Subject to 3rd party approval (Silver Spring, Bethesda: sales, foreclosure, mortgage)

[TeamBenya]

lscalder- I can absolutely run Montgomery county into the stat breakdowns. I should have it analyzed and posted by Friday.

[1973 Forced Busing]

Next 10 things that I purchase I'll tell the seller "price should not be your driving factor" and I'll report back to you what they told me. I'm thinking it will work wonders at the grocery store!

[TeamBenya]

Originally Posted by 1973 Forced Busing

Next 10 things that I purchase I'll tell the seller "price should not be your driving factor" and I'll report back to you what they told me. I'm thinking it will work wonders at the grocery store!

Be my guest! Let them know that you also plan to purchase it with a bank backed mortgage as well, or else your argument is moot! Groceries and homes aren't purchased the same way unless you're purchasing the home all cash!

In all seriousness, think about what you're saying here. Let's suggest that you're buying a home for $450k, right now.

Price: $450,000
Interest Rate: 5%
Loan Type: 30/fixed
Down Payment: 0
Annual Insurance: $1,935
Annual Property Tax: $5,400
Monthly Income: $5,000
Monthly Debt: $1,200

How much will the monthly payment be?
$3,026.95

By your argument, the price should be the driving factor. No problem, let's see what would happen when you decide to wait because "the prices are falling", and the interest rates rise (keep in mind we're at a historic low on interest rates right now, folks. The traditional average is 7%)

Price: $420,000 (hey, the price of the home is cheaper now!)
Interest Rate: 6.5% (ok, the rate went up a little, it's still lower than average, so no big deal, right?)
Loan Type: 30/fixed
Down Payment: 0
Annual Insurance: $1,806 (Cheaper insurance now, that should help)
Annual Property Tax: $5,400 (The annual tax bill is cheaper, too!)
Monthly Income: $5,000
Monthly Debt: $1,200

Anyone care to guess how much money your gonna spend on the monthly payment now that the home, insurance and tax is cheaper?

$3,225.19


So, you just got the home for 7% LESS by waiting. Good for you! You're going to pay an extra 6.5% EVERY MONTH because this house was cheaper. Why? Because you weren't looking at the rate. What happens if you don't want to/can't stretch an extra $200/mo? Well, you're going to have to find a smaller house for less money in order to be able to buy. If you had bought the home when it was more expensive, you would have been able to afford it.

Go buy the house all cash, and you've saved a bundle! But if you're financing (as most people do), then you've just made yourself a gigantic sucker because you assumed that the price was more important than the rate(anyone else out here remember when the rates were over 12%?).

I'm not saying to quit looking at the price. The price is the benchmark for affordability, period. But if you're looking to save as much money as possible, you need to consider how you're going to do that. Ignoring the current interest rate as a major factor is a BIG mistake.

[FrankLaw]

How long do these 3d party approval/short sales typically take? I saw a property that's interesting, but I don't know if I want to be tied up waiting for two months for an offer on it to get approved.

[1973 Forced Busing]

Merchant called police on me, told me not to trust your advise. He also advised me that your team buys houses for 1/2 price and you keep those deals for yourself! He even gave me the link to it!

results

[TeamBenya]

1973- I'm not sure I understand your point.

1) The home was purchased by my father, not myself, and I was not a party to the transaction.

2) The house that you're talking about was purchased at market value. Had you seen the house personally you would understand the details. It's very convenient to play armchair quarterback, but the house you're referring to was deemed unlivable when it was purchased.

3) There was standing water in the ductwork because the ducts had been poured into the slab and water seeped in from underground in heavy rain. There was no way that the house could be considered livable because of the health concerns. In fact, that property required a wall-to-wall gut and complete replacement of the HVAC system in order to be eligible for use and occupancy.

Are you seriously suggesting that a 1,500sf rambler home in the carrington subdivision that required a total gut rehab was worth $310k 3 years ago?

[vanyali]

Originally Posted by TeamBenya

Be my guest! Let them know that you also plan to purchase it with a bank backed mortgage as well, or else your argument is moot! Groceries and homes aren't purchased the same way unless you're purchasing the home all cash!

In all seriousness, think about what you're saying here. Let's suggest that you're buying a home for $450k, right now.

Price: $450,000
Interest Rate: 5%
Loan Type: 30/fixed
Down Payment: 0
Annual Insurance: $1,935
Annual Property Tax: $5,400
Monthly Income: $5,000
Monthly Debt: $1,200

How much will the monthly payment be?
$3,026.95

By your argument, the price should be the driving factor. No problem, let's see what would happen when you decide to wait because "the prices are falling", and the interest rates rise (keep in mind we're at a historic low on interest rates right now, folks. The traditional average is 7%)

Price: $420,000 (hey, the price of the home is cheaper now!)
Interest Rate: 6.5% (ok, the rate went up a little, it's still lower than average, so no big deal, right?)
Loan Type: 30/fixed
Down Payment: 0
Annual Insurance: $1,806 (Cheaper insurance now, that should help)
Annual Property Tax: $5,400 (The annual tax bill is cheaper, too!)
Monthly Income: $5,000
Monthly Debt: $1,200

Anyone care to guess how much money your gonna spend on the monthly payment now that the home, insurance and tax is cheaper?

$3,225.19


So, you just got the home for 7% LESS by waiting. Good for you! You're going to pay an extra 6.5% EVERY MONTH because this house was cheaper. Why? Because you weren't looking at the rate. What happens if you don't want to/can't stretch an extra $200/mo? Well, you're going to have to find a smaller house for less money in order to be able to buy. If you had bought the home when it was more expensive, you would have been able to afford it.

Go buy the house all cash, and you've saved a bundle! But if you're financing (as most people do), then you've just made yourself a gigantic sucker because you assumed that the price was more important than the rate(anyone else out here remember when the rates were over 12%?).

I'm not saying to quit looking at the price. The price is the benchmark for affordability, period. But if you're looking to save as much money as possible, you need to consider how you're going to do that. Ignoring the current interest rate as a major factor is a BIG mistake.

I don't see rates going back up anytime soon. At least, the Fed isn't raising rates, and since we're going into a recession, I don't think the Fed is going to start raising rates anytime in the foreseeable future. The US economy right now looks a lot like Japan right before going into a decade-long period of stagnation, during which time interest rates remained insanely low.

[Joykins]

I don't think anyone is loaning at 0% down anymore except maybe VA--are they??? Best you could hope for is 3% down with FHA?

[vanyali]

Originally Posted by Joykins

I don't think anyone is loaning at 0% down anymore except maybe VA--are they??? Best you could hope for is 3% down with FHA?

Adding a downpayment to the calculation doesn't really change his point at all.

[Jaded]

Originally Posted by Joykins

I don't think anyone is loaning at 0% down anymore except maybe VA--are they??? Best you could hope for is 3% down with FHA?

If you have superior credit you will still qualify for 0% down. Banks are still lending to borrowers with A and B credit.

I think the problem with the housing market now has a lot to do with speculators and homeowners whose credit wasn't up to par at the time they purchased...interest rates rose on their adjustable rate mortgage and their monthly payments went through the roof...sloppy lending standards by subprime lenders. Now, they are in debt (taking out seconds and thirds assuming their homes would appreciate), and their credit probably never improved and is now worse than when they bought the home; refinancing is not even an option for most of these borrowers.

But, the Bush administration just announced that major lenders have agreed to stall foreclosures for 30 days with hopes of renegotiating the terms of the loans of those in trouble. Don't know if this will help or not.