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That is fraud. Besides, you may have bought another house before your credit took a nose dive, but you will still be stuck if you need to purchase anything else..like a car.
Not everyone has the means to buy another house before they walk.
Well, then don't expect to be able to buy another house for a long, long time because your credit will be really bad...
Well, then don't expect to be able to buy another house for a long, long time because your credit will be really bad...
In markets where this strategy makes sense, there would be no point in moving again in the 2-3 years it'll take for their credit to recover. Prices will continue to drop and won't recover for several years after that.
In markets where this strategy makes sense, there would be no point in moving again in the 2-3 years it'll take for their credit to recover. Prices will continue to drop and won't recover for several years after that.
The credit guidelines have really changed. I don't think people can expect their credit to recover in 2-3 years anymore ... at least where home purchases are concerned.
My friend was just turned down for a mortgage due to a foreclosure she had four years ago.
The banks are taking such huge losses ... they're really getting picky. The days when people could rebuild their credit in a couple of years and buy a house again may be gone ... at least for now.
'Well, then don't expect to be able to buy another house for a long, long time because your credit will be really bad...'
Gee thanks for the tip oh master of the obvious
In severely impacted areas ( like where I am, Riverside/ San bernardino counties of SoCal), there will be a long recovery no matter how many times people say it will be a V shaped one. I am talking 6-10 years. By that time anyone's credit should be restored.
Prices in Riverside and Corona are near bottom. I just saw a 5 bedroom, 2400sqft house brand new construction in Corona for $250,000 Very nice house. I think prices here have settled.
Prices in Riverside and Corona are near bottom. I just saw a 5 bedroom, 2400sqft house brand new construction in Corona for $250,000 Very nice house. I think prices here have settled.
Woo hoo! ... we're at or around bottom out here... even k374 admitted it
So, I guess it is way bellow Humanoid's Criteria of PITI being bellow 10% rent... So I was kinda wrong that rents can't get higher than PITI. But if it is that much bellow rent, and the area is alright and has future prospects... I don't see why an Investor wouldn't snatch the place up.
This house at 250k is 3.7X income for the area... far lower than the historical 4X Income in 2002 for Riverside/San Bernardino (when it was 7% interest rates). Bonus table
Can't use appreciation formula since I don't know what it was worth in 2001/2002.
But, as far as the other criterias, this house Is affordable. So, k374, what's wrong with it? And if it's fine... why not move from OC to Corona, and commute on the 241 (45min)? I'm sure the equivalent dwelling in OC is considerably more
So, I guess it is way bellow Humanoid's Criteria of PITI being bellow 10% rent... So I was kinda wrong that rents can't get higher than PITI. But if it is that much bellow rent, and the area is alright and has future prospects... I don't see why an Investor wouldn't snatch the place up.
This house at 250k is 3.7X income for the area... far lower than the historical 4X Income in 2002 for Riverside/San Bernardino. Bonus table
Can't use appreciation formula since I don't know what it was worth in 2001/2002.
But, as far as the other criterias, this house Is affordable. So, k374, what's wrong with it? And if it's fine... why not move from OC to Corona, and commute on the 241 (45min)? I'm sure the equivalent dwelling in OC is considerably more
-chuck22b
I see your logic but ... with one major problem.
Who has 20 percent cash ($50K) to put down in this economy? Not too many people. And what about taxes and insurance? You're not counting those either.
I'd be interested to see what the numbers look like with a 3 percent down FHA loan with taxes and insurance. That's the vast majority of loans these days anyway.
Who has 20 percent cash ($50K) to put down in this economy? Not too many people. And what about taxes and insurance? You're not counting those either.
I'd be interested to see what the numbers look like with a 3 percent down FHA loan with taxes and insurance. That's the vast majority of loans these days anyway.
Ok, your wish is my command... FYI, PITI includes taxes And insurance (principal, interest, tax, insurance).
With a 3% down I get:
Purchase price: 250k
Down Payment (3%): 7.5k
Yearly Property Tax (1.3% of purchase price): 3200
Yearly Home Insurance: $400
PMI: 1,212/year
Gives you: $1,934 / month with a 6.5% interest rate
Which, is still less than renting a 5 bedroom place.
So, I guess it is way bellow Humanoid's Criteria of PITI being bellow 10% rent... So I was kinda wrong that rents can't get higher than PITI. But if it is that much bellow rent, and the area is alright and has future prospects... I don't see why an Investor wouldn't snatch the place up.
I don't know why you make the same mistakes again and again, but you do. The median rent is of no concern. You need to know what the exact property in question would rent for, this could be much different than the median (In fact it usually is). Regardless, you can find some cases in the inland empire where the PITI is just a bit above current rent. But its the exception rather than the rule and there is also the question of declining rents. I really don't know if the rents in the inland empire are inflated or not, but they are in Orange, Los Angeles, Ventura, San Diego counties.
Furthermore, the "formula" I gave is just a way to estimate fundamental value other factors do need to be considered. As prices get closer to such estimate you can refine matters by looking at inventory etc. If inventory is high and foreclosure activity is still high then prices will likely fall more.
Anyhow, generally a bottom forms when investors can buy up properties and get good cash-flow out of the properties (of course this corresponds closely with the PITI being reasonably below the rent). But down markets often over correct, not only that the conditions in this market are different in important ways. Without easy access to credit investors' ability to form a bottom by buying up deals will be greatly reduced. This isn't to say that a bottom won't form, but it may be lower than before because cash investors will form it.
I don't know why you make the same mistakes again and again, but you do. The median rent is of no concern. You need to know what the exact property in question would rent for, this could be much different than the median (In fact it usually is). Regardless, you can find some cases in the inland empire where the PITI is just a bit above current rent. But its the exception rather than the rule and there is also the question of declining rents. I really don't know if the rents in the inland empire are inflated or not, but they are in Orange, Los Angeles, Ventura, San Diego counties.
I know, median may not even be close to what "that" property will rent for... I don't have an address or any more information than that it's in Corona, and that it has 5 bedrooms. That's why I asked if the area was "alright" and/or had future prosects... If the place is surrounded by foreclosures.. and the builder ditched the place... and there's absolutely zero hope for any recovery in the area... than Of course... even if it's the best deal in the world.. it'd still suck. So, generally speaking, I had to use a median "Corona" vacinity median rental price for a 5 bedroom unit.
In the most part... from what I've experienced of the "newer" parts of Corona... the new areas of Corona are fairly nice. Furthermore, Corona is an industrial job center and has fairly easy access to Orange County.
Quote:
Furthermore, the "formula" I gave is just a way to estimate fundamental value other factors do need to be considered. As prices get closer to such estimate you can refine matters by looking at inventory etc. If inventory is high and foreclosure activity is still high then prices will likely fall more.
Exactly! like I said, it's not just affordability but also other area analysis. But, reaching affordibility is a very good step toward a bottom. IMO, I think Corona in the long term will do fine. The area isn't boonies enough like Yucaipa or Palmdale to not recover from the housing bust in the long term.
Quote:
Anyhow, generally a bottom forms when investors can buy up properties and get good cash-flow out of the properties (of course this corresponds closely with the PITI being reasonably below the rent). But down markets often over correct, not only that the conditions in this market are different in important ways. Without easy access to credit investors' ability to form a bottom by buying up deals will be greatly reduced. This isn't to say that a bottom won't form, but it may be lower than before because cash investors will form it.
True, hince why I said I felt that Credit Markets are "tighter" now than they probably were pre-bubble. If they returned back to "pre-bubble" levels than historical affordability levels should easily be reached. Slowly, the credit markets are slightly improving. Banks will definitely fail... but we saw banks fail in the S&L crisis (200+ banks).... eventually the credit markets will improve.
According to the TED spread... it's bellow 1 and hasn't hit way above 2 like it did last year August when all this really escalated. Bloomberg.com: Investment Tools
-chuck22b
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Very nice house. I think prices here have settled.
