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Wednesday, May 7, 2008
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36 comments:
Last month, the companies promised to pump money into the more expensive reaches of the housing market. In return, Congress temporarily raised the cap on the size of the mortgages they can buy to almost $730,000 from $417,000.
Was this temporary for DC area? How long is this going to be temporary?
I thought it was permanent.
it was at bottom of nytime article posted yesterday here
http://www.nytimes.com/2008/05/06/business/06fannie.html?pagewanted=2&_r=3&adxnnlx=1210169837-ic%20%20k21ie7JadDbQohozng
Temporary.
this short sale finally has an offer (contigent/No KO)
http://tinyurl.com/3ot9kr
MLS#: FX6568637
Listing Price History
Date Price
Oct 17, 2007 $995,000
Dec 05, 2007 $870,000
Dec 28, 2007 $699,000
Mar 19, 2008 $599,900
The location on that short sale is horrible. This is the one that faces a very busy road and a 7-Eleven, not to mention you can reach out and touch your neighbor's house.
I agree with what zmonet said. I used to live in that area (first in Amberleigh, then in Manchester Lakes) and the traffic on Beulah has only gotten worse and worse. The 7-11 is a god-awful location and as close together as those houses are, you can't even walk around inside naked!
bas:
Actually, two California Members of the House introduced a Bill on May 5, 2008 to make the temporary cap permanent.
http://tinyurl.com/66abjs
The raised cap is currently in effect until the end of 2008. It appears that the new cap has not resulted in more accessible and affordable jumbo loans.
The House Financial Services Committee will hold a hearing on this matter on May 21, 2008.
http://tinyurl.com/5bmhk5
0down:
my credit union has good rates. Only bad thing - is that as of about 2 weeks ago, are requiring 20% down. (They do say you can get a 10% loan some where else).
30-Year Fixed Rate Mortgage Loans
Jumbo rate good up to $2,000,000.
Rate Points APR
30-Year Fixed Conforming Loan Apply Now!
6.125 0.000 6.125
6.000 0.250 6.023
5.875 0.875 5.957
30-Year Fixed Jumbo Loan Apply Now!
6.125 0.000 6.125
6.000 0.250 6.023
5.875 0.875 5.957
Their 5/5 ARM looks good. capped 2% every 5 years, max of 10% up.
At about 650k, after 5 year, that's about 200 /month than that you'd pay now for a fixed rate. but at 10 years, it could get nasty.. but then hopefully you'd refinance by then. and of course, interest rates will NEVER go back up to 13-20%, right? ahaha
Special - The 5-Year Fixed Rate Mortgage
Jumbo rate good up to $2,000,000.
Rate Points APR
5/5 ARM Conforming Loan Apply Now!
5.250 0.000 3.387
5.125 0.375 3.417
5.000 0.625 3.436
5/5 ARM Jumbo Loan Apply Now!
5.250 0.000 3.387
5.125 0.375 3.417
5.000 0.625 3.436
bas:
I previously posted this comment that I found on the LA Times Blog regarding jumbo loans:
"These were doomed to fail the day Fannie/Freddie announced their underwriting criteria.. full doc, 15% down payment in declining markets, borrower has to be qualified at the fully amortized fully indexed rate, PMI for loan amounts over 80%.. it isn't interest rates that are killing the market.. it is rational lending criteria."
http://tinyurl.com/3lmyo9
While rates seem attractive enough, the 20% down requirement may cause problems for a significant number of potential borrowers.
What is the interest rate on the 10% down loan? PMI?
What rate do they qualify you at on the ARM? Down payment?
While rates seem attractive enough, the 20% down requirement may cause problems for a significant number of potential borrowers.
I would be one of those people. I'm about 40k short now.
What is the interest rate on the 10% down loan? PMI?
No more PMI offer from the credit union.
What rate do they qualify you at on the ARM? Down payment?
All amounts? The different amounts are based on the points.
Just make sure your loan amount is 20% less than the value when you put in the amounts.
here are those rules on their lending now:
http://tinyurl.com/3ojssa
http://tinyurl.com/4td7vs
Househunt on hold!
We finally heard back from our last-ditch effort lowball offer. We offered $470K, which involved maxing out what Navy Fed would let us borrow AND borrowing the downpayment from family AND draining our savings...probably a classic case of overextending to get a house, but we were so desperate to not have to rent again, and it is a fine house in the neighborhood we cherish, so we talked ourselves into it. We even wrote a personal note, explaining our circumstances and saying we were willing to stretch to the utmost and give them all we had.
They countered $630K.
The place has been for sale and vacant for two years.
So we are signing lease documents tonight, and will be moving June 15. That means two weeks of overlapping rental payments, but we need that time, since we are doing this ourselves.
But never fear--I will keep on looking ;)
tabitha,
I feel for you that you weren't able to buy a house that you liked at a reasonable price.
I was feeling really depressed about housing about a year ago and told my wife, you know if we have to rent for the rest of our lives so that we can have financial security I'll do it. It just didn't/doesn't make sense to buy when we could rent for much cheaper. I'm feeling much better now, but it's still depressing.
I just keep the little story of the ant and the grasshopper in the back of my head, and that makes me feel much better.
And finally, I have learned in life that it's not what you have but how you live your life that matters. I've lived among people (in Argentina) who have much, much less than I do, but many are extremely happy. Those that are happy may not have much, but they live good, honest, decent lives and they have good relationships with their family. IMHO one of the most important things in this life is family, not what you get them materially, but how you raise them to live their lives.
What does it matter if you have a mansion, but both spouses have to work 60-70 hours for it with no time to spend with kids. It's just not worth it.
sorry for the "preachiness", and you never know sometimes the best things come out of the blue when you aren't expecting it. Good luck on you endeavors of moving, etc.
Tabitha,
I've been following your saga for quite a while. I'm confident your and your family's patience will be rewarded. If it helps, remember that a $400k loan over 30 years at 6% means you pay roughly $860k back. That's about 35-40 years of rent.
Ralph
did you deduct mortgage interest rate reduction?
ralph said...
"Tabitha,
I've been following your saga for quite a while. I'm confident your and your family's patience will be rewarded. If it helps, remember that a $400k loan over 30 years at 6% means you pay roughly $860k back. That's about 35-40 years of rent."
Ralph, I know you meant well. But that's about the worse advice you could give ... And totally inaccurate to boot. You've conveniently (or more likely "inadvertently") overlooked the time value of money. In brief, WHEN Tabitha buys she will be locking in her payments ... The rent doesn't similarly get locked in. And THAT makes your statement patently false.
I too have been following Tabitha's story. Having looked at the houses she and her husband have been bidding on (her other blogs are linked to her blogging name), I have to comment that they are veritible mansions. I can see why she'd really want the houses. I would too ... though I know I could never afford one in DC. I hope she gets one of them when all is said and done. BUT I also hope she isn't getting fed false hope by all the bubble believers on here. A mansion in working order is never cheap ... no matter what the real estate market is doing.
The bigger issue for Tabitha is that Manassas is being run over by MS-13. I would not buy anywhere near there. Talk to any LEO and they will tell you the same thing.
I'll agree with Lance about locking in your mortgage rate - assuming a FIXED RATE loan.
Narl,
The properties they've been considering aren't likely to be affected by MS-13 activities. Properties like those are safe no matter for multiple reasons. You have areas like that in the District which even in the worst days following the riots of '68 were completely safe.
Tabitha,
After signing the new lease, you can take your time--I think October to January will be a good time to get better deals. (I hope there is a way to break your lease by then--or sublet.)
Also, you may want to extend your search to Centreville. It has the advantage of having Fairfax county schools, but I am hearing that this area also has good deals.
BAS said...
"I'll agree with Lance about locking in your mortgage rate - assuming a FIXED RATE loan."
I agree with you for the most part. For myself I insisted on a fixed rate loan ... as I am really risk adverse. But, to be honest, I think most adjustable rate mortgages are okay. What people tend to forget is that the amount they can go up is fixed. If you are dealing with an honest mortgage broker (and I know, not all were honest during the last boom), they will qualify you on "worst case" scenarios (i.e. highest rate that the cap will permit.) I know mine did ... Though in the end I prefered to pay a bit more in interest and have it fixed. Looking back, a variable might have been a better bet since rates haven't gone up since I bought 3 years ago.
Tabitha,
I am happy that you did find a place to live. And I do hope you will find some relief in focusing on something else and relaxing a little bit.
It will be nice to keep saving and building up your cash reserves. It's a comfortable feeling to have some savings.
Leaving a house vacant for two years seems like a waste of money. I feel so bad for empty houses sitting there getting musty, and also for people who could otherwise be living in them.
Lance,
I know you know that mansions ("Mc" or otherwise) can be cheap depending on where you live. In certain parts of Texas, for example, mansions are a dime a dozen in DC terms.
470K does buy a fair-sized house (or lot size) in Prince William County at this time.
A person is allowed to be particular according to exact location and one's family's unique needs and desires. Not finding exactly (or close to) what you want this time doesn't mean it doesn't exist. We can only bid on what's offered for sale at any given time, and sometimes it's just not there yet.
Harriet said:
"and sometimes it's just not there yet."
I agree with everything you say in your last post ... However, it is that very last word, "yet", which worries me. You are correct, I don't know what 470K will buy you out in PWC. I just worry that people who believe (and I mean REALLY believe) in the Bubble theory, may blind themselves to the possibity of prices doing anything other than what they want them to do.
Tabitha has a good reason to stop looking now ... her health.
Tabitha said...
“We finally heard back from our last-ditch effort lowball offer. We offered $470K, which involved maxing out what Navy Fed would let us borrow AND borrowing the downpayment from family AND draining our savings...probably a classic case of overextending to get a house, but we were so desperate to not have to rent again, and it is a fine house in the neighborhood we cherish, so we talked ourselves into it.”
Tabitha,
By once again renting, you have purchased the most cherished and valuable asset: Time.
Maxing out your borrowing power, draining your savings, borrowing from family…all during a housing down turn….come on, perfect recipe for disaster.
Moving sucks but, when all is said and done, you can take a deep breath….and breathe, financially and emotionally.
Surely you realize that home prices have fallen since last year. Several examples on this blog show drastic price cuts. And just for a moment forget about the price, at the very least even if prices are stagnate, you’ve got/will have many, many more homes on the market to choose from when your lease is up.
Lance said...
“I just worry that people who believe (and I mean REALLY believe) in the Bubble theory may blind themselves to the possibity of prices doing anything other than what they want them to do."
Billions and billions of write downs, government bail outs, former NAR president talking about 20% price cuts, continued rise in foreclosures, continued sales decline……..and it’s a theory?
Lance, it’s no longer writing on the wall. There is no wall sufficient to pen this fiasco.
tabitha: "We even wrote a personal note, explaining our circumstances and saying we were willing to stretch to the utmost and give them all we had.
They countered $630K."
Did they understand that $470K was the utmost or were they afraid that there was more money on the table?
Those numbers out there are unreal. $500K gets an OK place around here.
Here's a 6/2 SFH on a quarter acre, 3 miles to the Pentagon.
Here's a 6/2.5 on a smaller lot, repointed brick. 3 miles to the pentagon and 2 miles to Crystal City and the Metro.
Downside of these two places? The street out front is busy, you get all the Russell Road traffic from a high rise.
The 6 bedrooms likely include 2 basement rooms that barely meet spec.
Local public schools are iffy but then you home-school.
Upside? Close to wooded parks, bikeable neighborhoods, bike to the Pentagon, 10 minutes to the Metro kiss 'n ride.
KH,
I think I recall one of Tabitha's requirements being lots of acrage around the house ... something like 5 acres minimum. They'd have a hard time finding that close-in at any price.
Wow, 630k in PWC!
kh, the first house is less than 1500 square feet. There are probably 4 tiny bedrooms on the ground floor, and 2 basement bedrooms. I think Tabitha has said she has a large family and is looking for a much bigger house.
Lance, virtually all of Manassas is in some way overrun by MS-13. People who live close in cannot conceive of how bad it is there. Only Sterling Park is worse.
NARL, when you say MS-13, do you mean gang members ... or just people you think might be gang members because of their ethnicity?
"Billions and billions of write downs, government bail outs, former NAR president talking about 20% price cuts, continued rise in foreclosures, continued sales decline……..and it’s a theory?"
lol
You can lead a horse to water and all that...
You aren't dealing with someone rational. We have seen that in more than enough of his previous arguments.
Shoot, you are dealing with someone that still insists 90% of the area is stagnant or climbing...
Lance, Ace,
Yeah, you're not going to find acreage around here. 2nd best is my situation, I'm a few blocks from a park.
Ace, I haven't checked out either place but I'm certain that those bedrooms are like dungeons. Working with a half mill budget is hard but you can find a SFH for that amount if you accept some compromises.
Here's a place that we'd all like, 3/4 acre, quality construction, looks sharp. It's also on RUSSELL RD about 10 blocks from those half-mill houses. 2.3 Mill.
"Lance, virtually all of Manassas is in some way overrun by MS-13. People who live close in cannot conceive of how bad it is there. Only Sterling Park is worse."
Narl, that is simply false.
There IS a problem in certain areas but to say "virtually all of Manassas is overrun..." is just ridiculous.
I'm just repeating what my LEO pals tell me. I don't know anything about it myself.
kh, my point is that the houses you pointed out do not fit Tabitha's needs. That's why she's not interested in close-in houses. They might be just fine for other people.
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