Real Estate Crash thread

[skiballs]

I thought Vancouver had the market cornered on way overpriced crackshacks.

http://www.crackshackormansion.com/index.html

That's some funny shit.

[Kevo]

I knew Arvada and Superior glowed in the dark but never heard Westminster had any problems. There was a long article in the Camera last year about this and the new parkway.
Found it;
http://www.dailycamera.com/ci_19995436

Yep, apparently things blew generally SE. Besides the several large plutonium fires and spills that happened there, apparently they used to burn plutonium waste in an incinerator, which just turned it into particulates and dropped it on nearby neighborhoods. http://www.npr.org/2012/06/12/154839...os-rocky-flats

Here's a map showing radiation levels. Plutonium has a 24,000 year half life, so apparently not much has changed as far as radiation levels go.

[cramer]

Because cramer said that was a bad idea. And he has bought a house, although it doesn't have a pool, so I would heed his advice.

Actually i would have heeded my advice when i first chimed in on this thread back in 2008. The government was handing out interest free loans and the next year free money for a down payment.

[Benny Profane]

OK, now, stop and think. What's going to happen to the value of your palace when the cheap and free money ends?

[liv2ski]

^^^^And when will that happen? I see the Fed printing money and buying Treasuries to infinity. It will be the new normal. USD gets punked, inflation goes bonkers (well maybe the guberment will admit to inflation at some point) and hard assets (Real Estate) will climb in value based on worthless currency.
Does anyone really think the Fed and Guberment will get their fiscal shit together?

[Benny Profane]

Well, interest rates may not go up radically, but, from what I understand, the CFPB has written and will write new rules making it much harder for the average schmoe to borrow big bucks with no substantial income or assets.

[MontuckyFried]

Well, interest rates may not go up radically, but, from what I understand, the CFPB has written and will write new rules making it much harder for the average schmoe to borrow big bucks with no substantial income or assets.

Heck, even WITH good income and assets, it's become pretty dang hard to get lending (see: some of my rants way earlier in the thread). I was shocked. If cash investors start slowing down, I have a feeling the market's got more room to go back down. Again...so glad I have the equity I do right off the bat. That bought me a lot of freedom.

[Kevo]

Heck, even WITH good income and assets, it's become pretty dang hard to get lending (see: some of my rants way earlier in the thread). I was shocked. If cash investors start slowing down, I have a feeling the market's got more room to go back down. Again...so glad I have the equity I do right off the bat. That bought me a lot of freedom.

Wasn't the issue that some idiots didn't think that your well documented self employment income was good enough?

[grrrr]

I talked to a mortgage broker the other day. I was surprised how easy it would be for me to get more money than I feel would be prudent.

[mud]

Wasn't the issue that some idiots didn't think that your well documented self employment income was good enough?

I talked to a mortgage broker the other day. I was surprised how easy it would be for me to get more money than I feel would be prudent.

Most lenders limit how much you can borrow based on your Debt to Income Ratios which is capped at 45%.

The broker/underwriter will take your last two year tax returns and divide by 24 to get your monthly income then they take all your monthly credit card and/or car payments, student loans or other lines of credit that show up on your credit report and divide by your monthly income.

If your monthly debt payments including the total estimated mortgage payment (including taxes, insurance, MI) are below 45% of your monthly income you qualify for a mortgage.

[MontuckyFried]

Wasn't the issue that some idiots didn't think that your well documented self employment income was good enough?

That was just PART of my troubles. I was better than just self-employed. I was a regular W-2 employee under my own company for 7 years with no breaks. They gave me a ton of grief for that. Wife has been employed as teacher for over 7 years. We had zero debt (not even an existing mortgage), were throwing 20% down, had plenty of assets, both of us had super bad-ass credit, and I can go on and on. Yet the lender (USAA, but ultimately FNMA behind the scenes) gave us grief every step of the way. Underwriters kept kicking back the appraisal saying it was too high, even though the house was an insanely good deal. Underwriters kept pulling new requirements out of their asses every time I thought I was done.

I talked to a mortgage broker the other day. I was surprised how easy it would be for me to get more money than I feel would be prudent.

Yeah, the mortgage broker is probably kinda full of crap and wants your business more than anything. Getting pre-approved is one thing. Getting final approval to close on a house is an entirely different can of worms as I learned. USAA pre-approved me for WAY more than the home I purchased. They said a pre-approval was pretty solid and I should have nothing to worry about. THEN once I gave them the contract, that's when the BS started with the retard underwriters. Remember, mortgage brokers and loan processors are at the mercy of the underwriters in the end. Not fun.

[Danno]

That's pretty weird, I had no issues with my refinance a year ago, no BS from underwriters or anything.

[concretejungle]

No problems here buying a house last spring. Our mortgage broker was great and after that we had no trouble closing even so far as closing a week early.

Kevo, I wouldn't buy outside of Boulder unless there is a place/town you really like. US 36 traffic isn't getting better and everyone I know takes back routes which might be slower but at least they're moving. I'm sure prices there will continue to rise but all those places struck me as better if you have kids. I would have recommended Lyons but that's not really an option and when it does get rebuilt it'll be a different place since all the character may have washed down to Longmont.

[grrrr]

If your monthly debt payments including the total estimated mortgage payment (including taxes, insurance, MI) are below 45% of your monthly income you qualify for a mortgage.

I have no debts whatsoever, but could never imagine taking a mortgage for 45% of my income. That's just insane.

I would be surprised if there would be much blowback from underwriters either. I put 25% of my gross income into savings each month now and plan to keep one year of income in available funds even after the down payment. We are shooting for a mortgage payment under 15% of income. But, I also will retire before the mortgage is paid off, so planning to buy a house at what I could afford now is not possibly the best idea.

[mud]

I have no debts whatsoever, but could never imagine taking a mortgage for 45% of my income. That's just insane.

Yeah I agree but it does allow more people to own homes compared to the past where you needed 40% down payment and DTI was limited to 20%. People owning their own homes is better for communities and the economy compared to a nation of renters.

I had a client who was a veteran that qualified for disability and was on a fixed income. Her husband had taken out 6 different loans for his businesses and cosigned her without her knowledge. One of those loans was for a refinance on their house with a rate of 8.99% and a monthly payment that ended up costing her 75% of her income.

She ended up getting a VA loan that dropped her payments to 42% DTI so she could get a divorce from her deadbeat spouse and still keep her home. Now she can afford to put food on the table and pay for her medicine.

[Benny Profane]

Yeah I agree but it does allow more people to own homes compared to the past where you needed 40% down payment and DTI was limited to 20%. People owning their own homes is better for communities and the economy compared to a nation of renters.

Tell that to a German. After they have to bail out a Spanish bank.

[mud]

Just keep renting Benny, people like you will continue to pay my bills, send my kids to college, allow me free time to volunteer and eventually retire.

I'll be skiing Yurp and AK cashing your rent checks every month.

[Hugh Conway]

I'll be skiing Yurp and AK cashing your rent checks every month.

of course you will mud, of course you will... right along with the rest of the TGR slumlords livin' the dream

[mud]

...............

[Hugh Conway]

stunning insight as always mud.

[liv2ski]

We are shooting for a mortgage payment under 15% of income. But, I also will retire before the mortgage is paid off, so planning to buy a house at what I could afford now is not possibly the best idea.

Can you take a shorter term loan (like 10-15 years) and have it paid off prior to retirement? If no, consider paying as much as possible each month to pay down the debt as fast as possible while working. Then 6 months before retiring, refi the now lower loan balance over a longer term (15, 20 or 30 years) to have the payment as low as needed to have a comfortable retirement.

[mud]

stunning insight as always mud.

Just remember to keep paying your rent so I don't have to kick your ass out, it interrupts my drinking and web surfing.

[liv2ski]

^^^I laughed. Totally feel ya Mud.

[Hugh Conway]

^^^I laughed. Totally feel ya Mud.

shouldn't you be channeling zerohedge? 5 years later and the apocalypse still ain't here man. Maybe it's livin' the dream with mud

[4matic]

Just keep renting Benny, people like you will continue to pay my bills, send my kids to college, allow me free time to volunteer and eventually retire.

I'll be skiing Yurp and AK cashing your rent checks every month.

ATT currently yields 5.3% and there are REITS that yield more if real estate is your thing. Without capital appreciation and in a rising rate environment rental property returns are not that great and also illiquid. That's why residential real estate rental business has always been a mom and pop affair and why cash investment in real estate rental market is drying up.

Landlording is not pimp daddy business and historically provides low returns.