Home buying thread

joeboo13_foh · Aug 30, 2012

That"s true, pretty much nobody stays in one home for 30 years to pay it off anymore, so that may be a calculation that doesn"t really apply to a lot of people. Just make sure there"s no chance that you guys would up and move next year or something, you"ll more than likely have less equity in your home after you start up this new 30 year loan than you do now.

The one main figure I keep in mind whenever thinking about a refinance, 30 yr vs 15 year etc is that I want to make sure my home is paid off by the time I"m 60, regardless of monthly payment figures and such. I don"t want to go into retirement with a house payment. Right now I"m 34 with 25 years left on my current mortgage, and while theres a good chance we won"t be in this same house when I retire, if we do make the decision to move, it"ll probably be with a 15 year loan if I"m over the age of 40 at that point.

Brando · Aug 30, 2012

meStevo said:
There a downside to FHA streamline financing aside from jumping back out to 30 years? Would be going from $1024/mo / 5.65% to $933 / 3.75%. Would be more if MIP didn"t jump from $50 to $130. Don"t qualify for HARP 2.0 because we purchased our house several months late - 11/09 instead of 5/09 - lame. Latest worksheet from BofA has me at just over $800 out of pocket for the refi.

You can"t do an FHA streamline unless you already have an FHA loan, if you have an FHA loan then you can never do a HARP deal. HARP is only Fannie/Freddie loans before 2010.

Unless you know for a fact that you"re going to stay in that house 30 years then I"d always suggest taking the monthly savings, the national average for repayment is 4 years currently. Meaning people are either refinancing or seller their house well before the 30 year period should even be a discussion.

Without knowing what state you are in and what your costs are FHA loans by themselves are extremely profitable for banks, assuming you"re below $417k at 3.75% there is no way you should be having to pay a penny unless your impound account is short funds. I would quote you that rate at 2.375pts coming back to your for recurring and non-recurring closing costs as an example.

Cutlery · Sep 3, 2012

joeboo13 said:
If you are more than 3 years into your current 30 year loan, jumping back out to 30 years at those prices is losing you money.

$1024 x 12 months x 27 years = $331,776

$933 x 12 months x 30 years = $335,880

I wouldn"t do it unless you are only a year or two into your current loan, or if you just flat-out can"t afford paying that extra $91 per month. If its a financial issue, I"d find somewhere else to save $91 per month than resetting my home loan out to 30 years for that little of a savings.

edit - looks like you are almost 3 years in (going off of your 11/09 purchase date, unless you already refinanced once), you"d be losing money even without considering the extra closing costs for this refinance.

Gotta count in MIP. That drops off after you get 20% into the house, so it won"t be $933 forever.

Wrenn_foh · Sep 3, 2012

AladainAF said:
Box loans offers 3.25% atm on 30s with 0.50 points. For 3.375%, it"s a -0.375 points so you get some credit.

It"s crazy.

Wish I could get a 3.25% loan. Just bought an IP here in Australia and 5.95% was the best rate I could get. And its very hard to get better than an 80% lend, i.e. 20% deposit plus purchase costs are needed.

Have rates always been that low over there? It"s been around 5.5-8 here for the last 10 years or so.

Unidin_foh · Sep 3, 2012

Wrenn said:
Wish I could get a 3.25% loan. Just bought an IP here in Australia and 5.95% was the best rate I could get. And its very hard to get better than an 80% lend, i.e. 20% deposit plus purchase costs are needed.

Have rates always been that low over there? It"s been around 5.5-8 here for the last 10 years or so.

Rates are historically low as the government tries to stimulate borrowing for not just homeowners, but for everyone to get the economy going. Since your economy is doing much better, your lending rates are higher.

General Antony · Sep 30, 2012

joeboo13 said:
If you are more than 3 years into your current 30 year loan, jumping back out to 30 years at those prices is losing you money.

$1024 x 12 months x 27 years = $331,776

$933 x 12 months x 30 years = $335,880

I wouldn"t do it unless you are only a year or two into your current loan, or if you just flat-out can"t afford paying that extra $91 per month. If its a financial issue, I"d find somewhere else to save $91 per month than resetting my home loan out to 30 years for that little of a savings.

edit - looks like you are almost 3 years in (going off of your 11/09 purchase date, unless you already refinanced once), you"d be losing money even without considering the extra closing costs for this refinance.

Why would you compare nominal values on payment streams that stretch 30 years? The 93/month that"s saved can be used to either pay down other debt @ higher rates or invested. The yield needed on that money would be fairly low to be the better present value option, plus it provides more cash flow flexibility down the road.

OneofOne · Oct 11, 2012

Looks like we *may* finally have our home. The last place we bid (our 8th or 9th? I"m losing track...) their realtor liked our offer better but the owners preferred another offer that was slightly more. Turns out that higher offer is having financing issues, and they"ve just been issued "shit or get off the pot" papers (forget the actual name heh). As we signed paperwork to make us the official backup, we may just get our shot in a day or three.

Feels kinda bad to hope someone else fails in getting their home, especially after they paid for both the home and well inspection (which the realtor has copies of and will get us - saving us a chunk of change). But I suppose as my wife said, if they didn"t have their financing worked out to begin with, they never should have bid.

I"m trying not to get too excited but... I"m pretty excited!

/Facebook off

OneofOne · Oct 19, 2012

And... we go into escrow on Monday. Fun fact, if the process takes about 30 days, we"ll be packing the moving van right as my wife is due to give birth. How"s that for timing?

Cutlery · Oct 20, 2012

OneofOne said:
And... we go into escrow on Monday. Fun fact, if the process takes about 30 days, we"ll be packing the moving van right as my wife is due to give birth. How"s that for timing?

No, YOU"LL be packing the moving van.

I don"t envy you. I moved everything in my house myself, 100% except for the bed. Everything else, I hauled down 3 flights of stairs, and into my pickup, and then over to the new house and then either up or downstairs as necessary (split entry).

Buy some beer for your buddies now, you"re gonna need the help.

Sharmai_foh · Oct 20, 2012

OneofOne said:
And... we go into escrow on Monday. Fun fact, if the process takes about 30 days, we"ll be packing the moving van right as my wife is due to give birth. How"s that for timing?

Here is a suggestion but it carries a risk which is potentially a big risk depending....

You can go to your local downtown food kitchen and find resonably decent homeless or Mexicans who you can hire for a day for fairly cheap ($50 each might be on the high end) who can help you load and unload stuff.

To make this safer you should have everything pre-boxed that they will see so nothing small can go "missing" and even move the small stuff beforehand on your own. But if you are worried about them seeing where you are moving to you can still hire them just to load the truck (tell them you are moving across country or whatever) and then pay them, drop them off and just do the unloading yourself.

As long as you plan a little bit before hand and treat them with respect you won"t have much to worry about.

My dad and I have done this multiple times and he usually takes them out to a nice steak dinner at some buffet afterward and trade stories. Lots of them have military experience and can be a riot to be around.

OneofOne · Oct 20, 2012

TheCutlery said:
No, YOU"LL be packing the moving van.

I don"t envy you. I moved everything in my house myself, 100% except for the bed. Everything else, I hauled down 3 flights of stairs, and into my pickup, and then over to the new house and then either up or downstairs as necessary (split entry).

Buy some beer for your buddies now, you"re gonna need the help.

Haha well yeah, wife isn"t allowed to do anything but sit on the couch or bed while we move, bad phrasing =P

Normally it isn"t an issue - my buddies and I always help each other move, and whoever will buy lunch/dinner for all and that"s that. However events are conspiring to make 3 of 4 of them unavailable in that time frame And there"s no way only 2 of us can move everything alone.

I have been pondering the same thing Sharmai has, in hiring 3 Mexicans, as you can find them at any Home Depot, as well as a few other places. I"d be leery of that but my sister has rented help for various things before like that and never had any issues. Offer $10/hour or something plus lunch to pack up the truck and then unpack it. Other then our TV we have no obvious valuables, and we"d be moving about an hour away, so not terribly worried about anyone trying to break in later.

Or maybe I"ll just put a call for help out on Facebook. Lord knows, my wife (not being the social recluse I am) has more than a few people that would be willing to help /shrug

Really, my biggest concern is what if (yeah yeah likely a small chance but...) my wife"s water breaks on the day of moving. That would complicate shit like a mofo.

Still, first world problems and all. I"m getting a house!

Sharmai_foh · Oct 20, 2012

OneofOne said:
Really, my biggest concern is what if (yeah yeah likely a small chance but...) my wife"s water breaks on the day of moving. That would complicate shit like a mofo.

Still, first world problems and all. I"m getting a house!

TBH I would pack as much as possible right now into boxes (spread it around don"t let any box become to heavy) and move as much stuff as you can as soon as you can. When your wife"s water breaks you aren"t going to give two shits about anything else in the world for about a week. You might even forget about moving at the time.

But if you have more willpower then I did and your wife OK"s it ahead of time then theoretically she could have the baby and you could leave the next day while shes still in the hospital and continue moving.

OneofOne · Oct 20, 2012

Well, we don"t actually have the house yet - we open escrow Monday. So no moving yet (though we are packing some). But we have the reports, and the owner and her realtor have been upfront about everything (it"s looking like), since they don"t want to waste another month if we back out due to issues popping up. After all, they just wasted a month on some buyers who couldn"t get the financing to support the offer they bid on the property /boggle

So it should be smooth sailing and just going through the motions.

The one question I did have is, our realtor thinks we should order our own inspection reports on the home and well. His thing is since the original reports don"t belong to us (the flakes just had them done like 2-3 weeks ago) we have no recourse "if any problems arise down the line". Only, that doesn"t really make sense to me because, what, the guy who did the well report was a dunce and it"s actually in bad shape? Only thing you could do (had we paid for it) is sue the guy for... what? Causing us to overpay on the property or something? I don"t get it. I"ll ask our realtor more about that when we speak again Monday. Either I"m missing something obvious or our realtor is overly-cautious.

I"m not trying to cheap out per se, but buying a home + having baby at the same time, I"m not into wasting what, $500-$600+ for no reason.

Picasso3 · Oct 21, 2012

I say fuck home inspections but wells are a different gig. Recently had a coworker that had to sue after closing because the well was actually dry and he had poured in water to make it pass. Ended up having to run a water line like 2 miles.

Cutlery · Oct 21, 2012

You don"t really have a recourse anyway, so it"s not a big deal. You know what you"re buying, and as soon as they hand you the keys, it"s your fucking problem from then on out anyway. What are you gonna do, back out because you need a couple hundred in repairs somewhere? No, of course not.

So if the other inspection came back decent and you can"t see anything physically wrong with it (water where it shouldn"t be, wicked up the walls in the basement, shingles peeling, etc), then don"t worry about it. Realtor is probably friends with the inspector and trying to drive business anyway.

krax_foh · Oct 21, 2012

OneofOne said:
Well, we don"t actually have the house yet - we open escrow Monday. So no moving yet (though we are packing some). But we have the reports, and the owner and her realtor have been upfront about everything (it"s looking like), since they don"t want to waste another month if we back out due to issues popping up. After all, they just wasted a month on some buyers who couldn"t get the financing to support the offer they bid on the property /boggle

So it should be smooth sailing and just going through the motions.

The one question I did have is, our realtor thinks we should order our own inspection reports on the home and well. His thing is since the original reports don"t belong to us (the flakes just had them done like 2-3 weeks ago) we have no recourse "if any problems arise down the line". Only, that doesn"t really make sense to me because, what, the guy who did the well report was a dunce and it"s actually in bad shape? Only thing you could do (had we paid for it) is sue the guy for... what? Causing us to overpay on the property or something? I don"t get it. I"ll ask our realtor more about that when we speak again Monday. Either I"m missing something obvious or our realtor is overly-cautious.

I"m not trying to cheap out per se, but buying a home + having baby at the same time, I"m not into wasting what, $500-$600+ for no reason.

I would have some small concern that I was being scammed; that the flakes are fakes, and the inspector is in the pocket of the seller. I am paranoid like that though.

Brando · Oct 21, 2012

The realtor should be giving you a list of inspectors, just not one. I would do it if I were you just for piece of mind as while they cannot find anything inside the walls unless there are tell tale signs at least you won"t be kicking yourself if something does come up after closing whether the inspector would have found it or not.

Not to mention the seller is probably pretty eager at this point for you to close so if the inspection does come up with some minor items you can probably get the seller to handle it just so you don"t cancel.

splorge_foh · Oct 21, 2012

Likely the realtor is just covering his own ass. Re assessing the property at this time can only cause problems for him, i.e. you find something else that jeopardizes the sale. I guess he is advising you so that if indeed there is some problem down the line, you cannot come back to blame him and he can say "well i urged you to get your own appraisal done".

Cad · Oct 22, 2012

Your state may vary but in TX the inspectors carry insurance policies that have some stated amount that you can get if they fuck something up (miss it) and cause you needed repairs. They really have to fuck up though.

OneofOne · Oct 22, 2012

After talking to 2 realtors who are friends of the family, and them both pretty much saying the same thing - "I don"t recommend to my clients that they pay for their own reports when getting free ones unless they don"t trust the original contractors", we"re just going to go with what we were given. Our realtor says he knows the guy who did the home inspection and has used him before and he"s good, so, /shrug

Moving right along!

Home buying thread

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