I suspect they will drop the mileage rate. If taxes go up that much they will be voted out.
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Mortgage Rates (5 Viewers)
- Thread starter MechEng
- Start date
Sand
Footballguy
The Mortgage Market Is So Bad Lenders Want Ex-Employees to Give Back Their Bonuses
The mortgage industry is notoriously feast or famine, but there’s no obvious way out of this bust, and many mortgage companies are growing desperate.
www.wsj.com
This is just how bad the mortgage market is right now.
massraider
Footballguy
Luckily, those mortgage brokers made so much money the last 15 years that I am sure they all saved their money and are chilling on Easy Street.
Or not.
DA RAIDERS
Footballguy
Whatever you do, don’t tell us where.
ghostguy123
Footballguy
Oh sorry, Northeast Ohio.Whatever you do, don’t tell us where.
I've head people on these boards say this a lot, the "how is a house that cheap even livable"????
Well, wages are different all across the county. I'm a nurse. Depending where I live, I could make 25 bucks an hour or 125 bucks an hour.
Land varies wildly. A few years ago I could buy 10 acres near my house for like 30 grand. How much would 30 acres cost in San Fran or LA or NY??? Millions upon millions??
I've said it before that people who grew up and live in the big money city areas can retire the sweet life if they move to the low cost areas. I dont mean crappy areas, either.
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Nugget
Footballguy
I think Chad is correct and in most scenarios owning is preferrable, even at slightly higher rates. In the past 16 years I've owned 2 homes and had 2 rental experiences - 2.5 of the 4 experiences I would rate as negative.
Finacial upside/downside
- Mesa, AZ - bought 1700 sqft single family home in April 2007 for 238K. Sold in April 2013 for 151K. I consider this to be a negative buying experience.
- Rancho Santa Margarita, CA - rented 1650 sqft single family home for $2800 month in March 2013. Landlord decided to move back into the home and not renew lease- we were forced to move in March 2014. Spurred our decision to move back to Kansas. I consider this to be a negative rental experience.
- Lawrence, KS - bought 2400 sqft single family home in June 2014 for 210K. Divorced in 2018. I consider this 50/50 - my ex made out well on the home and sold it last year for ballpark of 350K.
- Lawrence, KS - rented a 1500 sqft townhouse, 2.5 bedrooms/ 2 car garage in February 2018. Rent is currently $350 over property taxes/HOA/insurance costs. This is where I currently live and consider this a positive experience.
Finacial upside/downside
- Appreciation rate - 4-5% annually
- Closing costs on mortgage -2-3% one time
- Moving costs - 1-3% depending on distance and house size
- Selling costs - 6-10% - real estate fees/closing costs
- Maintenance - 2-4% per year - flooring/landscaping/paint/deck/appliances
- Cost of capital - mortgages rates do matter, but opportunity to refinance
- Opportunity Cost of mortgage - I would have much rather bought in Phoenix in 2010, but I was 95K upside down in a mortgage at that time. HELOC has opportunity to partially offset, depending on current equity position
- Opportunity cost of initial funds - currently earning 5.24% on potential downpayment money, monthly savings vs mortgage
- Sweat equity
- Repair - Landlord installed a new French Drain system in 2021. Not sure on her depreciation schedule, but likely made the townhouse breakeven at best for 18 months.
- Taxes - not paying taxes on appreciation vs dividend income, 250K cap gains exemption
- Fixed payment - P&I not increasing - less to interest each month.
- Pride of ownership/connection to neighborhood - we built a lot of lifelong friendships on a shady street in a family neighborhood with houses that don't come up for rent.
- Personalization - I'd like to add a L2 EV charger, but I don't want to pay for the upgrade in a rental. Similar feelings on flooring/applainces.
- Leveraged opportunity for appreciation - If I can have a 400K investment grow at 4% with only 20K capital investment
- Length of time planning to live in location - Buying/Selling/Moving/Closing cost will take 3-5 years to break even.
- Security - If our landlord had renewed our lease in OC in 2014, there is a good chance we would have stayed. It caused a lot of stress and was likely a facotr in my eventual divorce.
- Time - I don't own a lawnmower now. HOA takes care of tress, snow removal, paints the townhouse. I haven't had to scrape popcorn ceilings or build a fence.
- Legacy - I currently own no property that I can pass down to my kids.
- Kids - My youngest is a sophmore in highschool, oldest sophmore in college. I don't know where they will be in 3 years.
- Work- I work from home 100%, my job is based in Michigan. Opportunitues to travel/relocate easier/cheaper
- Relationships - Does it make sense to combine housing with a significant other, where would that be, and how much space is needed?
- Parents - My parents are in their 70s - will their health hold up and do I need to be closer?
Stoneworker
Footballguy
Except most people wouldn't call going from 2.7% to 8% in under three years "slightly higher" rates.
And that's what underpins the entire current financial dynamic.
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Chadstroma
Footballguy
No. Demand is too high. Supply is too low. Those won't get in more balance for quite some time. If home values in the macro came down significantly off of seasonal adjustments, then there is a ton of demand that would come into the market to buy. This will keep prices from going too low. The cost of homeownership is high right now as we have not seen rates like this in twenty years. When those rates go down, we are likely to see RE get hot again like it was recently with multiple offers over asking price when the property is first listed. Inflation also keeps these prices up. The real value of these homes are lessened as inflation eats at the buying power of the dollar. Eventually wages will increase as well. So many people keep waiting for a 2008 event in RE and they don't understand how different a RE market that was from what we have now. They also seem to forget, even with that catastrophic event in RE, the market came back and MORE. You can't fight it. Even if there is a dip, RE appreciation will win over time. And there simply is no reason to expect a significant depreciation in home values anytime in the near future.
Chadstroma
Footballguy
@Nugget can confirm this or not but when I read that, I read it as he meant slightly higher cost.
Chadstroma
Footballguy
Based purely on what I have been told. I strongly disagree.
If my kids were of age, I would be doing everything I could to get them into buying a home now.
ghostguy123
Footballguy
I don't mean rent forever. I mean rent and save, then buy. Not only will she save more renting, also not have the expenses, but also not have to through the sale of a house to buy a better one. More flexibility.
It's a no brainer for her to rent for say the next few years then buy a better house than she can buy right now.
If something came along that made sense then sure. Right now I haven't seen a property that makes sense here for over a year
Nugget
Footballguy
I think it is both slightly higher interest rates and costs. Interest rates are about 1% higher than where they were last year.
If I think houses will continue to appreciate at around 4% per year, a 500K house will cost 520K next year. If I buy it now, I won't pay an additional $20K in interest over the next 12 months on the loan. If the rates drop, I can refinance. If rates go up, I'm locked in now. If you are planning to be in the same area and the same home for 5+ years, and it fits in your budget, it makes sense for a lot of people to buy.
Chadstroma
Footballguy
The problem, in my view, is that that $100K home will then be selling for $110K a couple of years from now (as an example, I am not meaning to give an actual calculation of what appreciation will be in two years). The cash flow difference in rent will likely not make up for that difference. I would bet that in that two year time frame, rates will go down enough to make a refinance possible and gain the savings there while in that same two year time frame, rents will go up.
Buying decisions are never really about just the numbers. And certainly not about what the numbers are today. Need and wants are a big part of it. If the $100K priced house will not be sufficient, I understand. If it is aspirational in nature, then do expect that $200K home to not be priced at $200K in two years.
-OZ-
Footballguy
I’m strongly considering buying the lake house we want in the next couple years, renting it to my 20yo if he got a solid paying job. We’d take the house eventually but having him take care of it for the next few years would be a net positive. He’s not ready to buy his own place yet.
jwb
Footballguy
We planned to move to NC in 2020. Had a spring trip planned to buy a house. Then Covid came... kind of killed that. We said at the time "we'll revisit in a year".
As 2020 progressed and got to autumn, even though we were still in masks and restaurants were half full, it became clear we would be able to live with this. Vaccines were coming, and soon the shackles would be off. I felt VERY strongly that "after the holidays" there would be a stampede for houses. So we acted quick - booked an NC trip in Dec, and found our home. Made an offer a few days before Xmas 2020 for asking price, which was immediately accepted. We were the only people to make an offer, even though it's a gorgeous house that was very reasonable in price. We closed a month later and locked in at 2.75%.
My strong feeling of "after the holidays" came true. Right after we moved in, the house next door went on the market. People lined up. Many offers. It sold for $40k over asking (our house is nicer). The house two doors down went next - $50k over asking. It was a feeding frenzy. And those "over asking" homes have increased in value and held, and our house has followed. Buying when we did was the best financial move we could have possibly made.
I feel the same is happening now. As soon as rates even begin to crack, everyone will be all "ok, let's buy then refi". Prices will jump, and they will probably never come back down to make a difference. Not that I know anything about the industry, but I agree - if you want to own and *can* buy right now, do it. Refi later.
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SoylentGreen
Footballguy
In 2004 I wasn't even thinking about buying in the Bay Area. Met a realtor who told me all about no-money down, interest only mortgages, almost anyone could qualify! So we chatted with a mortgage broker, and sure enough, qualified for $400K 5/1 interest-only ARM. I think they asked how much I made, but didn't ask for proof. Bought a 2-1 condo for $400K that year, with no money down. It was "worth" $500K 18 months later, so we took out home equity to pay credit cards, redo the floors, bathroom, etc. But as time went on and with the $400 HOA dues, we were stretched pretty thin. Then a big storm came in, wiped out the side of the hill on the other side of the complex, red tagging 4 units. Every single owner was hit with an $18K assessment for the repairs. Now we were tapped out on equity, and using credit cards again to cover any unexpected expenses, which were mostly medical with our infant child.
We all know what happened to values in 2007-2009. After peaking at $535K or so (based on comps in the same complex), the value of our place plummeted to under $300K. We now had $465K in debt so were underwater by $165K, and in 2009 the loan adjusted and our monthly payment shot up something like 70%. Even though in that 5 year period I had grown my wages, it wasn't by 70% and there was no way we could afford the mortgages any more. So we walked away and filed bankruptcy, just crushing me personally. It sold at auction two years later (2011) for $207K.
Yes, I know being a living example of The Big Short isn't nearly as likely to happen now as it was before the GFC. But that chance meeting with a realtor on Union St in 2004 took me down the home ownership path, with accompanying decisions I take responsibility for, that led to financial ruin that lasted for 10+ years.
I rented for the next 13 years. I rebuilt my finances, and was able to do so in part because large, unexpected expenses didn't occur and set me back precisely because I was renting. I was able to move easily during a divorce (financial ruin leads to that sooo often), and then again to switch school districts for my kid. The last place I rented they didn't raise my rent for 5 years. A couple of years ago I did finally buy a home again, but I did so knowing I had income to afford the expenses that come with it. And good thing! Three months in our AC went out during a stretch of 100 degree days, there went something like $1000. Two years later a new roof (which we knew was going to be needed going in), there went another $18K. If I wanted to sell now, with the 5% or so closing costs and factoring in my down payment and repair expenses, I'd be up just a couple grand. This is a much more "normal" home ownership experience than my prior one, but shows it's not always the financial no-brainer that some preach. It also speaks to my belief that if you're pretty sure you aren't going to move for 7-10 years, and you can afford the expenses that are absolutely going to come with home ownership, it probably makes sense to buy. But if either of those isn't true, it probably doesn't.
fruity pebbles
Footballguy
I definitely see the allure to home ownership and it’s obviously been lucrative the last couple years with the way prices have gone up. I’ve rented and owned several different homes in the past. The times I’ve had the most money and funded my retirement at a rapid rate were when I’ve rented. The cost of repairs and just general upgrades and continuously purchasing new stuff for the house is lowballed by most when talking the cost of ownership. You can really bank some cash when your expenses are largely fixed. Just my experience in the past.
ghostguy123
Footballguy
Take that 10% right back off for the cost of selling a house and moving. Take even more off for home repairs. The types of homes teens and early 20 something can afford right now are going to have all sorts of issues.
Also the hope will be an increased inventory allowing for some actual CHOICE. Right now near me anything reasonable that goes up for sale is under contract in a day. Even if the prices continue upward, maybe just maybe there will be something to choose from rather than something to be forced into.
Stoneworker
Footballguy
"Buy now and refinance in two years when rates go down"
Guess who gets paid twice in that scenario?
Guess who gets paid twice in that scenario?
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Not sure you case really applies. @Chadstroma has been talking about putting people who can afford the house payment into a home. You clearly couldn’t afford the house payment once the 5 year period ended and you took out equity the second you had it. Th tough part of your story is that you could have been golden right now in an amazing place. Had you tempered it and realized you couldn’t afford a normal 30 year and that you had a lot of other debt to clear first, you might have bought a house after the crash. I’d bet those condos are now worth a good amount more than if you bought in 2010. Might have been able to buy a SF home for $400k and have $400-500k in equity. Sucks that you got found by a bad realtor that was just looking for a commission.
Chadstroma
Footballguy
I think the extreme outlier of the 2008 RE crash impacts a lot of people's thinking. Even more so for someone like you that experienced the full nightmare of it all in full techno color.
One thing that is so very important to know and for people to understand is that what happened with RE before, during and after the 2008 crash is very unusual. As I have noted before, most recessions actually see home values increase. It is very counter intuitive for people who are not in RE, heck, even for people inside of RE. I remember, a few years back, the time that I was presented with the data. It amazed me. I assumed, bad economy = bad RE market. The reality is that what happens is that in the recession, interest rates go down and people buy. When people buy, values go up.
Why was 2008 different? Because RE caused the recession. The underlining issues with RE prior to 2008 were massive, varied and complex. The Big Short is a good and entertaining movie that touches on a major issue of what happened but it is far more further rabbit hole than that movie. For the most part, even though I have massive issues with much of the following legislation from that, there was actual some good out of the laws passed that 'fixed' many of those issues to be things that are no longer a concern. A big part of the greed part was taken out after years of massive government and class action lawsuits that hammered banks. Also vastly different, put very simply- many more people from then and much less home building for well over a decade.
As an example of those lawsuits, I remember BofA paying a $17 billion settlement as just one of the payouts that they did a number of years ago. It is a huge reason that usually banks suck at mortgage lending, because they won't want to do it. Commercial lending is much less costly and much more profitable to do (well.... until recently, I think that a lot of the banks are close to getting smacked around with large losses on commercial property lending outside of multi-family lending). Because of regulations, banks basically can't NOT do mortgages, so they do them but only if you basically force them to and they will go ahead and charge you for the privilege of having your mortgage with them. It is a big reason why I went from mostly working for banks in my career and back before 2008 refused several offers to work as a broker even though I would have made MUCH more money. I refused because pretty much almost every broker I knew back then were absolute scum. A worse version of a used car salesman. I just wanted nothing to do with them. Fast forward with 2008 and a number of years later and then I saw the real differences of what brokers were able to do versus banks. It was amazing to me but the roles largely reversed. I am a customer advocate at heart, so I made the jump.
My own 2008 experience is similar in many ways actually if you would believe that. I bought my first property in late 2006. We were in the burbs of Chicago at the time. A friend was selling his condo and my wife worked in the city and I was moving to a position downtown. It made sense. I expected a significant "market correction" but that we would be there longer than it would take to rebound. Since we were not using realtors, my friend saved on the transaction and gave me most of those savings in the pricing. I got a good deal on it and used an 80/20 to buy.... but yes, I underestimated the depth and length of what would happen in the RE market. Not too long after, I lost my job and it became real hard to find another job in the financial industry. I was unemployed or under employed for several years. Finally after getting things going in the right direction again we decided after seeing the deteriorating conditions of living in the city that with our new daughter, we had to move. After reviewing my options, I decided I would walk away from the condo and we bought a home in 2011 which is the same house we live in today. Outside one large large ticket item (a new furnace and AC) about $8K and then a restoration of some drywall damage from leak ($500ish?) I can't think of anything else that would have cost me over $200.... and the things around that would prob total less than $2K over that period of time. Now, we actually pay less a month than we did in 2011 with a refinance (went from 3.25% which I thought I would never get rid of to mid 2%) and have done successful property tax appeals. We took out an equity somewhere along the way which I rolled into the refinance, I want to say that was about $30K. Today, we have about $200K in equity. So, over that period of time we have added to our net worth by $230K being in a actually subdued burbs of Chicago market.
Yes, time is an important factor but you don't need to be in one spot by 7-10 years to make the difference. If you are going to move around one a year, great, rent. If you are going to be in one spot most likely for more than a couple of years, ownership outweighs renting in most situations, in most times for most people. It isn't a no brainer as you there are a lot of variables but the numbers just do not lie. Homeownership is vastly superior to renting... unless you are a landlord and then people renting is the no brainer.
Chadstroma
Footballguy
Ok, let's talk about this... because this isn't the first passive aggressive swipe at me in that my industry is mortgage lending and making money.
Let's start with how many FBG's I have helped over the last few years. If I helped 10 (it has been more than that for sure) then 9 of them I did not see one single penny from helping them. I took my time to connect them with a good broker that I knew (in most cases though in some instances I would have to try to find someone for them in states I just didn't know anyone) and legally I am unable to get any compensation for that.
Now for the 1 out of 10 that I did actually help personally. Not a single one of them did I take a full commission on. I lowered my comp and passed that on to the FBG. Was it the 'smart business man' thing to do? Nope. But that is how I roll. I even had one of the owners of the brokerage ask me about it and I told her that it was my FBG discount which confused the heck out of her. I just told her that these were my friends. Most of those that I helped, didn't even know about it. It wasn't something that I would go out of my way to tell them about.
I wouldn't bring it up now but honestly these comments are starting to really piss me off. Yes, I know a lot of people in lending that have made a lot of money. I am not one of them. For several reasons but one of them is that I am not driven by money and never have been. I made decisions that let me sleep better at night rather than just making more money. I am not talking about moral questions of do the right thing or the wrong thing but just just like the FBG discount above, I often will take the sacrifice on my end to help someone else out.
These comments about it being a racket or that I have made so much I should be on easy street or guess who gets paid twice is just really jerkish. My position is based on what I think it best for people and I am advocating that. It isn't based on what is best for me as these type of comments suggest. If you disagree, fine, then state your case. I will state mine. Most people will not change their minds either way but there is no reason to attack me, even passive aggressively like this, it is uncalled for and really should just stop.
Ron Swanson
Footballguy
@Chadstroma 's done right by a lot of us.
ghostguy123
Footballguy
This is very correct.
However, that doesn't mean every written word should be taken as gospel. Several of us have brought up situations where his advice isn't going to be the best way to go. These aren't the "most of the time" situation he is referring to. He is definitely correct in saying most situations it's best to buy though.
Agreed, full stop - this thread has been extremely informative for me over the years thanks in no small part to his posts, and no one should be snarkily attacking his good faith. It is fair to add the disclaimer that he's got a self-interested viewpoint on these buy/sell discussions, though (even if I think I generally agree with most of the substantive advice).
Yep on most times. We bought my current house in 2006, right before the collapse. We rolled over my first house bought in 1998, so we had a nice amount of equity but my mortgage rate was somewhere around 6.75, not much different than now. 17 years later and my out the door P&I+Tax/Insurance mortgage payment (in a 15 year fixed now) is about $1900 and around 60% of that goes to principal now so our “cost” is $800 a month and the rent zestimate is 5x that. Since we’ve been in the game awhile, we’re at almost 80% equity. Even with living through the dot com blow up and the financial crisis, we are so far ahead of where I’d be if we rented. So glad we decided to buy our first home before we got married so we wouldn’t have too much going on at the same time.
Osaurus
Footballguy
fruity pebbles
Footballguy
A big part of it imo is if the person invested the savings in a retirement plan way back when as well. Most don’t so I agree that buying a house is the best course for most. It’s like a forced savings plan. But back in 2006 the SP500 was 1200. It’s since quadrupled. I’ve run the numbers accounting for everything. Most only account for the actual house payment with a nominal amount for repairs etc. They don’t account for the difference in utility cost, home improvements, real cost of repairs, tax increases, insurance increases etc. They also don’t account for if you invested the 20% down payment and the savings in payment over the early years when your payment is going strictly to interest. I’ve owned and rented as have most. I’ve run the numbers many times. Real cost is pretty close. All areas are different I understand that. Where I live it’s way more expensive to buy right now and there’s no guarantees you’ll be able to refinance down the road. Interest rates may stay high for awhile. If rates do come down it’s because the economy has slowed considerably which means job losses so there’s no guarantee you’ll be in a position to refinance. Refinancing also restarts the loan back at 30 years again.
DA RAIDERS
Footballguy
chad is good people. are there bad apples in the mortgage industry? of course. chad is the furthest thing from one. he genuinely enjoys helping people.
Craig_MiamiFL
Footballguy
SoylentGreen
Footballguy
Yup, my experience through the GFC isn't likely to be replicated going forward, which I called out. But my current experience isn't that out of the norm, I'm sure, and shows it's not just math around "wealth built". Home ownership requires access to funds that renting just doesn't, whether that be savings or excess income. Look at all of the stats around people being unable to cover a $400 unexpected expense. It's obviously not broken down by renters/owners, but that ain't all renters. I may have a bit of equity in my home but I can't access it right now without selling, so that doesn't help me cover the next $1000 expense that pops up.
Long term, no question it's a primary source of building wealth for many. And if you can cover those expenses and your time frame is "several" (ymmv) years, it makes sense for most.
And agreed with most others that you are primarily just providing industry expertise and experience in this thread, so the digs at you are totally uncalled for. And it's most definitely not being excellent to each other.
-OZ-
Footballguy
Sure. But ultimately, if you believe prices are lower now than they will be in two years or you can get the house you want now, the advice is still probably correct. Maybe not, maybe prices drop in the next few years. (I kinda hope they do). But more likely than not, the above is probably good advice IF now is right for you.
someone making money off a deal doesn’t necessarily make it bad for others. Be skeptical, do your due diligence. But it can be right.
As others have said, Chad has helped many of us save money. He linked me up with a good company that got me 2.25/30. No complaints here.
Stoneworker
Footballguy
If you're doling out financial advice based on the "bet" that interest rates will fall in two years, then the best advice is not "buy now and refinance in two years." The best advice is to rent now and buy in two years.
Historically speaking, the only time the Fed cuts rates long enough and deep enough to justify refinancing fees is before/during a recession (go check the FRED database if you doubt). And if there's a recession in two years, then home prices will drop (as they historically do, including the one you just advised someone to buy) and inventory will increase (giving someone many more options than in the now-constrained market).
Use whatever current market data you want (as I did in an earlier post above using Zillow data). In all but a few markets in the U.S., rents are currently significantly lower than PITI for the exact same single family home/townhome.
So instead of relative negative cash flow, get a positive cash flow difference by renting at less than PITI for two years, no R&M headaches, and save along the way. Park the down payment in a 1-3yr Treasury ETF that will throw off a monthly 5%+ risk-free yield, on top of capital appreciation when rates fall, and the flexibility to liquidate at de minimus or no fee when ready to buy a house.
Then take advantage of a much greater inventory selection, get the pick of the litter home in the buyer's market, save money buying that home at a lower valuation vs. today, and still maintain positive cash flow if/when the PITI vs. rent differential reverses itself due to lower rates.
Oh, and pay only one mortgage origination fee.
Orange&Blue
Footballguy
don't they have a law that prevents such gross valuations? hell, even backwards Oklahoma has one.
There is no law. This is going to really hit the retired and elderly that own their homes and are on a fixed income.
Willy
Footballguy
Appraisal value really isn't the full story. Is the municipality increasing the tax levy? If not, then your taxes may not go up at all, even if the appraisal is +50% because everyone else's appraisal also went up 50%. In 2021 the city increased my appraisal by 30%, my taxes went up 4.8% or 150 bucks. That wasn't too far off the norm, and they went down the following year.
The levies have not changed so we won't know for sure how much the tax will go up until the calculation comes out in December or January. The county auditors are telling everyone to be prepared for increases.
-OZ-
Footballguy
Maybe, maybe not. Buy when the time is right for you. I’d assume rates aren’t guaranteed to fall, buy what you can afford and works for you. Or wait if the time isn’t right for you. But really the timing depends far more on the individual than any expectation of changing rates.
-OZ-
Footballguy
If you’re talking right now, yes.
For the lower rates, even the first year principal and interest are really close. For my rate, the first payment was slightly more principal than interest.
Which really is just another reason rates matter a lot.
Chadstroma
Footballguy
Thank you to those who spoke up for me here. I do appreciate it. I have known many FBG's really appreciate what I have tried to do as I have had many extremely meaningful and heartwarming direct messages expressing their gratitude and how it is helped their families for the better. Those emotional paychecks are worth more to me than actual ones (though I still need the actual ones to live lol)
I tried to ignore previous swipes, but I am not going to lie- having my integrity questioned is something that does get to me. It is something very important to me. I have always done business in ways that were not the business way. Instead of using sales techniques to try to win I have simply tried to help people. Over my career in financial services it actually paid off with lots of awards for top sales etc. I found that once people know that you are trying to do the best for them and genuinely want to see them succeed- they not only become a client but they become and advocate. My success through all the years has been by stumbling on that in my first job in financial services because I never did it with the intent to become successful. I was simply a kid working a teller job that intended to go to full time Christian ministry and then I found myself saying things like "Hey, I noticed that you don't have the over draft protection, it is free and saves you money if you ever over draft your account and won't cost you anything if you don't. You should set it up." because it made sense for them and was helpful. Next thing I know, I had tons of referrals and was the leading teller (this was back when branches had tons of tellers- lol). That snowballed. Anyways.... integrity is important to me.
Question my intelligence (I do that myself often) or experience is inadequate. Question my data or my conclusions. Say that my math doesn't math or that I am not thinking of an important piece to the puzzle. I know you don't KNOW me but just give my integrity the benefit of the doubt and don't assign nefarious motivations to what I am presenting. If that is the only thing you can do then maybe your position isn't as good as you think it is.
I tried to ignore previous swipes, but I am not going to lie- having my integrity questioned is something that does get to me. It is something very important to me. I have always done business in ways that were not the business way. Instead of using sales techniques to try to win I have simply tried to help people. Over my career in financial services it actually paid off with lots of awards for top sales etc. I found that once people know that you are trying to do the best for them and genuinely want to see them succeed- they not only become a client but they become and advocate. My success through all the years has been by stumbling on that in my first job in financial services because I never did it with the intent to become successful. I was simply a kid working a teller job that intended to go to full time Christian ministry and then I found myself saying things like "Hey, I noticed that you don't have the over draft protection, it is free and saves you money if you ever over draft your account and won't cost you anything if you don't. You should set it up." because it made sense for them and was helpful. Next thing I know, I had tons of referrals and was the leading teller (this was back when branches had tons of tellers- lol). That snowballed. Anyways.... integrity is important to me.
Question my intelligence (I do that myself often) or experience is inadequate. Question my data or my conclusions. Say that my math doesn't math or that I am not thinking of an important piece to the puzzle. I know you don't KNOW me but just give my integrity the benefit of the doubt and don't assign nefarious motivations to what I am presenting. If that is the only thing you can do then maybe your position isn't as good as you think it is.
Chadstroma
Footballguy
I have never presenting myself as an Apostle of Mortgages. Would I consider myself an expert in this subject matter? Yes. Does that mean I am infallible? No.
I have conceded numerous occasions that it isn't a one size fits all. I am found of saying that in personal finance, the fastest way you can find someone who isn't a professional or is trying to sell you something is when they have a lot of "all", "always", and "never" type positions.
I do believe strongly that though now is not a great time to buy- it is going to be a better time to buy than it will in the next several years. More so for FTHB than current homeowners. I do believe for most people, in most situations, in my areas, etc it is better to buy now if they can qualify and it fits their budget than it is to rent and look to buy later in the next couple of years.
Chadstroma
Footballguy
Refinancing does not have to restart the loan back 30 years. It can.... if you wanted it to. Or you can shorten it. Or, if you are working with someone like me, we have access to lenders that will do custom terms. So, if your 4 years into your 30 year fixed mortgage and refinance but you don't want a 30 again and you don't want to do a 20 year then I can get you a 26 year mortgage and you take the interest savings and a lower payment.
What term you want really depends on your wants and goals.
For someone like you, I would actually talk to you about doing another 30 year. Why? Because you are obviously very focused on investing in the market. Another 30 year mortgage drives your payment down to increase your cash flow which you can then funnel into the market. Your expected returns from the market would be greater than the cost of the funds you are using.
I didn't recommend a ton of shorter terms for my clients over the last few years because rates were so low and a lower term didn't lower them that much more. Cash flow for the cheap funds would be a better route for most. Looking ahead, when rates start to come down again, shorter terms will make more sense for many of those refinancing, depending on the specifics of course.
Chadstroma
Footballguy
The data says that for the vast majority of Americans.... home ownership IS their wealth. It shouldn't be that way. But it is. For renters, the data says that they haven't created wealth.
The correlation and causation of which is obviously not straight forward, varied and complex but the data is absolutely clear for most Americans, their wealth is in homeownership.
Chadstroma
Footballguy
And that is the crux of it. The data tells me that home valuations are not going to go down. My overarching position is that you don't make decisions of buying based on interest rates. You do make decisions based on valuations though. I see no reason to expect home values to go significantly down outside of normal seasonal adjustments any time soon.
Chadstroma
Footballguy
No, the advice isn't that interest rates will fall in two years so who cares. The advice is that when interest rates fall, home buying will get harder for FTHBers so it is best to not waste money in rent hoping that you will have a better buying opportunity in the near future if you have the choice to buy now.
I am very aware of interest rates as I have lived it for 20 years. I have also spent quite a lot of my time knowing and understanding the markets for interest rates. I know the history of mortgages rates. You are absolutely incorrect with the assumption that home values will drop in a recession. Of the last 8 recessions, only 2 saw property values decline. One of those two was the last one. That was a drastic outlier because it wasn't the RE market reacting to the recession but the RE market that caused the recession. What we see, which has been repeated over and over, is that as interest rates fall (which is done to help fight the recession) the RE market responds and values increase. That is also within the historical perspectives of the past that did not have anywhere near the imbalance of supply and demand that have now and will continue to have for a number of years.
I can't stress enough how badly I think you are off on this hope of a buyers market.
Chadstroma
Footballguy
Many states do have limits on what the counties can do with property taxes but I am sure not all do.
Chadstroma
Footballguy
Most states have elderly exemptions and freezes. A quick search for Ohio shows that there is apparently not one of them but there is currently a bill called 70 for 70 or something like that that would provide frrezes for elderly.
Stoneworker
Footballguy
It's fine. I spent 20 years in senior financial positions in commercial real estate. I am also very aware of interest rates. And having done billions in both equity and debt transactions, I am also well aware of how the brokerage community works.
Carry on with your sales campaign.
Chadstroma
Footballguy
Nearly 70% of prospective buyers would buy a haunted house if it checked all their boxes
Oct 24, 2023Zillow survey finds 35% of prospective buyers would buy a haunted house if it cost less
- Four in 10 prospective buyers could be convinced to buy a haunted house if it had the right features.
- Nearly 30% of prospective buyers say they would be more likely to purchase a home if it were haunted.
- Among successful buyers, 12% are convinced their home is definitely haunted.
More than two-thirds of prospective buyers (67%) say they could be convinced to buy a haunted house if it had appealing features, were in the right location, were more affordable or for another reason. These findings highlight the extreme compromises buyers are willing to make in order to land a home in today's housing market.
Zillow's survey of prospective buyers finds that 40% say they could be convinced to buy a haunted house if it had features such as a big backyard, a pool or a two-car garage. Nearly one-third of prospective buyers (32%) say the same if the home were in their desired location. Finding a home that checks all the boxes has become challenging with frighteningly few new listings hitting the market. Zillow's latest monthly market report finds that inventory is starting to creep back up, but it remains more than 10% lower than this time last year, and more than 40% lower than 2019 levels.
More than one-third of prospective buyers (35%) say they could be convinced to buy a haunted house if it were priced lower than the rest of the market. Home values remain near record highs after the pandemic-era run-up in prices. Meanwhile, mortgage rates surpassed a 22-year high this month, slashing buying power and spooking many would-be home shoppers. A new Zillow analysis finds buyers now need a six-figure income to comfortably afford the typical U.S. home, assuming a 10% down payment.
"The combination of high prices, limited inventory and rising interest rates is creating a witches' brew of trouble for would-be homeowners," said Manny Garcia, a senior population scientist at Zillow. "Despite these chilling conditions, life events like job changes, coupling up and having children still drive households to buy. These shoppers have to square their budgets with important home characteristics like bedrooms, bathrooms and floor plans. When balancing so many priorities in an inventory-starved market, avoiding ghosts and ghouls doesn't always make the cut."
In order to afford a home, many buyers end up trick-or-treating at the bank of Mom and Dad. A new Zillow report finds that 43% of recent buyers received a gift or loan from family or friends to help finance their down payment. Others are seeking out down payment assistance programs, which are listed on every for-sale home on Zillow. To reduce monthly mortgage costs, 45% of buyers are paying more money up front to buy points and lower their interest rate, according to a survey by Zillow Home Loans.
There are new tools helping buyers better understand what they can afford. Mortgage and affordability calculators can help shoppers set a budget. Those shoppers can then search for homes by monthly cost instead of by sticker price when they are shopping on Zillow. Teaming up with a great agent and lender can also help manage the fear factor.
For some brave souls, an otherworldly roommate can be a selling point. Nearly 30% of prospective buyers say they would be more likely to purchase a home if it were haunted (29%), while 20% say ghostly apparitions wouldn't impact their purchase decision.
Either way, buyers may not know who is haunting the halls of their dream home. A Zillow analysis finds most states don't require sellers to disclose paranormal activity in the home they're selling. A spine-tingling 12% of successful buyers say their home is definitely haunted, while an additional 17% say their home may be harboring spirits.
Chadstroma
Footballguy
I could take some digs at you based on that as I have known a ton of guys like you but I am not a jerk like that. Have a great Halloween.
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