Real Estate Crash thread

[Name Redacted]

Did you do 80/15 mortgages? If not, how did you avoid PMI?

Don't know, we just found a bank that was willing to do it. We have since refinanced for a cash out anyway. It was our first house, but we didn't need a FHA.

[skaredshtles]

Hoping that there will never be "another house" for me.

[Stu Gotz]

Who puts 20% down these days? Or any time in the last 20+ years?

If the area is considered “distressed” and the mortgage is non-conforming, banks are requiring 25% down.

It’s one of the drivers for the huge sell-off in suburban NYC housing. The era of the finance bro is coming to a close, and the jobs that provide buyers the ability to save for mid-six figure down payments are becoming scarce.

[Danno]

Don't know, we just found a bank that was willing to do it. We have since refinanced for a cash out anyway. It was our first house, but we didn't need a FHA.

So, you're saying that you found a bank that was willing to loan you 95% of the purchase price in a single loan, not charge PMI, and not extract money from you in some other fashion to make up for that? Sounds like bullshit or you didn't understand the financing.

Because it's not like you can just shop around for a bank that's nice and doesn't charge PMI when all the others do.

[TAFKALVS]

One of our local banks will do 7% down no PMI but you need stellar credit, good income + they won't loan on anything risky or non-conforming at that % down. They hold their own mortgages and don't resell to fannymae, etc. Also, your interest rate is higher.

[Danno]

One of our local banks will do 7% down no PMI but you need stellar credit, good income + they won't loan on anything risky or non-conforming at that % down. They hold their own mortgages and don't resell to fannymae, etc. Also, your interest rate is higher.

That makes sense. They cover their asses as much as possible, then extract a premium from the buyer.

[Name Redacted]

So, you're saying that you found a bank that was willing to loan you 95% of the purchase price in a single loan, not charge PMI, and not extract money from you in some other fashion to make up for that? Sounds like bullshit or you didn't understand the financing.

Because it's not like you can just shop around for a bank that's nice and doesn't charge PMI when all the others do.

Professional Loan.

I thought we were all dentists here?

[TAFKALVS]

That makes sense. They cover their asses as much as possible, then extract a premium from the buyer.

They also didn't need a bailout or restructuring in 2008... it's almost as if banks are more careful if it's their own money?

[leftfield]

Paid 0% down in 2010 and was able to roll PMI as a lump sum into the loan. In hindsight, i wouldn't have done that again.

[dunfree]

That makes sense. They cover their asses as much as possible, then extract a premium from the buyer.

Or you could look at it as skimming the cream.

They also didn't need a bailout or restructuring in 2008... it's almost as if banks are more careful if it's their own money?

more than a few banks that didn't "need" too took advantage of bailout funds because it was good business.

[CascadeLuke]

There is a loan type for high LTV without a PMI monthly payment. It’s called LPMI - Lender Paid Mtg Ins. It’s baked into the rate. I bet that’s what the above mag received

[Danno]

There is a loan type for high LTV without a PMI monthly payment. It’s called LPMI - Lender Paid Mtg Ins. It’s baked into the rate. I bet that’s what the above mag received

Exactly my point. If you are not paying PMI, only have a single mortgage, but only put 5% down, there's a reason for that. It's not just that you did a better job of searching for a mortgage then everyone else, you're paying for it somehow. Because mortgages are a fungible product.

[liv2ski]

Self-employed, high-asset/low-income, etc types of borrowers are more likely to get an advantage from portfolio loans than a vanilla home purchaser might.

All at much higher rates than a vanilla agency type loan. Not a fan of LPMI. It is better IMO to have the lower interest rate with PMI that will drop off between 78%-80%. Why have a higher rate until you refi?

[Name Redacted]

Exactly my point. If you are not paying PMI, only have a single mortgage, but only put 5% down, there's a reason for that. It's not just that you did a better job of searching for a mortgage then everyone else, you're paying for it somehow. Because mortgages are a fungible product.

You mean they don't do these for lawyers? https://www.bbvacompass.com/mortgage...nal-loans.html

We also have a portfolio loan. 7/1 ARM w/ 20% down on a second home. Rate is low, we don't plan on keeping it past 5 yrs.

[leftfield]

There is a loan type for high LTV without a PMI monthly payment. It’s called LPMI - Lender Paid Mtg Ins. It’s baked into the rate. I bet that’s what the above mag received

I don't think it was LPMI, my rate didn't change when i was looking at whether to make a monthly payment or pay the lump sum up front.

[Danno]

So, you're saying that you found a bank that was willing to loan you 95% of the purchase price in a single loan, not charge PMI, and not extract money from you in some other fashion to make up for that? Sounds like bullshit or you didn't understand the financing.

Because it's not like you can just shop around for a bank that's nice and doesn't charge PMI when all the others do.

Professional Loan.

I thought we were all dentists here?

Exactly my point. If you are not paying PMI, only have a single mortgage, but only put 5% down, there's a reason for that. It's not just that you did a better job of searching for a mortgage then everyone else, you're paying for it somehow. Because mortgages are a fungible product.

You mean they don't do these for lawyers? https://www.bbvacompass.com/mortgage...nal-loans.html

We also have a portfolio loan. 7/1 ARM w/ 20% down on a second home. Rate is low, we don't plan on keeping it past 5 yrs.

So, you're either intentionally playing dumb or simply don't know. But nothing you have pointed to changes what I said. Those loans are available, but they are at a higher rate than a conventional loan. Which is fine if that is what worked for you, and maybe the math for you was preferable to a more conventional approach. But your original post made it sound like you just found a great lender who didn't charge PMI. What you actually found was a different product than a standard loan, that gave some benefit (no PMI) in exchange for certain things that offset that (limiting the pool of borrowers to limit risk, and charging a higher than market rate interest).

[TAFKALVS]

Lol, that professional loan thing is such a dentist trap. "We know you're saddled with a huge amount of student debt but we know you REALLY need that waterfront custom 6 bed 5.5 7000 sqft McMansion... let us saddle you down with even more debt!"

[dunfree]

Lol, that professional loan thing is such a dentist trap. "We know you're saddled with a huge amount of student debt but we know you REALLY need that waterfront custom 6 bed 5.5 7000 sqft McMansion... let us saddle you down with even more debt!"

drs/dentists I know got out of school at >30, started in a practice and are looking to buy a home and start a family - several are female, they don't have that much time. they are tied into an area at that point and want a place to stay for years.

[Name Redacted]

So, you're either intentionally playing dumb or simply don't know. But nothing you have pointed to changes what I said. Those loans are available, but they are at a higher rate than a conventional loan. Which is fine if that is what worked for you, and maybe the math for you was preferable to a more conventional approach. But your original post made it sound like you just found a great lender who didn't charge PMI. What you actually found was a different product than a standard loan, that gave some benefit (no PMI) in exchange for certain things that offset that (limiting the pool of borrowers to limit risk, and charging a higher than market rate interest).

I think you are just trying to argue today. I'll let ya know if it snows this weekend.

[AdironRider]

My understanding professional loans usually carry like .5 to 1% increase in APR, which is basically the equivalent of permanent PMI.

Not that I expect them to be any more financially savvy than the average Joe, but at that income just rent for a year or two and you should have 20% no problem.

[TAFKALVS]

My understanding professional loans usually carry like .5 to 1% increase in APR, which is basically the equivalent of permanent PMI.

Not that I expect them to be any more financially savvy than the average Joe, but at that income just rent for a year or two and you should have 20% no problem.

My point exactly. But my observation is most are too busy spending to do that.

[Name Redacted]

My understanding professional loans usually carry like .5 to 1% increase in APR, which is basically the equivalent of permanent PMI.

Not that I expect them to be any more financially savvy than the average Joe, but at that income just rent for a year or two and you should have 20% no problem.

If we had waited 2 more years to save 20%, our rate would have been higher, and the same home would have cost $150K more, and we'd be living in a condo instead of a SFH.

[VTeton]

Who puts 20% down these days? Or any time in the last 20+ years?

I've never put less than 25% down and with the lower interest deductions, I see people putting more down. In SF, its seems like a lot of people put shit down and do I/O. While your at it, get a variable rate loan too.

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[AdironRider]

If we had waited 2 more years to save 20%, our rate would have been higher, and the same home would have cost $150K more, and we'd be living in a condo instead of a SFH.

That isn't the point. The point is a professional loan is more expensive than a conventional no matter how you slice it.

You could have gone conventional and paid PMI and been done with it by now with that level of appreciation (assuming you didn't take the max available of 1750k). Instead you are paying it for 30.

Maybe refi now since loan rates are exactly the same as they were 2 years ago, so all is not lost.

[Name Redacted]

That isn't the point. The point is a professional loan is more expensive than a conventional no matter how you slice it.

You could have gone conventional and paid PMI and been done with it by now with that level of appreciation (assuming you didn't take the max available of 1750k). Instead you are paying it for 30.

Maybe refi now since loan rates are exactly the same as they were 2 years ago, so all is not lost.

Like I said earlier, we refinanced shortly after getting the house. Who keeps the same mortgage for 30 years? So we ended up paying .25% above prime for two years, whoop-tee-doo! Rate isn't everything, especially when rates are as low as they were. There's a ton of other factors involved too, like liquidity, and other higher interest debt. We basically kept $60K from being locked up in our house, and put it in other places where it worked better for us. What if that $60K was in the S&P 500 for the last 7 years?