An Article For Anyone Planning On Buying A Home

[Chopsticks]

I just bought a home for 6.3% and thought I got burned since just in March homes were going for 5.6%-5.8%. I thought new home owners would appreciate this article...



http://story.news.yahoo.com/news?tmpl=story&u=/usatoday/20040527/bs_usatoday/howhighcantheygo

 

[SixFive]

acehistr8, if I remember correctly, u recently bought a house in D.C. Maybe it's time to sell already and make a quick profit, u think? Also, anybody paying 275,000 bucks for a 700 square foot abode is smoking crack.

 

[AR182]

chopsticks,

it always makes everybody feel good when they realize that they got a lower interest rate than their friend or neighbor.

but unless we are talking about a huge mortgage, the difference in monthly payment between 5.8% & what you got is not big.

i haven't seen any bidding war on a purchase but did see one (wish it was one of mine-lol) on a rental. the war raised the rent by about $400 more than the asking price.


good luck on your new house.

 

[skulldog]

6-5, houses, condos etc are lot more expensive in the NE, than in kentucky, having said that, I wouldn't pay it either.

 

[AR182]

skulldog,

would you say that the property in the north east is the most over value in the country ?

of course it's based on supply & demand.

 

[SixFive]

6-5, houses, condos etc are lot more expensive in the NE, than in kentucky, having said that, I wouldn't pay it either.

I understand they are more expensive, but a bidding war over 700 square feet??

Lots of expensive property in the bay area too, AR, so not sure where the most expensive properties are.

 

[Chopsticks]

AR182

AR182

I have to disagree with you bro...5.8% and 6.3% over a 30 year note is a big difference needless to say the home I just bought is around 150K...I know, it's not as much as some of the board members here, but it's small/big enough for me and the 2 kids...Anyway, thanks for the best wishes and maybe I'll finally make it out to AZ someday to have a few beers with ya...

 

[marine]

Every day I see the real estate section down here in the beltway I consider myself lucky to have jumped in when I did and bought a home.

Of course, every weekend paper down here has the list prices for all the homes that sold in the baltimore region and their addresses..... every house that is similar in style to mine is selling for 30k less than what I paid for mine.
All I did was meeting the asking price too! :shrug:

 

[dawgball]

If there is a bidding war on property like this, you probably shouldn't be one of the bidders. This is the difference between someone who makes 3-7% per year on their home and someone who makes 30-300% on their home. It sounds like it is a seller's market there, so it would probably not be wise to buy unless you are trying to flip it quickly.

Remember, you make money on a home when you buy it, not when you sell it.

Just my opinion.

 

[AR182]

chopsticks,

i was only talking about the difference on a monthly payment. of course it is a big difference over 30 years, but chances are that well before those 30 years are up, you would have re-financed your mortgage a few times. that is why i have 5 year mortgages because of the refinance factor.

btw, there is nothing wrong with 150g house. you should be proud that you bought a house, no matter the cost.

1st 2 are my pleasure when we do hook up!!

 

[MadJack]

this kinda scares me as i've just contracted to have a new home built last week. my construction loan is 6.25 but he told me construction loans are usually higher than the mortgage loan (if that's what you call the loan you get after the home is built). it's going to take approx 5 months before i can move in and get my regular loan.

i'm going to sell the home i'm living in now but i have to live here for 2 years (november 9 makes 2 years) or pay capital gains tax.

i called my realtor yesterday to ask him some of these questions but he didnt return my call yet so i thought i'd throw it out here.

- should i list it now and add to the contract they can't move in until november?

- what is the capital gains tax now? someone told me 15% but i think that's wrong. even still, the 15% + the cost of selling through a real estate company = about 10% with their commission, closing costs, etc. ouch! (i'm not going to go thru all the stuff dawgball did to sell. i just want to list and not do a damn thing except go to closing and get my money)

the market being what it is i might get a lot more for this house if i sell it now rather than in october?

any guesses what the interest rates will be in november?

i have 5.12 now but the way i got it down was to finance with a fixed rate with a 5 year balloon and plan on doing the same on the new house. are there ways to get even a cheaper rate without going to adjustable rate? a 3 year balloon works for me too.

i just thought i'd throw this up to the experts around here and get some opinions.

thanks in advance for any help.

we're talking mid 6 figures if that matters, on the sale and new home.

 

[kneifl]

Interest rates

Interest rates

Don't expect them to be too much different Jack. I've been in real estate advertising for the last 3 yrs and have not seen them go up or down more than one point within the 4.5-5.5% rate (actually they have stayed within that bracket). Good luck with your new home.

kneifl

 

[MadJack]

kneifl, i hope you're right but i keep hearing the opposite from the so called experts. man, if the rates hit 7%+ when i need my loan, i'm gonna be fawked.

is there any way to get the regular loan before the house is final inspected? any way to lock in a rate 5-6 months early?

 

[Chopsticks]

To my understanding, I thought the rate was locked in the day of your approval...Whatever the rate is at that day...Then again, I bought a spec home and did not have it built...Best of luck with your home Jack...

 

[dawgball]

This information is with limited knowledge. My wife and I are looking at a new construction in Nashville that will be completed in October. We would not be able to get a loan finalized until the construction is complete. This may be slightly different from your situation because we are buying from a developer where it sounds like you hired a contractor.

There are ways to lock in rates. The longer that you want to lock in a rate for, the more up-front money your lender will charge.

I don't know if this is up-to-date or not.
Capital Gains article

 

[TAZ]

Some input:

i'm going to sell the home i'm living in now but i have to live here for 2 years (november 9 makes 2 years) or pay capital gains tax.
(Correct, you must meet the two years use test to exclude the maximum gain on your sale)

- should i list it now and add to the contract they can't move in until november? (Not a realtor, but I would think that if it was a high demand area, you may get someone who wants to lock in a place, no extra charge to list longer)

- what is the capital gains tax now? someone told me 15% but i think that's wrong. even still, the 15% + the cost of selling through a real estate company = about 10% with their commission, closing costs, etc. ouch! (i'm not going to go thru all the stuff dawgball did to sell. i just want to list and not do a damn thing except go to closing and get my money)
(As long as you meet the 2 years test, you can exclude $250k (500k on a joint return) of gain, ie no tax paid and unlike prior to 1997 you are under no obligation to buy another home for the deferral. If you do not meet the test, or the gain exceeds the exclusions I mentioned, the gain goes on your schedule D and is taxed at 15%)


any guesses what the interest rates will be in november? (This will vary based on location. In OH the rate on a 30 year no points has gone from 5.25 to 6.25 in the past 3-4 months, I don't see them going down at all, lock in if possible. Check the 10 year Treasury note, it is a good indicator of the mortgage rate changes)

i have 5.12 now but the way i got it down was to finance with a fixed rate with a 5 year balloon and plan on doing the same on the new house. are there ways to get even a cheaper rate without going to adjustable rate? a 3 year balloon works for me too. (If you only plan on a 3-5-7 year stay, a baloon or ARM that is fixed for a number of years is a good way to go. If you want to get real agressive and know you will definately not stay more than 5 years or so, you could go Interest Only. If this is where you will stay for a while, compare the total cost of all options, by that I mean total principal and interest for 15-20-30 years)

Good Luck!

 

[skulldog]

Jack, kneifl is right regarding the tax. I've been a realtor for 16+ yrs and shouldn't be paying 10% to sell your home including closing costs.

Ex. $ 300,000 sales price
$ 15,000 commission
$ 1,400+- (in MA we have tax stamps so I used our #)
$ 1,000 MIsc recording fees, etc.

Unless your state has some of the craziest fees when you sell you should be far less than 10%.
As far as when you list your home, you should be able to get that from your realtor, if not, find another realtor fast!!
If you were my client and selling in Ma, for a end of Nov closing date I would list your property on Sept 1, even if the market is red hot. We've all been told no before, so should a buyer want to move before 11/9, you simply tell them NO and if they want it bad enough, they'll make arrangements.

I wouldn't be overly concerned w/% rates until next year, well all know you can afford it anywayLOL.

You can get a 3/1 Arm where it is fixed for the first 3 years and turns into a 1 year ARM, or whats becoming popular is % only loans. Check w/your mortgage broker or lender.

AR, It's have to say, certain parts of FLA properties are appreciating 33%, but the prices were dirt cheap to begin with. The multi-family market up here is crazy, 3 families are selling over 400K, w/rents for a 3br, @ 1600.

GL



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[kreationz]

Madjack,

As a loan officer, from my knowledge there is no program out there where you can lock the rates for up to 5-6 months.

A great option to go if interest rates are high when u plan on getting a regular mortgage loan is to get a 5/1 or 7/1 ARM.

Or go with a Interest Only program. This way your rate will be roughly around 3-4%. Your monthly minimum payment would only be at 3-4% that would be paying off just your interest rate, but just pay more than the minimum each month and that extra will go straight towards your principle balance. thus in essence... you pretty much got yourself a standard Principle & Interest mortgage loan at 3-4% !!! (This is a loophole that many people dont know about... very powerful tool to take advantage of for new home buyers)

hope this helps