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Old 03-20-2011, 11:37 AM
 
262 posts, read 757,816 times
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Subprime Primer: The Subprime Mortgage Primer

(warning: this cartoon slideshow has a few curse words in it)
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Old 03-20-2011, 11:48 AM
 
Location: Northern Virginia
175 posts, read 388,332 times
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It is also spring and new people will also be looking for houses
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Old 03-20-2011, 12:00 PM
 
Location: among the clustered spires
2,380 posts, read 3,859,685 times
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I'd like to see some sort of compromise where people who are underwater and the banks split the loss.

Right now, short sales are a PITA (less so than 2 years ago) and banks' unwillingness to deal cleanly with them are trapping folks in homes and hindering the timely functioning of the market.
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Old 03-20-2011, 12:13 PM
 
262 posts, read 757,816 times
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Purchase price vs. long-term Cost of Ownership:

A valid counterpoint to what I argued above: If Prices Are Falling, Why Are the Rich Buying?

Quote:
Why would the wealthy be starting to purchase especially when everyone is predicting that prices will soften? The people of wealth understand finances. They realize that the COST of real estate is a much more important than its PRICE. With the government attempting to make massive changes to the residential lending business, the wealthy know financing a home may never be better. They realize it is time to buy. They can purchase a million dollar+ home for a rate lower than at almost any time in history.
Rates are at historic lows and the spread for jumbo loans has shrunk dramatically. As CNN Money explained:
Normally buyers have to take out a jumbo loan to finance any mortgage beyond the $417,000 threshold (http://www.fanniemae.com/aboutfm/loanlimits.jhtml - broken link) ($729,000 in high-cost cities such as New York). These loans have higher interest rates because they are considered non-conforming — or higher risk — and are not backed Fannie Mae or Freddie Mac.
In 2009 buyers of high-end homes paid 1.8 percentage points more in interest than the average buyer. But in 2010, that spread had shrunk to just 0.6 points more.
They can also fix that rate for 30 years. The 30-year-fixed-rate-mortgage may be a victim of the new lending reforms. Mark Zandi, chief economist of Moody’s Economics addressing the administration’s recent report on reform:
“A private system would likely mean the end of the 30-year fixed-rate mortgage as a mainstay of U.S. housing finance. A privatized U.S. market would come to resemble overseas markets, primarily offering adjustable-rate mortgages.”
(I do think, however, this argument applies more to very long term buyers, rather than someone who is only going to be in house for less than say a decade).
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Old 03-20-2011, 02:21 PM
 
Location: MID ATLANTIC
7,722 posts, read 18,513,093 times
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Quote:
Originally Posted by ACWhite View Post
That estimate seems quite high. Move up buyers likely won't use those.
It probably is........but we are seeing way more than normal FHA transactions over 417K - significantly more. I recently had a sale in Lorton where the appraisal came in 15K low - 550K sales price. The appraiser used six comps. ALL closed sales in that neighborhood were VA and FHA loans. I even offer 80/15/5 and 80/10/10, but the number of FHA buyers, buying homes over 1/2 million with less than 5% down is absurd. But so is a mortgage insurance payment of $540 a month.
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Old 03-20-2011, 02:36 PM
 
Location: leaving Charlotte, heading to McLean
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Does any one particular price range appear to be selling faster than others?
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Old 03-20-2011, 02:45 PM
 
2,670 posts, read 4,518,379 times
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Quote:
Originally Posted by SmartMoney View Post
It probably is........but we are seeing way more than normal FHA transactions over 417K - significantly more. I recently had a sale in Lorton where the appraisal came in 15K low - 550K sales price. The appraiser used six comps. ALL closed sales in that neighborhood were VA and FHA loans. I even offer 80/15/5 and 80/10/10, but the number of FHA buyers, buying homes over 1/2 million with less than 5% down is absurd. But so is a mortgage insurance payment of $540 a month.
Yes, I think the use of FHA or VA depends a lot on the neighborhood you're looking in.
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Old 03-20-2011, 04:30 PM
 
Location: New-Dentist Colony
5,738 posts, read 8,937,269 times
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Quote:
Originally Posted by SmartMoney View Post
It probably is........but we are seeing way more than normal FHA transactions over 417K - significantly more. I recently had a sale in Lorton where the appraisal came in 15K low - 550K sales price. The appraiser used six comps. ALL closed sales in that neighborhood were VA and FHA loans. I even offer 80/15/5 and 80/10/10, but the number of FHA buyers, buying homes over 1/2 million with less than 5% down is absurd. But so is a mortgage insurance payment of $540 a month.
We did just this--an FHA loan for a purchase something like 50% over that purchase price you gave. Not sure what your $540/month figure comes from, but our PMI is way below that--about $200. It's tax deductible. Obviously we'd have preferred not to have to pay this, but for a 3.5% down payment, interest of less than 5%, and a 30-year fixed rate, it was worth it.

Last edited by Carlingtonian; 03-20-2011 at 04:41 PM..
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Old 03-20-2011, 05:24 PM
 
5,121 posts, read 5,530,273 times
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Well, I am sure I will find something soon. I just had to post about it because I think it's funny that I keep hearing it's a buyers market, etc. etc. A lot of my relatives who don't live in the area don't understand that this area really didn't have the housing crash that most other places did.

Anyway, I've been steering clear of short sales because I've been told they are a pain and banks drag their feet. I have some time, but not a whole lot of time to kill.

Hey, maybe I should wear a sign that says, "Buyer here, 20% down... not asking for help with closing costs."

BTW, since I sometimes get PMs about potential houses, I am looking for a garage townhouse in the Kingstown (if I can swing it), Island Creek, Lorton, or Burke areas under $400K. I really don't want a SFH, it's too much to maintain alone.
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Old 03-20-2011, 05:36 PM
 
Location: Fairfax, VA
1,449 posts, read 2,800,957 times
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Quote:
Originally Posted by jillabean View Post
BTW, since I sometimes get PMs about potential houses, I am looking for a garage townhouse in the Kingstown (if I can swing it), Island Creek, Lorton, or Burke areas under $400K. I really don't want a SFH, it's too much to maintain alone.
My friend lives in Lorton Station, the section right behind the shopping center with the Shoppers Food Warehouse. I THINK the homes are under $400K, or maybe just about? They are quite big on the inside, although the secondary bedrooms are rather small. If Lorton made ANY sense for my husband, we'd look in that direction, but not with his office in Ashburn. I work for this friend, so I drive from Reston to Lorton a few days a week (I work PT) - it takes me about 45 minutes as everyone else is coming the opposite way opn FFx Cty Parkway.
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