North Chandler feels as if it is becoming an extension of Fiesta District/West Mesa (Phoenix: loan, big house)

[asufan]

Originally Posted by wase4711

I bought a house in 2005, with only 5% down, and did NOT pay PMI, in illinois, so maybe it was different in different states..

You likely either payed it lumped in with your PITI and didn't know it, or your appraisal came in at a level that you had a 20% equity position.

[DetroitN8V]

Originally Posted by asufan

You likely either payed it lumped in with your PITI and didn't know it, or your appraisal came in at a level that you had a 20% equity position.

On a purchase, LTV is determined by purchase price, not appraised value as far as I know. It was either in there and he didn't know it or he was offered a higher rate in lieu of PMI.

[wase4711]

yeah, it was long ago, and back in the day when "kinky" mortgages were everywhere...we had an adjustable rate of 6.35 back then, so maybe stuff was rolled in..plus,back then, the mortgage companies could "suggest" to the appraiser what number they were looking for on the appraisal, so it was easy to appraise things much higher than they actually were, to help write kinkier loans..

ah, the good old days, before the housing bust...

[Ultrarunner]

Never paid PMI... but seldom do I use conventional financing...

At one time assuming FHA loans was the norm and then seller or portfolio lenders... none required PMI.

For many years I was not eligible for conventional lending as there is a limit to how many loans any one person can have and I think it was 5 last I checked.

[asufan]

Originally Posted by DetroitN8V

On a purchase, LTV is determined by purchase price, not appraised value as far as I know. It was either in there and he didn't know it or he was offered a higher rate in lieu of PMI.

That makes sense because the bank would be putting too much faith in an appraisal which may or may not be accurate when the market is telling them the house is worth what it is selling for

[Valley Native]

Originally Posted by FirebirdCamaro1220

Why does real estate have to appreciate in value? It seems to be the only price that people want to rise, which goes against common sense of everyone wanting falling prices.

Appreciating prices doesn't create any real wealth for anyone. It screws buyers by making it that much harder, and screws sellers in the big picture, because it is a zero sum game for them unless they downsize or move somewhere else.

And eventually, you get million dollar shacks, where a house that was purchased by an electrician or mechanic today will only be able to be purchased by a trust fund baby or some investment firm in 3 generations.....

Because home ownership is an investment (much like buying securities). It's not associated with basic goods & services which most people prefer to be kept on the low/affordable side. Besides, owning property is part of the American dream. If certain people can't afford to buy homes, they aren't exactly left out in the cold because they can always rent.

Appreciating property values definitely creates wealth, but again it depends on the market you're in. As it was mentioned previously, an long established property owner in the Bay Area could be sitting on a gold mine at this point. Here in Phoenix, real estate prices have appreciated quite nicely in the last few years ... however, since I'm considered a long established homeowner, I would like to see the values go up even more so that if & when I decide to sell, I could make a nice profit and still be able to afford something nicer (even though it would be a smaller place like a condo).

I'm sorry you think rising real estate values are screwing buyers. Actually, in most cases, quite the opposite is true. Keep in mind also that owning property is not and should not be a right or an entitlement. One of the causes of the 2008 economic downturn was too many unqualified people were approved for sub prime loans, and many of them eventually defaulted on their loans.

[FirebirdCamaro1220]

Originally Posted by Valley Native

Because home ownership is an investment (much like buying securities). It's not associated with basic goods & services which most people prefer to be kept on the low/affordable side. Besides, owning property is part of the American dream. If certain people can't afford to buy homes, they aren't exactly left out in the cold because they can always rent.

Appreciating property values definitely creates wealth, but again it depends on the market you're in. As it was mentioned previously, an long established property owner in the Bay Area could be sitting on a gold mine at this point. Here in Phoenix, real estate prices have appreciated quite nicely in the last few years ... however, since I'm considered a long established homeowner, I would like to see the values go up even more so that if & when I decide to sell, I could make a nice profit and still be able to afford something nicer (even though it would be a smaller place like a condo).

I'm sorry you think rising real estate values are screwing buyers. Actually, in most cases, quite the opposite is true. Keep in mind also that owning property is not and should not be a right or an entitlement. One of the causes of the 2008 economic downturn was too many unqualified people were approved for sub prime loans, and many of them eventually defaulted on their loans.

How do the subsequent generations afford it then? If prices keep going up and wages don't?

And as far as I'm concerned, gold or crude oil are investments. A house is supposed to be a residence

[belgirl]

Originally Posted by FirebirdCamaro1220

How do the subsequent generations afford it then? If prices keep going up and wages don't?

And as far as I'm concerned, gold or crude oil are investments. A house is supposed to be a residence

It's called saving. Being wise with your money. Most millennials don't understand this concept. They spend more than they can afford, ruin their credit and then try to dig themselves out of a hole while renting or living with a family member. And millennials want the biggest and the best right away. Do you realize your rental payment for a 1 bedroom apt is almost double what our mortgage is for our huge home? Renting for any length of time is a huge money suck for nothing in return.

[DetroitN8V]

Originally Posted by belgirl

It's called saving. Being wise with your money. Most millennials don't understand this concept. They spend more than they can afford, ruin their credit and then try to dig themselves out of a hole while renting or living with a family member. And millennials want the biggest and the best right away. Do you realize your rental payment for a 1 bedroom apt is almost double what our mortgage is for our huge home? Renting for any length of time is a huge money suck for nothing in return.

Sweeping generalizations like this about an entire generation of people are usually best ignored.

Most young professionals have zero desire to live on the edges of town (where you enjoy your $500 mortgage payment) and would rather rent than be isolated from social events, dining, culture, etc. There's no doubt that a new worker can aspire to homeownership in select areas if they work hard and save, but the point was about rising housing prices with stagnant wages across the board. Nothing in the above rant addressed that. The fact is, homeownership is something that many will experience further into their working years than previous generations.

[Ultrarunner]

Originally Posted by FirebirdCamaro1220

How do the subsequent generations afford it then? If prices keep going up and wages don't?

And as far as I'm concerned, gold or crude oil are investments. A house is supposed to be a residence

A couple of things... "People" are currently affording them because if they couldn't there would be no sales at current prices.

Almost all of the older generations were drafted into the military... part of the bargain was Education and VA Home Loan...

It is easy to forget if one has never served... again, the option to enlist is there but many would never consider...

Several of my friends enlisted... they all bought homes and Uncle Sam paid for their education... they are all Registered Nurses... male and female... and this is over the last 5 years.

Another way is partner and buy a property together... I have already mentioned buying a duplex or up to 4 units and living in one... fantastic leg up and have helped several do this and 1-4 units have owner occupied finance.

Alternatively... be the first to check out the lowest priced single family on the MLS... the median or average home is just that... many sell for more and just as many for less.

Last... buy a property with problems and secure seller financing... it has worked very well for me... since the property is substandard just about all conventional buyers can't buy because of underwriting...

Each generation thinks none before have had obstacles to overcome... back in the 80's mortgage rates were 15%... if mortgage rates went to 15% today prices would fall...

Ask your parents about getting a mortgage on that 50k home they bought in the 80's?