U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > North Carolina > Charlotte
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 07-02-2012, 06:51 AM
 
5,881 posts, read 7,735,164 times
Reputation: 3372

Advertisements

Quote:
Originally Posted by frewroad View Post
I'm glad you finally agree with me. This is what I stated above.
No it's not.
Reply With Quote Quick reply to this message

 
Old 07-02-2012, 06:52 AM
 
22,769 posts, read 26,198,481 times
Reputation: 14558
Quote:
Originally Posted by Rollingon View Post
Considering current scenario in Charlotte where housing market 'might' have bottomed out but job market and economy is still fragile. For those who have "diligently saved 20%" for a downpayment does it make sense to put it all down?? (This is not a debate for buying v/s renting)
generally speaking i wouldn't put 20% down, if i didn't have to. i suppose it depends on the terms of the loan, and whether or not PMI comes into play.
Reply With Quote Quick reply to this message
 
Old 07-02-2012, 07:06 AM
 
22,769 posts, read 26,198,481 times
Reputation: 14558
Quote:
Originally Posted by frewroad View Post
I simply said that buying a $100K house in the 1980s (which you first mentioned) was more difficult than buying a $250K house in the 2000s. (which you also mentioned) The statement proved to be true using numbers, that you provided.
that $100k house bought in the 1980's could've been refinanced into a lower interest rate as time went on. the payment would've gotten MUCH cheaper in real dollars, VERY quickly. Housing was a great investment back then.

Now rates are low, and housing is not a very good investment. You won't be able to refinance at lower rates 3 or 5 years from now. Mortgage lending standards are tightening, not loosening, which puts downward pressure on housing. (The reverse of the 1980 - 2006 cycle.)
Reply With Quote Quick reply to this message
 
Old 07-02-2012, 07:13 AM
 
Location: Wouldn't you like to know?
9,114 posts, read 15,666,769 times
Reputation: 3695
Quote:
Originally Posted by le roi View Post
that $100k house bought in the 1980's could've been refinanced into a lower interest rate as time went on. the payment would've gotten MUCH cheaper in real dollars, VERY quickly. Housing was a great investment back then.

Now rates are low, and housing is not a very good investment. You won't be able to refinance at lower rates 3 or 5 years from now. Mortgage lending standards are tightening, not loosening, which puts downward pressure on housing. (The reverse of the 1980 - 2006 cycle.)
Historically "housing" (ie to live in) has never been a great investment.

If you've been lucky to purchase in a time period (and sell) when appreciation was good, then good for you. That should not blind your thinking that housing SHOULD be a great investment. For over 100 years, homes on average appreciate at around the rate of inflation.

Homes should be something to live in and not be counted on for a retirement nest egg.....

only 4 years ago the NAR was posted very misleading information just like this...

Oh how soon they forget and erase it from their website....lol


http://blogs.wsj.com/developments/20...at-investment/

Last edited by CouponJack; 07-02-2012 at 07:26 AM..
Reply With Quote Quick reply to this message
 
Old 07-02-2012, 07:52 AM
 
295 posts, read 453,259 times
Reputation: 198
One basic argument voiced by those supporting 20% down is there are no other investment vehicles that breach the 4% yearly return barrier. But what if such an option exists!! Can anyone shed light on such options.

Another point is if most agree we have the least interest rates and low prices then the only way the prices can go are either up or remain stagnant. By no stretch of imagination I think the prices will spiral upwards but one thing is guaranteed it will creep north. In which case doesnt it make sense to have the bare minimum down payment and use that smallest amount possible to leverage against the possible uptick in real estate prices. Else my 20% downpayment will stagnate along with stagnant property prices without even correcting for inflation. Inflation in the near future is a given.
Reply With Quote Quick reply to this message
 
Old 07-02-2012, 07:54 AM
 
22,769 posts, read 26,198,481 times
Reputation: 14558
Quote:
Originally Posted by CouponJack View Post
Historically "housing" (ie to live in) has never been a great investment.
We had some structural changes in the economy -- changes in monetary policy in the 1970's, tax policy in the 1980's, housing policy in the 1990's, banking policy in the 2000's.... which combined to make housing a great investment between about 1980 and 2006.
Reply With Quote Quick reply to this message
 
Old 07-02-2012, 08:01 AM
 
22,769 posts, read 26,198,481 times
Reputation: 14558
Quote:
Originally Posted by Rollingon View Post
One basic argument voiced by those supporting 20% down is there are no other investment vehicles that breach the 4% yearly return barrier. But what if such an option exists!! Can anyone shed light on such options.
"4% yearly return barrier" is artificial because it assumes that your home (and your 20% ownership of it) will at least maintain its value.

so the idea that a downpayment is equivalent to a risk-free 4% return is inaccurate analysis IMO.



Quote:
Another point is if most agree we have the least interest rates and low prices then the only way the prices can go are either up or remain stagnant.
Prices can go lower, and if rates go higher, then prices almost certainly will go lower.

Quote:
By no stretch of imagination I think the prices will spiral upwards but one thing is guaranteed it will creep north.
This is not guaranteed. Just look at Japan -- real estate prices there have been falling since 1989.

Quote:
In which case doesnt it make sense to have the bare minimum down payment and use that smallest amount possible to leverage against the possible uptick in real estate prices. Else my 20% downpayment will stagnate along with stagnant property prices without even correcting for inflation.
Correct.

Quote:
Inflation in the near future is a given.
The question is: inflation of what?

Inflation of healthcare prices? food prices? Energy prices? Probably.

Inflation of home prices? Inflation of wages? Not likely.
Reply With Quote Quick reply to this message
 
Old 07-02-2012, 08:29 AM
 
Location: The Triad (NC)
28,482 posts, read 62,084,629 times
Reputation: 32131
Quote:
Originally Posted by le roi View Post
generally speaking i wouldn't put 20% down, if i didn't have to.
i suppose it depends on the terms of the loan, and whether or not PMI comes into play.
Well, gee whiz folks! Why didn't anyone else point this out?

leroi... pmi *IS* the issue and the fulcrum point for all down payment decisions.
Aside from a few first time buyers with substantial family gifts (40:200?)...
move up buyers attempting to shift equity from their current property
while seeking conventional loans are about the only buyer for whom the choice even exists.

Would anyone else put down more than they had to in order to make a deal happen?
Maybe if they're sitting on a pile of cash and don't have the income to support a higher mortgage.
I can't think of anyone else though.
Reply With Quote Quick reply to this message
 
Old 07-02-2012, 08:30 AM
 
3,914 posts, read 3,953,446 times
Reputation: 1272
Quote:
Originally Posted by Feltdesigner View Post
I'd rather pay down credit card debt before aggressively paying down my mortgage....
This is what is meant by paying down short term debt in the rule that I gave above. Once it is paid off, only use credit cards for convenience and pay off the balance each month. Otherwise they are a legal means for the finance industry to bleed you completely dry.

Obviously you have to pay off obligations and other similar items. This is also why you keep a year's buffer in savings for these sorts of things. Once you extract from it, the priority is to build it back up again.

I also advise that before keeping money in a bank in any kind of timed savings to get a better return that people should purchase inflation protected savings bonds. I-bonds. They pay at least the CPI, plus potentially a set rate. Currently these bonds are paying 2.2% and the rate resets 2x year. As an added bonus, there are no NC taxes on this money. There is a limit however of $10,000/year per SS#. As of this year you can also receive your tax refund in these bonds. If you redeem the bond before the 5 year maturity, you only lose 3 months interest.
Reply With Quote Quick reply to this message
 
Old 07-02-2012, 08:35 AM
 
5,881 posts, read 7,735,164 times
Reputation: 3372
Quote:
Originally Posted by MrRational View Post
Well, gee whiz folks! Why didn't anyone else point this out?

leroi... pmi *IS* the issue and the fulcrum point for all down payment decisions.
Exactly...I'm still anxious to find out how Sigma67 had no PMI when putting 3.5% down

edit: Unless of course it was just a joke and he/she got an FHA that doesn't have PMI...it has MIP
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:



Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > North Carolina > Charlotte
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top