Housing bubble part 2 (San Jose, Anaheim, Irvine: foreclosures, renters, lenders)

[DocGoldstein]

Originally Posted by Joe Van Fossen

This is true. Additionally, it's much harder to qualify for a conventional loan now than it was back during the mid-2000s bubble.

That's because banks know that "strategic default" is part of the standard vernacular now. They aren't going to get bitten again for a very long time.

[ducviloxi]

So what would you think a family with 2 kids, $50,000 for a downpayment, $140,000 in joint gross income could afford in OC? Assume 2 car payments and under $5k in CC debt ( which is lower than the average median household cc debt of $8k in the US)

[Dean Trails]

Originally Posted by CAVA1990

With interest rates so low and stocks kind of meh right now there really isn't anywhere else decent to put it. Might as well dump it into a house if you don't really need it.

Yep, i received a 15 year, no points, low fees, mortgage refi for 2.875%, today. That is amazing.
Run out and buy a house now!!

[Joe Van Fossen]

Originally Posted by DocGoldstein

That's because banks know that "strategic default" is part of the standard vernacular now. They aren't going to get bitten again for a very long time.

And that's better for everybody.

Originally Posted by ducviloxi

So what would you think a family with 2 kids, $50,000 for a downpayment, $140,000 in joint gross income could afford in OC? Assume 2 car payments and under $5k in CC debt ( which is lower than the average median household cc debt of $8k in the US)

It's probably best to speak with a home loan provider, since there are a lot of different options and loan products available. If you're a first time buyer, there are some incentive programs available in some areas. You are in good shape though.

[Leonard64]

Originally Posted by ducviloxi

So what would you think a family with 2 kids, $50,000 for a downpayment, $140,000 in joint gross income could afford in OC? Assume 2 car payments and under $5k in CC debt ( which is lower than the average median household cc debt of $8k in the US)

Don't buy to your max nor spend excessively on things like Granite counter tops that really add minimal resale value. If you really want such upgrades, start with a very reasonable house and add. Just because you can afford something does not mean you should buy to the limit. One day it may not be that affordable to keep paying for it.

I bought a home 3 1/2 years ago and paid for what I needed, not what I thought was really nice but at the top of the budget. No regrets and a lovely house, just not the most expensive house.

[Ultrarunner]

Originally Posted by CAVA1990

Never say never. If conditions are right there will be a sudden contagion of amnesia in the banking sector. Greed is always lurking and everyone thinks they'll be ones to get in, make a bundle and get out before it crashes. I've not seen many huge financial reforms that would prevent it from happening again given the right conditions. It may not be tomorrow but down the road a bit.

One of my friends lived in Germany and experienced two world wars... she said when it came down to it the best asset was a home with enough land to be as self-sufficient as possible.

She told me of her Great Aunt that owned a small inn on the shore of an Alpine Lake... she was getting up in years and decided to sell the place for a lot of money and she did... the problem was the money became worthless and the land always more valuable and today, unbelievably valuable.

So... even making a killing and having a bundle of cash could prove risky.

One of the Docs I work with has bought an old Farm in Oregon with pasture, water, fruit trees and out buildings... he said it's his back-up plan. I know he is not alone in his thinking.

Generally, quality farmland has weathered the storm quite well... at least as far as I know.

The old saying is location, location, location.

[JohnSoCal]

Originally Posted by ducviloxi

So what would you think a family with 2 kids, $50,000 for a downpayment, $140,000 in joint gross income could afford in OC? Assume 2 car payments and under $5k in CC debt ( which is lower than the average median household cc debt of $8k in the US)

With a conventional 30 year fixed rate mortgage and 20% down, you could afford a $250,000 home. You could get a 90% loan which means you could buy a $500,000 home but you would have to pay PMI ( mortgage insurance ). Your limiting factor is your downpayment, not your income. I am assuming that your FICO score is at least 720 and your car payments are not huge. Take this as a guideline and not exact.

[CAVA1990]

Originally Posted by JohnSoCal

With a conventional 30 year fixed rate mortgage and 20% down, you could afford a $250,000 home. You could get a 90% loan which means you could buy a $500,000 home but you would have to pay PMI ( mortgage insurance ). Your limiting factor is your downpayment, not your income. I am assuming that your FICO score is at least 720 and your car payments are not huge. Take this as a guideline and not exact.

Couldn't he just get a second and avoid the PMI?

[seraphita]

Could a 4-person family with $70,000 in household income, $70,000 for a down payment, and no debt, afford to buy in OC? Or would we need to take UC Irvine's subsidized faculty housing (since my husband would be working for the university)?

[Leonard64]

Originally Posted by seraphita

Could a 4-person family with $70,000 in household income, $70,000 for a down payment, and no debt, afford to buy in OC? Or would we need to take UC Irvine's subsidized faculty housing (since my husband would be working for the university)?

Yes, but what are your other debts, credit score and actual housing needs (size, number of bedrooms, etc)?