Looking to buy a home...

[Steff]

Not sure. It's just something somebody said (I think it was when we were applying for our loan) when we were house hunting and it's stuck in my brain ever since.

 

The other one was that house payments are typically 1% of your total mortage. Including taxes and insurance. That's about right for us as well...

 

 

 

1%...?? Really? So a housepayment on a $400K house should be $4K.... ? I'm no mortgage expert besides what I have paid for my own.. but that hasn't been my experience either. Jason.. being the mortgage expert can you chime in on this as well..? Even before the low interest rates I was always (and am now) well under 1%.

[Steff]

I could get someone the same loan today that I could a year ago.  The media likes to hype a lot about the rate and sure the fed rate has adjusted, but that has a minimal effect on the rate you can get for mortages.

 

What would change is if they made qualifications stricter on loans cause right now almost anyone can get a loan (regardless of how much money they can put down).  Plus the programs out there (which are so liberal in a sense) allow people to pay a lot less on homes (low start rates, etc).

 

 

 

Folks who just took advantage of the BK changes and filed just months ago are getting big loans. It's unreal.

[Kyyle23]

Rates aren't going up, not on mortgages. 

 

 

I think Town & Country Credit and the 10 percent of its workforce who were laid off(including myself) due to rising interest rates on mortgages would like to respectfully disagree. They are still at record lows, but they are on the way up right now.

[Steff]

I think Town & Country Credit and the 10 percent of its workforce who were laid off(including myself) due to rising interest rates on mortgages would like to respectfully disagree.  They are still at record lows, but they are on the way up right now.

 

 

Do independent lenders have the control over the rates they offer? Is it possible that T&C is having some troubles due to loans they have secured over the past 2 years..? I know that Wells Fargo is kicking strong right now. They don't have the staff to cover the new loans coming in their doors.

[Kyyle23]

Do independent lenders have the control over the rates they offer? Is it possible that T&C is having some troubles due to loans they have secured over the past 2 years..? I know that Wells Fargo is kicking strong right now. They don't have the staff to cover the new loans coming in their doors.

 

The weekly LIBOR came down from Ameriquest, I am pretty sure. That was our umbrella company.

 

Either way, rates are going up. Ours werent so good and there were plenty of people coming to us because the rates were going up everywhere. We had nothing but high class clientele, let me tell you.

[Steff]

The weekly LIBOR came down from Ameriquest, I am pretty sure.   That was our umbrella company.

 

Either way, rates are going up.   Ours werent so good and there were plenty of people coming to us because the rates were going up everywhere.   We had nothing but high class clientele, let me tell you.

 

 

 

LMAO @ the clientele comment. I'm shocked that Ameriquest is the parent yet so many got laid off. I don't kow much about them, but from what I do they seemed to be pretty solid. How long did you work for them (and I apologize because I think I recall you posting about getting laid off, but my brain is so fried from the past month I can't think straight...) and were they cool at separation time?

[Balta1701]

LMAO @ the clientele comment. I'm shocked that Ameriquest is the parent yet so many got laid off. I don't kow much about them, but from what I do they seemed to be pretty solid. How long did you work for them (and I apologize because I think I recall you posting about getting laid off, but my brain is so fried from the past month I can't think straight...) and were they cool at separation time?

Well, Ameriquest is currently facing some pretty hefty legal problems...to the tune of a $325 million settlement with 33 states over a bunch of things, like getting people to refinance right after they were sold a first mortgage (pay closing costs twice) or only giving people high-rate mortgages despite the fact that they'd qualify for better ones.

 

Oh yeah...there's a piece of advice...probably want to stay away from Ameriquest if you're looking for a mortgage (no offense to those who work there)

[Rex Hudler]

Not sure. It's just something somebody said (I think it was when we were applying for our loan) when we were house hunting and it's stuck in my brain ever since.

 

The other one was that house payments are typically 1% of your total mortage. Including taxes and insurance. That's about right for us as well...

 

That's high. I know interest rates have gone up some, but I just bought again November 30th and my payments (two mortgages) total a little over .007 (7/10 of one percent. That includes property taxes and homeowners insurance. Granted property taxes are low here, so the 1% rule may actually apply in the Chicago area.

 

My advice, if you aren't putting 20% down (who does on their 1st house?), don't be afraid to go with two mortgages to avoid PMI. Your first mortgage will be 80% of the total and your second will be 20% minus your downpayment. Your second mortgage can be interest only or a balloon type mortgage. This will slow your equity building slightly (only slightly) and can significantly lower your payments. Explore all options, but be careful with a full interest only mortgage. If you look at that route, make sure there are safeguards built in to make sure you won't be upside down should the housing market crash.

[Rex Hudler]

Rates are going up, if you compare them to rates offered in the past 6-9 months. But 3 years ago, many people thought the bottom had dropped out and rates would be going way back up soon. It didn't happen and they fluctuated, at times going even lower over the next three years.

 

My understanding (and a very limited one at that) is that Ameriquest typically deals with people with less than A credit. They typically don't have access to the best rates.

[Steff]

Well, Ameriquest is currently facing some pretty hefty legal problems...to the tune of a $325 million settlement with 33 states over a bunch of things, like getting people to refinance right after they were sold a first mortgage (pay closing costs twice) or only giving people high-rate mortgages despite the fact that they'd qualify for better ones.

 

Oh yeah...there's a piece of advice...probably want to stay away from Ameriquest if you're looking for a mortgage (no offense to those who work there)

 

 

Holy crapola! I had no idea...

[Steff]

That's high.  I know interest rates have gone up some, but I just bought again November 30th and my payments (two mortgages) total a little over .007 (7/10 of one percent.  That includes property taxes and homeowners insurance.  Granted property taxes are low here, so the 1% rule may actually apply in the Chicago area.

 

My advice, if you aren't putting 20% down (who does on their 1st house?), don't be afraid to go with two mortgages to avoid PMI.  Your first mortgage will be 80% of the total and your second will be 20% minus your downpayment.  Your second mortgage can be interest only or a balloon type mortgage.  This will slow your equity building slightly (only slightly) and can significantly lower your payments.  Explore all options, but be careful with a full interest only mortgage.  If you look at that route, make sure there are safeguards built in to make sure you won't be upside down should the housing market crash.

 

 

Our payment is a little less then that, but in the same neighborhood.

 

And I agree on the 2 mortages. We had several friends and family do it that way, and we did it on our investment properties.

[Kyyle23]

LMAO @ the clientele comment. I'm shocked that Ameriquest is the parent yet so many got laid off. I don't kow much about them, but from what I do they seemed to be pretty solid. How long did you work for them (and I apologize because I think I recall you posting about getting laid off, but my brain is so fried from the past month I can't think straight...) and were they cool at separation time?

 

I got a nice severance package for only working there from March to November. I guess you could say they were cool in that respect. But lets put it this way, I was processing 4 loans on Wednesday. At 5, my boss was called to the Downers Grove office to talk to his boss. At 6 PM, those of us being laid off knew we had no jobs anymore. On Thursday at 11:31 AM, I was erased from the payroll and had no job anymore. Quick and painless, I guess. I was in shock for a week.

 

And yes, Ameriquest has had some bigtime problems with fines and unethical practice accusations in the past two years.

[CanOfCorn]

To answer your question...the SW suburban area you should be looking in is Austin, Texas. It was in Fortune magazine as one of the more affordable places to live, housing wise. There is no way we woulda been able to afford a place in Chicago. at least not in a comparable place. You don't have to go more than 15 minutes out of Austin and you can get a big ol' place for less than $140K.

[Heads22]

Move to NE Iowa, and get a house on the cheap.

 

My hometown, where a $75,000 will make you middle class.

 

27,347 is the median income, if that tells you anything about where I came from.

 

 

Median resident age: 40.8 years

Median household income: $27,347 (year 2000)

Median house value: $53,300 (year 2000)

[southsider2k5]

Rates are going up, if you compare them to rates offered in the past 6-9 months.  But 3 years ago, many people thought the bottom had dropped out and rates would be going way back up soon.  It didn't happen and they fluctuated, at times going even lower over the next three years.

 

My understanding (and a very limited one at that) is that Ameriquest typically deals with people with less than A credit.  They typically don't have access to the best rates.

 

The difference is this time the Feds are raising interest rates whereas 3 years ago it was just a bunch of mortgage sellers speculating. I am going to believe that when Greenspan/Bernanke want interest rates to go up, mortgage rates will follow.

[RockRaines]

.

 

My advice, if you aren't putting 20% down (who does on their 1st house?), don't be afraid to go with two mortgages to avoid PMI.  Your first mortgage will be 80% of the total and your second will be 20% minus your downpayment.  Your second mortgage can be interest only or a balloon type mortgage.  This will slow your equity building slightly (only slightly) and can significantly lower your payments.  Explore all options, but be careful with a full interest only mortgage.  If you look at that route, make sure there are safeguards built in to make sure you won't be upside down should the housing market crash.

Ugh. I dont understand people who go the interest only route. You arent building any wealth and are essentially throwing your money away like you are renting your property. With my first home, I put down about 30 percent and mortgaged the rest and my payment is pretty on par with what rent would be for my place. Even if its a little high for you, it will force you to make good financial decisions in other aspect of your life.

[NorthSideSox72]

Move to NE Iowa, and get a house on the cheap.

 

My hometown, where a $75,000 will make you middle class.

 

27,347 is the median income, if that tells you anything about where I came from. 

Median resident age: 40.8 years

Median household income: $27,347 (year 2000)

Median house value: $53,300 (year 2000)

 

I almost bought a house in Ames. Huge, 4 BR, designed by a Taliesin scholar (very Wright-influenced), lots of windows, nice lot, etc., pretty much the perfect house. It was just west of the Rieman Gardens, south of Trice Field, but off the main roads. Price tag in 1995 was something like $125k.

 

But then I remembered I'd be living in Ames, Iowa.

 

Don't get me wrong Heads, Iowa State is a great school, and Ames is a great college town. But I just couldn't live there long term.

Edited January 20, 2006 by NorthSideSox72

[Rex Kickass]

My advice: Get a house with a bathroom. I hear when you resell, you can get way more than one without.

 

I rent!

[Heads22]

I almost bought a house in Ames.  Huge, 4 BR, designed by a Taliesin scholar (very Wright-influenced), lots of windows, nice lot, etc., pretty much the perfect house.  It was just west of the Rieman Gardens, south of Trice Field, but off the main roads.  Price tag in 1995 was something like $125k.

 

But then I remembered I'd be living in Ames, Iowa.

 

Don't get me wrong Heads, Iowa State is a great school, and Ames is a great college town.  But I just couldn't live there long term.

 

Heh, nicer part of town, at least.....I think.

 

I'm talking more like Waterloo and north and east.

[Chisoxfn]

1%...?? Really? So a housepayment on a $400K house should be $4K.... ? I'm no mortgage expert besides what I have paid for my own.. but that hasn't been my experience either. Jason.. being the mortgage expert can you chime in on this as well..? Even before the low interest rates I was always (and am now) well under 1%.

Ya, maybe the 1% includes property taxes on the year, but that has to be a really generic figure since property taxes vary greatly by state and area. In most places I think they go by assessed value, while in California they go based on purchase price. Plus you have newer developments that have started doing mello roos (basically the tax as you get the city started). Supposedly it usually has a cut-off date years into the future.

 

I know in car sales, ball park in Ca tax and license is 10% of the purchase price of the car. But I'm sure the 1% is some generic figure that maybe was tossed around. Its not a rule I've heard of, but most agents say a lot of really crazy stuff, especially right now, where you have tons of new agents that jumped in thinking its such an easy career (but they've never experienced the down turns of a bad market where its tough as hell, even if your good). We know I haven't experienced it, but if you aren't a good agent and the market gets soft, your gonna have a hell of a time making money. If your really good, its just like the stock market, you have an opportunity to do some things you couldn't do originally and set yourself up for some big gains in the future.

[Chisoxfn]

I think Town & Country Credit and the 10 percent of its workforce who were laid off(including myself) due to rising interest rates on mortgages would like to respectfully disagree.  They are still at record lows, but they are on the way up right now.

That may be the jargon they through out, but rates aren't gonna be a factor. They got laid off because people don't refi much anymore. The market has slowed down. Those that wanted to refi and do all that stuff already have done it. Its not the rates going up.

 

Plus if they were securing and holding onto the loans they gave they may have gotten bit for having less than strict lending practices that forced them to eventually eat quite a few loans (not that this happens much since property value hasn't been declining).

 

When the real estate market stops (which its starting too, imo, at least in CA) appreciating and possibly dropping (maybe people are lucky and it just holds steady for a few years) you'll see lenders get in trouble because most of those zero percent loans they gave out to people they usually wouldn't have, well they are gonna bite em in the ass (imo).

 

Just put it this way, when the stock market crashed any buffoon could tell you stuff was overpriced and needed to be devalued. 9/11 eventually pushed the market down even more, but the fact of the matter was all the long time ratio's (such as the PE ratio) were totally out of whack and the market was in for an price adjusting period (downturn). I'm not a stock market expert so I can't say much more than that. But essentially the real estate market (at least in SoCal) is basically at that stage.

 

Prices of homes have appreciated too much so the only thing left is for them to hold for a few years or go down 5-10% a year for a few years. Of course 10 years from now they will still probably be up as opposed to todays price.

[Chisoxfn]

The weekly LIBOR came down from Ameriquest, I am pretty sure.  That was our umbrella company.

 

Either way, rates are going up.  Ours werent so good and there were plenty of people coming to us because the rates were going up everywhere.  We had nothing but high class clientele, let me tell you.

Ameriquest is a crooked ass company. Thats all I'm going to say about that.

[Chisoxfn]

Our payment is a little less then that, but in the same neighborhood.

 

And I agree on the 2 mortages. We had several friends and family do it that way, and we did it on our investment properties.

Oh ya, 2 mortgages are a great option. There are a lot of really advantgeous routes when it comes to buying rental property and for 1st time home buyers. Its getting with people that know what they are doing cause they can save ya some money.

 

But as Balta showed they are in legal trouble (Ameriquest) and they are total freaking crooks and scumbags. Just my 2 cents. We happen to do loans on ocassions through their wholesale arm Argetn and they are one of my favorite companies to do a loan through. But they aren't competitive rate wise and its only recommended when you plan on buying an investment house that your gonna get rid of in 2 years (otherwise you better refi cause the margin gets ridiculous after 2 years).

 

Basically they, like I'm sure plenty of those fly by night (Ameriquest isnt' fly by night) lenders who advertise and tell you how cheap and easy it is to get a loan from them, tell you how great a refi is when in all honesty it may not be the case. They are just salesman trying to get a loan done and will tell you what you want. Thats one of the big things they got in trouble for (with the refi's and such).

 

Remember this is just my 2 cents. And kyle if you compare the rates from ytd today and ytd last year I can get clients the exact same loan essentially. I'm sorry you lost your job and its a tough industry but it depends on companies. Right now in general their is a slow down in the mortgatge sector in CA (I know a few people working for the big boy lenders and they've experienced) but its due to the refi market halting and the fact that the real estate market is starting to slow down (imo).

 

Its not due to rates.

[kapkomet]

Our payment is a little less then that, but in the same neighborhood.

 

And I agree on the 2 mortages. We had several friends and family do it that way, and we did it on our investment properties.

That's an interesting concept - but - if you don't have nets under you if the market falls, you're in BIG trouble.

[Chisoxfn]

Another nice thing to do is if you have a few rental properties go to one of the banks and shop around for an equity line of credit. Basically take out the line, but don't even use the money. The thing is, you at least have it there in case you have a little negative on your rental property and times get tough. This way you have a little rainy day fund of your equity that was built up that you can essentially use to help ya out and get through the rough times (cause its inevitable, the real estate market will have to hold up or drop a little bit over the next few years).

 

I don't think you'll see anything like the 80's though. That was insane, but the problem than (well according to my pops) was that at any new track of homes he'd go to, 75-80% of the homes were being purchased by speculators. So when stuff started turning everyone tried to put stuff on the market making the problem worse. Now new home builders make things a lot more difficult on investors and while plenty of people are investing in the market (don't know if its a great idea to do right now, but I'm sure there are still some solid investments out there, but they are probably tough to find) its nothing like it was back than (this is again according to my pops cause I didn't live it or go through it). I was a freaking baby.