2023 Real Estate Observations (income tax, tickets, financed)

[jayrandom]

Originally Posted by matrix5k

But if you're not a first time buyer then what does it matter? How many people in this thread is a first time buyer? One or two? Is a 6.25% mortgage for first time buyer vs 6.50% a deal breaker? We're all locked into <3% mortgages anyway.

If you have more than one kid, you quickly learn that one of the things they hate the most is perceived injustice. Asking both of my daughters to do some household chore is tough, but asking only one of them is typically impossible. It works in reverse with benefits, as well. Here, I think, is a case of that. It doesn't seem fair if mortgage rates increase with creditworthiness. It will rub a lot of people the wrong way, even if it doesn't effect them directly.

Of course, everyone seems to have a different concept of what constitutes "fair". I've had people explain to my how unfair it was for insurance rates to be based on risk. They claimed it was "discrimination" against people who lived in flood zones or in places with frequent natural disasters (this person lived in coastal Florida). I'm sure there are plenty of people upset that anything is based on the credit score (or even that such a concept exists) and see this as a step in the right direction.

[simplexsimon]

Originally Posted by matrix5k

But if you're not a first time buyer then what does it matter? How many people in this thread is a first time buyer? One or two? Is a 6.25% mortgage for first time buyer vs 6.50% a deal breaker? We're all locked into <3% mortgages anyway.

People have a problem with the "fairness" of the rates relative to each other than the rate itself.

Edit: Just noticed jayrandom beat me to it.

[massnative71]

Originally Posted by jayrandom

I'm sure there are plenty of people upset that anything is based on the credit score (or even that such a concept exists) and see this as a step in the right direction.

Yep. Mostly the same bozos who caused the 2008 crash.

[massnative71]

Originally Posted by simplexsimon

People have a problem with the "fairness" of the rates relative to each other than the rate itself.

Edit: Just noticed jayrandom beat me to it.

There's more to it than that. The housing market in Mass. is already oppressive, and a move like this just makes it "that much worse" and a betrayal to those who have been responsible.

[jayrandom]

Originally Posted by massnative71

There's more to it than that. The housing market in Mass. is already oppressive, and a move like this just makes it "that much worse" and a betrayal to those who have been responsible.

What's strange is that it is takes almost no effort to lower your credit score. You can apply for a bunch of credit cards and then BAM lower credit score. Or if you need a bigger drop you could "forget" to pay a credit card bill for a while.

[simplexsimon]

I didn't triple fact check this, but according to this USA Today article: https://www.usatoday.com/story/money...3/11713841002/

The entire matrix of fees based on credit score and down payment has been updated. If you have a top credit score, you’ll still pay less than if you have a low credit score. However, the penalty now for having a lower credit score will be smaller than it was before May 1.

For example, if you have a score of 659 and are borrowing 75% of the home's value, you'll pay a fee equal to 1.5% of the loan balance. Before these changes, you would have paid a 2.75% fee. On a hypothetical $300,000 loan, that's a difference of $3,750 in closing costs.

On the other end, if you have a credit score of 740 or higher, you would have paid a 0.25% fee on a loan for 75% of your home value before May 1. After that date, you could pay as much as 0.375%.

Doesn't seem like having a lower score is a winning strategy. Just slightly less losing than it was before. And with a lower score, I'm sure all other parts of their financial picture is worse off and I would still rather not be them.

[massnative71]

Originally Posted by jayrandom

What's strange is that it is takes almost no effort to lower your credit score. You can apply for a bunch of credit cards and then BAM lower credit score. Or if you need a bigger drop you could "forget" to pay a credit card bill for a while.

Meh. Unless you're applying for like 5 cards over a few months period it's not going to fluctuate all that much. At least not the score that the banks are looking at when applying for a mortgage. To get a sub-680 score, that involves some serious Fing up.

[massnative71]

Originally Posted by simplexsimon

I didn't triple fact check this, but according to this USA Today article: https://www.usatoday.com/story/money...3/11713841002/



Doesn't seem like having a lower score is a winning strategy. Just slightly less losing than it was before. And with a lower score, I'm sure all other parts of their financial picture is worse off and I would still rather not be them.

Bottom line is the already unaffordable costs are going up for the majority of MA home buyers. I think they said the equivalent of an extra $40/month for a $500K mortgage.

[simplexsimon]

Is this a fee that's found on the closing doc? Or is it something the mortgage originator pays on the back end and passes on through the rate or through the origination/application fee?

[massnative71]

Originally Posted by simplexsimon

Is this a fee that's found on the closing doc? Or is it something the mortgage originator pays on the back end and passes on through the rate or through the origination/application fee?

Not sure, but it's not something I ever recall seeing in the closing docs. So I would guess that it's paid by the originator.