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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: housing market, what do you think?
Here is a great example of what I mean. Picture this car scenario, on a more larger scale (like housing).
New car purchase "buyers remorse" more than DOUBLED thanks for cash to clunkers program
The new survey by CNW Purchase Path, of Bandon, Oregon, finds that of nearly 1,000 Cash for Clunkers participants, 17 percent say they have some or serious doubts that they should have made the new-vehicle acquisition.
"Primary reason: They are now facing a $275-$350-per-month car payment that didn't exist prior to acquiring the car or truck," said the report. "That amount, they say, could negatively impact the total family budget more than expected prior to buying the new vehicle."
Message edited 9/10/2009 3:37:42 PM.
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Posted 9/10/09 3:14 PM  |
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Prudential Douglas Elliman Real Estate
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: housing market, what do you think?
Posted by ave1024
Posted by Blu-ize
The tax credit creates liquidity for people that may have been on the fence about buying. that 8K matters a lot to some.
See this is the problem I have with it. If 8k is the "make it or break it" amount for some buyers, then they probably shouldn't be buying in the first place. 8k is really not a lot of money in the grand scheme of buying a house.
Like I said above, it seems like people are willing to spend 30k more when they know they are getting 8k back.
I wonder how many of these first time homebuyers end up in foreclosure two years from now because they thought getting a free 8k from the government allowed them the financial freedom to make a 400k investment. We could be in an even worse situation two years from now than we are currently, because of this Obama credit.
It's not so easy to get approved if you are not liquid enough or have less than stellar credit. When we were looking back in 2002 the prices were going up and our downpayment all of a sudden wasn't enough. We kept having to save to keep up with the home prices because of the downpayment mostly. Most people have the biggest problem with the downpayment not the monthly payment.
If the downpayment is large enough then the monthly payment is manageable and affordable. 8K could do it for a lot of folks. I know that back in 2002 8K more would have covered my closing costs and allowed us to use that money for home improvements or just replenish our bank account or just go hog wild after having saved for so long.
Hopefully the credit markets will remain on the tigher side (although it's still pretty tight right now) and give loans to people who really can afford the home they are buying.
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| Posted 9/10/09 3:51 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: housing market, what do you think?
Posted by Blu-ize
Hopefully the credit markets will remain on the tigher side (although it's still pretty tight right now) and give loans to people who really can afford the home they are buying.
Credit markets tight? pfffffffffft! 
I spoke to a mortgage banker at BOA and we were talking affordability and DTI ratios.
He actually said that they lend up to 50% DTI for housing and 60% DTI total debt. Those are crazy high numbers and lending that loosely can get a lot of buyers in trouble. I would never buy a house who's mortgage payment + taxes would equal half my salary. Never!
Now I don't know if an underwriter will approve that, but to even come out and say they will lend that high is just nuts.
Whatever happened to 28/38%??? 
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| Posted 9/10/09 4:10 PM |
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rkoenke
my little piggys
Member since 3/08 4315 total posts
Name:
rachel
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Re: housing market, what do you think?
i certainly hope to get a third time home buyers stimulus check for 8K!!
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| Posted 9/10/09 4:28 PM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: housing market, what do you think?
Posted by ave1024
Posted by Blu-ize
Hopefully the credit markets will remain on the tigher side (although it's still pretty tight right now) and give loans to people who really can afford the home they are buying.
Credit markets tight? pfffffffffft!
I spoke to a mortgage banker at BOA and we were talking affordability and DTI ratios.
He actually said that they lend up to 50% DTI for housing and 60% DTI total debt. Those are crazy high numbers and lending that loosely can get a lot of buyers in trouble. I would never buy a house who's mortgage payment + taxes would equal half my salary. Never!
Now I don't know if an underwriter will approve that, but to even come out and say they will lend that high is just nuts.
Whatever happened to 28/38%???
To someone with excellent credit and liquidity these ratios may be considered but underwriting is another story. I doubt that many people get approved at these ratios.
The markets are tight. Credit markets are a little looser than in the past 6 months but nothing like 2-5 years ago.
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| Posted 9/10/09 4:58 PM |
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lovemy2boys
LIF Adult
Member since 10/07 3915 total posts
Name:
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Re: housing market, what do you think?
Posted by Blu-ize
Posted by lovemy2boys
I'm waiting to see what happens during the winter. we need the space now but I will wait and hope that things drop lower. 20K over 30 years is a lot of money, even tho the monthly payment isn't a lot.
If you stay in the house 30 years.
we will be there for a long time we are in our starter now.
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| Posted 9/10/09 11:36 PM |
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OStewarts
LIF Adult
Member since 11/07 1096 total posts
Name:
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Re: housing market, what do you think?
I know that you're asking specifically about home prices, but I think you also need to consider the low interest rates available right now. If we do start to see a recovery in the next year, it is likely that interest rates will rise. Just something that you need to consider as well.
Good Luck!
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| Posted 9/11/09 8:48 PM |
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DiamondGirl
You are my I love you
Member since 7/09 18802 total posts
Name:
DiamondMama
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Re: housing market, what do you think?
Posted by Blu-ize
this question has been asked over and over again.
You can't time the market. If you are ready to buy and found the home that you love then it's the right time to buy for the long term.
Waiting for it to drop another $5K is not going to make a big difference.
ITA
If you can afford NOW I would do it. Real estate is fickle and you really can't KNOW the future.
Good luck!
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| Posted 9/11/09 9:10 PM |
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