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Thanks for the feedback from those sharing their personal expericence as well as to those wagging their fingers.
I've noticed lately how agents really like to turn on the hard sell stating how the prices are back to (OMG) 2001 prices! (not gas... not groceries etc. mind you) and that rates are at a historic low and this will never happen again!!
I think a lot people WILL be tempted to jump in because of that whether they're ready or not.
About a year and half ago I met an agent at an open house (at that point I was just curious) and he gave me the number to his mortgage guy. Mortgage guy told us, because our credit was so good, we could get into something with an FHA. However, when we found out about the fees, we said no way, so we waited. We also ditched that agent I had met because he took us around to see some places and tried to talk us into making an offer on everything we saw. We kept reminding him we were in research mode only, so NO!
The past year we've been going to open houses in a range of areas and we saw one that was way out of our price range, but looked just for fun. The realtor saw how much we were admiring it and told us to call her finance guy, and said, "You'd be surprised what he could do to get you into this house! You should jump in NOW because the rates are soooo low!!" I said something like, "isn't that what got into this whole mess? NO THANKS!"
Hubby and I are still saving our pennies and we're in much better shape than before. We met a nice agent who's relatively not high pressure, and yes we did get ourselves pre qualified, but we're aiming for something much lower than the top of our range.
We also recently consulted with a financial planner (through a trusted friend) and his wife is a broker and sees no reason to panic ourselves into buying right now.
It's unfortunate that so many people feel uncomfortable with real estate agents, but the fact is, you just can't believe what they tell you. It's commision driven and they make it all sound so wonderful, but if you lose your job, (been through that already) or have to take off work for a sick parent, (did that too) or don't have an emergency fund, (have one now) it's your misfortune, and the agent is long gone.
As someone mentioned... things are always more expensive than you think, and a price is paid for whatever you choose, SFR or condo. One really has to do their homework and go in with their eyes open.
IF we find something that would suit us at the level we're at now, fine, but we also have to live with it for a very long time, so if we wait and save a little longer, so be it, even if it makes our agent and lender .
I've noticed lately how agents really like to turn on the hard sell stating how the prices are back to (OMG) 2001 prices! (not gas... not groceries etc. mind you) and that rates are at a historic low and this will never happen again!!
I dunno about the 2001 prices, or if rates will never be this low again. But the lesson is this: Don't buy more house than you can comfortably afford now -- no stretching. Put down at least 20 percent of the sale price.
Also, pay your own insurance and taxes.
You seem to have seen the light on much of this, and are willing to wait until you're ready. Congrats on being a responsible grownup!
I always do my own calculations on what I can afford monthly. Only I know what I am comfortably able to afford. We are getting a mortgage soon that will be about $2800 a month. For a year now we have been saving $3300 a month to get a feeling of what paying that mortgage will feel like with an excess of $500 a month. Granted we are building a new house so repairs should be a minimum or covered by the builder for the first year and we will not be doing any remodeling.
We know what it is going to be like with this mortgage and we have not changed our spending habits. The unknown is heating and cooling and basically what we don't know. I am scared to drop an anchor and incur around $350K of debt but this is supposed to be the house we grow a family in....I am not so worried about the value in the next 10-15 years.
If your looking for investments then buying homes with distressed values and renting them would be the way to go IMO.
Funny how you're not suggesting that the agent and the lender should take responsibility for their actions -- which is, advising someone poorly.
The lender is restricted by debt to income ratios. The real estate agent is restricted by what the lender says they can afford. For FHA, which this OP is doing, it is 29% for the front end (ie housing costs) DTI with a max of 41% DTI with certain criteria. So letting someone know what the qualify for according to the loan guidelines isn't shoving them into it or advising them to spend it all. It's what the loan is. People are always welcome to make up their own minds as it is their money.
So letting someone know what the qualify for according to the loan guidelines isn't shoving them into it or advising them to spend it all. It's what the loan is. People are always welcome to make up their own minds as it is their money.
So in other words, a buyer should treat these people like they are used car salesmen; someone who will give you bad advice to sell a product, and then blame you for taking his/her bad advice.
So in other words, a buyer should treat these people like they are used car salesmen; someone who will give you bad advice to sell a product, and then blame you for taking his/her bad advice.
sounds like a broad brush you paint with.
these people are here to tell you what is possible, allowable etc.
do you really want your lender telling you what you cna afford? how could they possibly know that? some people can afford the max the lender can give them. They are frugal on everything else and want a nicer house. Others can't afford half what the lender says they qualify for, they go out to nice dinners every nite, drive fancy cars, and spend money like its water. and then there is everyone in between.
you may want to be told what to do...... I'd rather make up my own mind. I don't want a RE agent teling me I should buy XY or Z b/c I can't afford it, when I know I can, or for that matter telling me I'm an idiot for not spending at least x.
you want real financial advice on your own situation sit down for a handful of hours with a Certified Financial Planner or a CPA.
A RE agent is assisting you in purchasing RE, a lender is lending you money, niether really wants you to make a bad decision, but niether of them is going to stop you so long as your within guidlines b/c its not their job, responsability, or business, its yours.
Funny how you're not suggesting that the agent and the lender should take responsibility for their actions -- which is, advising someone poorly.
Personally I don't blame others for things I choose to do. At the end of the day buying a house is 100% the responsibility of the buyer. No one else.
Should everyone act in good faith? Of course. But I don't live in la la land. I realize people are out to make a buck. The only one looking out for me is me.
exactly, everyone else involved is just a salesperson.
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I said something like, "isn't that what got into this whole mess? NO THANKS!"
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