The average price of an N.J. home is $100K more than what it was last year (Washington: sales, condominium)
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I'd reckon that if someone could afford rent plus student loans, then they could afford mortgage plus student loans. The big barrier is saving enough for a down payment, which might require as much as $100k these days to avoid PMI. And I haven't saved nearly enough on waived student loan payments to approach anything that looks like a down payment (does cover a trip to Hawaii though lol).
And I've been keeping a close eye on the market. You're just not going to find affordable homes in North Jersey unless you're looking at Warren or Sussex. Maybe young people can consider condos, but that's not my preference.
Paying PMI is not the worst thing in the world. I put just under 10% down and I paid the PMI at closing, it came out to around $3900. If I would’ve waited until I had 20% to put down the house might have costed me another 100k.
Paying PMI is not the worst thing in the world. I put just under 10% down and I paid the PMI at closing, it came out to around $3900. If I would’ve waited until I had 20% to put down the house might have costed me another 100k.
So your $3900 payment of PMI covers you over the life of the loan (or until you get to 80%LTV?) That doesn't sound like the worst option in the world. Now, I do know some banks pay for the PMI, or only require 10.5% down to avoid PMI (Trustco, I used them for my first mortgage) but a payment of ~$100 as insurance for the bank that you don't default is tough to swallow.
But hey, with rates so low one might not even notice they're paying PMI, compared to rates even from 2019. I agree that paying PMI can make sense, especially in a hot market like this, where your equity will increase.
So your $3900 payment of PMI covers you over the life of the loan (or until you get to 80%LTV?) That doesn't sound like the worst option in the world. Now, I do know some banks pay for the PMI, or only require 10.5% down to avoid PMI (Trustco, I used them for my first mortgage) but a payment of ~$100 as insurance for the bank that you don't default is tough to swallow.
But hey, with rates so low one might not even notice they're paying PMI, compared to rates even from 2019. I agree that paying PMI can make sense, especially in a hot market like this, where your equity will increase.
Yea it covers the entire PMI payment. It would've been something like $110 a month for ~ 7 years if I chose to pay in monthly installments. Usually the when banks pay for PMI, your mortgage rate is a little higher so you could possibly end up paying more in the long run.
I'd reckon that if someone could afford rent plus student loans, then they could afford mortgage plus student loans. The big barrier is saving enough for a down payment, which might require as much as $100k these days to avoid PMI. And I haven't saved nearly enough on waived student loan payments to approach anything that looks like a down payment (does cover a trip to Hawaii though lol).
And I've been keeping a close eye on the market. You're just not going to find affordable homes in North Jersey unless you're looking at Warren or Sussex. Maybe young people can consider condos, but that's not my preference.
The ones buying houses that have student loans, had their loan payment frozen during COVID, just because they could. They were still working through COVID, so they put the student loan money aside, when they had enough, they bought a house, using the student loan money for a down payment.
I don't know if they were renting or living with their parents. The article I read didn't say. I just wonder how many will default on that student loan when they have to pay on it again. Maybe I'll be shocked to see they're paying both but I doubt they will. They said how freeing it felt to not have the loan payment.
Mortgages will be going up according to a realtor local to me. She also said that more houses will be coming on the market for various reasons, people that held off moving during COVID as well as short sales and foreclosures for people who put their mortgage on hold that now can't pay the mortgage payment plus arrears every month.
Paying PMI is not the worst thing in the world. I put just under 10% down and I paid the PMI at closing, it came out to around $3900. If I would’ve waited until I had 20% to put down the house might have costed me another 100k.
I paid PMI when I bought my condo in 2010. I had an FHA mortgage. I'd been paying rent all my life and had to live paycheck to paycheck for most of it. There was no opportunity to save money for a down payment. I was a divorced mother with only occasional and random child support tossed my way and my goal was to get my daughter through to adulthood and then worry about my debt.
Once she graduated from high school and I no longer had to worry about a town with good schools and my mother nearby while I was working in the city, I was able to move somewhere affordable to me, and I borrowed from my retirement system to get the 3.5%.
I could easily afford the mortgage payment--it was far less than the rent for the house I lived in while my daughter was in high school. I just didn't have a chunk of change for a down payment.
It all worked out. As time went on and my salary increased, I paid extra on the mortgage until the PMI was gone, and then a year after that I was down far enough to refi to a 15-year conventional. (I think one difference now, though, is that the PMI is for the life of the loan, so you would have to refi to get rid of it, whereas mine went away once I paid off a certain percentage.)
You do what you have to do. Another person's situation doesn't always work for us. Sounds as if you made a smart move with prices rising right now the way they are.
$100,000 more? I wish that were really true because I would sell my hone of 20 years right this second and move to a state where my property taxes are $1,200 instead of the $12,000 I currently pay. Delaware, the Carolinas -- lots of great relocation choices.
It really is true--at least in my neck of the woods. Via the most recent real estate transfer listings, I just learned of a second home in my neighborhood that recently sold for at least $100k over its value a couple of years ago.
That particular home is the same model as mine, although its totally bare appearance lacks any landscaping and has no perimeter fence. And yet, this home that is essentially identical to mine, just changed hands for $100k more than what my home was appraised for in late 2019.
It really is true--at least in my neck of the woods. Via the most recent real estate transfer listings, I just learned of a second home in my neighborhood that recently sold for at least $100k over its value a couple of years ago.
That particular home is the same model as mine, although its totally bare appearance lacks any landscaping and has no perimeter fence. And yet, this home that is essentially identical to mine, just changed hands for $100k more than what my home was appraised for in late 2019.
That's great for you! Hope your town doesn't perform a property revaluation for a few years so your taxes are somewhat stable.
That's great for you! Hope your town doesn't perform a property revaluation for a few years so your taxes are somewhat stable.
Ever since we voted out the previous R administration, under which our property taxes increased each year, our taxes have remained stable for the past 3 years. Will that continue? Quien sabe?
Mortgages will be going up according to a realtor local to me.
Doubtful.
Even if they do, it will be gradual.
Quote:
Originally Posted by Roselvr
She also said that more houses will be coming on the market for various reasons, people that held off moving during COVID as well as short sales and foreclosures for people who put their mortgage on hold that now can't pay the mortgage payment plus arrears every month.
If true, it'll still only put a small dent in demand, as there are alot of buyers currently on the sidelines...
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I paid PMI when I bought my condo in 2010. I had an FHA mortgage. I'd been paying rent all my life and had to live paycheck to paycheck for most of it. There was no opportunity to save money for a down payment. I was a divorced mother with only occasional and random child support tossed my way and my goal was to get my daughter through to adulthood and then worry about my debt. 
Awesome
