cashiers check and congrats, you own the house and anything lovely that comes with it.
The auctions held by auction companies as I believe Lee said somewhere in this monster thread, vary. Some may let you make the offer contingent on title, etc., others not so much.
Interesting. I thought "as is" was more structural, etc. A quick google finds you are correct. it also pretty much says unless you are a real estate pro, dont do it.Quote:
Originally Posted by comish
Quote:
Financing auctioned properties is prohibited so you must pay cash, and to make matters worse, you're not permitted to get title insurance. Remember that the home's previous owner was unable to cover their mortgage, so there is a chance that they may also have a defaulted on their property taxes. If the property carries a tax lien, the new owner will have to pay it off. There are usually pros at these auctions, and they're best left to the pros: With all the potential pitfalls of an auction, exercise extreme caution unless you're a real estate mogul who can afford a mistake or two.
So where did your prior post come from, Cramer? A dream? I figured there was some statute in California requiring trustees to bring title reports to trustee's sales.
As someone who conducts trustee's sales in Utah on an increasingly frequent basis, usually if the property has not been sold by the debtor prior to the sale, it is worth less than the bank is owed, and the bank is going to bid the lesser of FMV (as established by a conservative appraisal) or what it is owed. Also, there will usually be property tax liens, and if it is new construction, mechanics' liens. Fortunately, in Summit County, it is free and easy to search the title on real property so you can figure out what the tax liens are.
Just when you thought this couldn't be handled any worse...
http://www.ibtimes.com/articles/2009...policy_all.htm
I've become numb a long time ago ... but seeing these programs and "solutions" one after the other is simply.... I don't have words. Just enjoy - last week we mentioned how some states had created a work around to use the tax REBATE (i.e. AFTER you buy the home you get the handout) as a substitute for a down payment and closing costs [ May 8: Minyanville - Subprime Lending is Back with a Vengeance ]
In an effort to boost home buying -- even for marginally qualified borrowers -- a number of states are finding creative ways to advance the tax credit to buyers on the day they get their new keys , r ather than having to wait for next year's refund check. This allows buyers to pay for things like closing costs, mortgage points - or even the down payment.
Well folks - it did not take long... the early results of letting people who cannot even find enough money to put 3.5% down into the housing market must of been spectacular. Because in just the blink of an eye this "adjustment" to what Congress originally approved, has now become the federal standard .
(May 12, 2009) Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a downpayment .
Secretary Donovan said that important changes, which the National Association of Realtors(R) has been calling for , will help consumers purchase a home. "We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a downpayment ," Donovan said. According to Donovan, the FHA's approved lenders will be permitted to "monetize" the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.
This is the same FHA we posted last week would cause the next housing bust [ May 6: WSJ - FHA Loans, the Next Housing Bust ]
Last year banks issued $180 billion of new mortgages insured by the FHA, which means they carry a 100% taxpayer guarantee . Many of these have the same characteristics as subprime loans: low downpayment requirements, high-risk borrowers, and in many cases shady mortgage originators. FHA now insures nearly one of every three new mortgages, up from 2% in 2006 .
... taxpayer losses are mounting on its $562 billion portfolio . According to Mortgage Bankers Association data, more than one in eight FHA loans is now delinquent -- nearly triple the rate on conventional, nonsubprime loan portfolios . Another 7.5% of recent FHA loans are in "serious delinquency, " which means at least three months overdue.
Because FHA also allows borrowers to finance closing costs and other fees as part of the mortgage, the purchaser's equity can be very close to zero .
So let's wrap this up and put a bow on it. Effectively the US government is going to allow people with "3.5% down" (now covered by the tax payers gift of $8000) to enter into agreements of sub 5% mortgage rates, to FICO scores as low as 620. As long as its your first home. Closing costs? Remembers the FHA allows people to finance that... you don't need to have it on you.
To put that in perspective this means, based on the median home price in America - about 70% of homes are now available to home buyers for less upfront than a rental. In a rental you at least need to save enough to put down a security deposit. Under this innovative program (that was not the original intent of the legislation) $8000 can finance 3.5% down on up to a $228,000 home. Anyone who can make the monthly payments from there now is welcome to join the home ownership class. Or if you really don't care about your 620, 630 FICO score you can basically get into one of these homes, not make a single payment and live rent free from 12-18 months before they get around to foreclosing on you (which many banks are dragging their feet on).
And if the home value goes down even 1% and you find yourself immediately underwater? You walk away and send the keys to the US taxpayer - we're going to pay for it on the back end as well as the front end.
This is what was done in the auto industry - it's called pulling forward demand with greater and greater incentives (0% interest rates for multiple years, $4K, $5K, $6K rebates). Now we pulled almost all natural demand for home buyers that should of been arriving in 2008-2009 into 2006-2007. So you have to create an even stronger drug when you can rustle up enough home buyers. And here we are.... and when home data "drops at a slower rate than the previous period" we can rally on "2 nd derivative improvement"... failing to mention whom is bearing the costs for that improvement .
Am I surprised? No. It's all Groundhog Day at this point - each program begins to sound like the other. Common theme is taxpayer handouts and taxpayers bearing risk - Kick the Can policies. In my predictions piece for 2009 I wrote things would get so desperate... err, correction - I wrote green shoots would be so plentiful that:
But larger than that - my prediction is Fannie/Freddie and then above and beyond that, for people who do not have 20% down and won't pay for insurance, the FHA - will wage a war against current mortgages. We'll see interest rate buydowns , we'll see principal reductions, we'll see anything and everything that basically gives a big (bleep) you to people who have been honoring the system. In return we will tell those people, well if your neighbor's house goes into foreclosure we will all suffer, so it's a necessary evil.
By the back half of 2009, refinancing will reach levels (and above) seen in the bubble years of 2005-2006. Obama & Co will also come up with myriad plans for buyers to suck up excess inventory - the government will be our partner . Nothing should surprise you - this will be an all out assault - we are already seeing the first inane ideas such as no appraisal refinances. The "private" mortgage industry will be almost completely crowded out as no one can compete with what the government will offer.
Mission Accomplished
Acronyms really make me horny.Quote:
Originally Posted by liv2ski
Bingo! Home Ownership and the speculative appreciation is gone except in only the most highly desirable and unique locations. People just don't get it...our country is borrowing to get us back....back to what? Back to where? Refinancing and buying shit we don't need? So we get back to the point of dumb lending practices, and then it all crashes down again? Its an endless loop.Quote:
So let's wrap this up and put a bow on it. Effectively the US government is going to allow people with "3.5% down" (now covered by the tax payers gift of $8000) to enter into agreements of sub 5% mortgage rates, to FICO scores as low as 620. As long as its your first home. Closing costs? Remembers the FHA allows people to finance that... you don't need to have it on you.
Currently, I live in a 1000 sqft apartment in a nice part of San Francisco. Our little guy is on the move and should be walking soon....we need a at least another bedroom. I'm starting the process of getting pre-approved for loans, and getting ready to place our place on the market. We're lucky in that the past year of comps show that sales of units in and around our apartment have sold at or just below list. We'll lose some equity on the sale, but make it up on the other side. I'll keep you posted....if its rough in SF, its going to be worse almost everywhere else. :)
What's the deal with investment property loans? % down, rates, so on and so forth? Are there any provisions for deciding to make an investment property into a primary residence?
Rates are generally 3/4% higher than what you would get for your primary home. 20-25% down, 6 month reserve - if you own any real estate, you must qualify for all mortgage debt payments regardless of rental income.Quote:
Originally Posted by Bean
there are no ramifications to moving into your rental.
I am in Denver, so pm me for more info.