Mortgages

[ianpadron]

Lmao I know silly me. Should have bought a house instead of worrying about highschool English.

Seriously appreciate everyone’s insight. Finances have come up a ton. Some background on me, 155k last year DTI 2 vehicles, 45k and 18k 3 credit cards 1 is currently 80% 1 is at 30 1 is 0. Which isn’t a huge deal can 0 those out. Credit is sitting at about 720-730 depending on where I look at it. Home market here is rough. Low inventory and it’s all pretty much brand new homes in the 4-550 range. Moving isn’t an option because of work. And adding my finance isn’t an option because her credit is absolutely worthless. We are aggressively trying to get hers built up to atleast get the 18k car potentially off my credit and under her name, but not sure what the time frame of that is.

Do you NEED those car payments? One of the biggest places folks blow money is on vehicles. I see young buyers all the time that don't think they can afford a house but drive $60k vehicles...blows my mind.

I'm not even saying "only pay cash for cars", but people can do with much, much less vehicle than they have.

For reference, when I was making your income, I drove a 1998 4Runner with 250k miles on it, cost me gas, and about $1k in parts/labor a year...absolutely zero shame in it.

Take your 2 monthly vehicle payments and look at what even half that amount tossed into an index fund monthly for 20 years would do...usually a good eye opener for folks.

I'd rather have a house I owned with 2 practical but cheap cars parked out front than renting with $80k of wheeled liability.

Food for thought!

 

[SDHNTR]

According to the White House, inflation has gone down as well. So take your numbers with a grain of salt.

It actually has. Do you understand what inflation is, by definition? Declining inflation doesn’t mean that prices have gone down. That’s deflation, and an even greater problem if it’s sustained. It’s entirely unrealistic to expect deflation as it’s quite rare, only happening a handful of brief times throughout our history.

Inflation is the rate at which prices increase. It has dramatically fallen over the last year. And I’m no fan of the bozo in the White House. Just a fact. Again, despite feelings.

 

[maxx075]

It actually has. Do you understand what inflation is, by definition? Declining inflation doesn’t mean that prices have gone down. That’s deflation, and an even greater problem if it’s sustained. It’s entirely unrealistic to expect deflation as it’s quite rare, only happening a handful of brief times throughout our history.

Inflation is the rate at which prices increase. It has dramatically fallen over the last year. And I’m no fan of the bozo in the White House. Just a fact. Again, despite feelings.

I was getting at that they are declining to include housing & energy prices in their calculations. You know, making the numbers fit their own narrative. Apparently that didn't hit so well.

You always have all the right answers though!

 

[SDHNTR]

I was getting at that they are declining to include housing & energy prices in their calculations. You know, making the numbers fit their own narrative. Apparently that didn't hit so well.

You always have all the right answers though!

See previous post 116. Food and energy inflation has actually decreased, even to a level lower than core CPI.

To your point, you apparently don’t like the data because it doesn’t fit your narrative either.

 

[ewade07]

Do you NEED those car payments? One of the biggest places folks blow money is on vehicles. I see young buyers all the time that don't think they can afford a house but drive $60k vehicles...blows my mind.

I'm not even saying "only pay cash for cars", but people can do with much, much less vehicle than they have.

For reference, when I was making your income, I drove a 1998 4Runner with 250k miles on it, cost me gas, and about $1k in parts/labor a year...absolutely zero shame in it.

Take your 2 monthly vehicle payments and look at what even half that amount tossed into an index fund monthly for 20 years would do...usually a good eye opener for folks.

I'd rather have a house I owned with 2 practical but cheap cars parked out front than renting with $80k of wheeled liability.

Food for thought!

This is me, I own 2 homes and drive a 2004 Toyota Tundra and a 1999 Toyota Rav 4. Bought both with cash. Are they the most glamorous things in the world? Not by a long shot. Are they fully paid for and suit my needs for what i do day to day? 100%. People put too much stock in a vehicle. They get you from point A to point B, who cares how they look or how expensive they were, its not a d*** swinging contest.

 

[intunegp]

I think another big issue driving the unsustainable growth of the housing market is that right around one in five houses are purchased by an investor. Here in northern Colorado, when what would traditionally be a great starter home (20+ years old, 2br 1 or 2 bath, no major renovations, livable but needs work, etc.) will almost certainly be purchased by an investor, have 40k of renovation done, and be back on the market in a few months for $100k more.

I just got on Zillow for the nearest "big" town...first house I clicked on, didn't even have to search:

2 bed, 2 bath, 1170 sq. ft. .3 acre lot
Built in 1956 but inside looks brand new...floors/cabinets/countertops/appliances/paint
Oldest history is that is was bought in 1988 for $39,000
Last sold 9/25/23 for $275,000, was originally listed at $250,000
Listed 3/14/24 for $479,000
Price dropped 10-20K at a time to $429,000 since then.

Somebody who already had the wealth to flip houses took a reasonably affordable starter home off the market. Many, many of the people who would have jumped on it at $250 or $275 can't swing it at $429,000.

 

[CorbLand]

Lmao I know silly me. Should have bought a house instead of worrying about highschool English.

Seriously appreciate everyone’s insight. Finances have come up a ton. Some background on me, 155k last year DTI 2 vehicles, 45k and 18k 3 credit cards 1 is currently 80% 1 is at 30 1 is 0. Which isn’t a huge deal can 0 those out. Credit is sitting at about 720-730 depending on where I look at it. Home market here is rough. Low inventory and it’s all pretty much brand new homes in the 4-550 range. Moving isn’t an option because of work. And adding my finance isn’t an option because her credit is absolutely worthless. We are aggressively trying to get hers built up to atleast get the 18k car potentially off my credit and under her name, but not sure what the time frame of that is.

Definitely look hard at your vehicles and if you can cut those back. I am an advocate for having reliable vehicles but be honest with yourself when looking at them. My 2001 Tundra started and stopped the same as my 2017 Tacoma and did it for 500 less a month.

 

[BuckRut]

Don't forget to account for the other costs that come with being a homeowner as well. Including but not limited to upkeep, taxes, insurance, HOA etc.

 

[180ls1]

Don't forget to account for the other costs that come with being a homeowner as well. Including but not limited to upkeep, taxes, insurance, HOA etc.

Good point. There actually is data supporting renting and investing the difference actually leads to greater wealth over the long run than owning and investing less.

Do I think that's what people should do? Not really. How practical is that? Not so much. It is interesting though.

 

[6.5x284]

Tough spot for anyone looking to buy these days. First thing I'd try to do is get out of that vehicle and credit card debt. I wouldn't be looking at to buy a home until I had the CC to zero and a vehicle payment down to $300 or less a month if you can't buy an older used car/truck in cash. A 5-7k car today is pretty damn reliable. Once you get to that spot, see what the max a month is you feel you can put away is (throw it in savings or an index fund for now). After 6 months of that, you'll know what your max mortgage you can spend a month is (including any tax, HOA, and insurance). That 6 months of putting it away as a test case can be used as your closing costs.

Good luck!

Also, I was a wildland firefighter through college in eastern WA with the Naches IA and your picture sure made me miss those days!

Best of luck to you and your family!

 

[Andrew12gauge]

Good point. There actually is data supporting renting and investing the difference actually leads to greater wealth over the long run than owning and investing less.

Do I think that's what people should do? Not really. How practical is that? Not so much. It is interesting though.

That sounds like data from somebody that doesn’t have a brain. If my wife and I had not bought our first home in 2013, then upgraded in 2018, we probably would’ve paid double what we’ve paid in mortgage payments, HOA dues, and upkeep.

We have a $1300 mortgage payment in an area where 2 bedroom apartments tend to average $1500/mo and a 3 bed 2 bath home rents for $2200/mo

I have a lot more money left over at the end of every month for investing by saving 40% of the money I would’ve paid on rent, not to mention the $250k in home equity that I have should I decide to sell my home


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[180ls1]

That sounds like data from somebody that doesn’t have a brain. If my wife and I had not bought our first home in 2013, then upgraded in 2018, we probably would’ve paid double what we’ve paid in mortgage payments, HOA dues, and upkeep.

We have a $1300 mortgage payment in an area where 2 bedroom apartments tend to average $1500/mo and a 3 bed 2 bath home rents for $2200/mo

I have a lot more money left over at the end of every month for investing by saving 40% of the money I would’ve paid on rent, not to mention the $250k in home equity that I have should I decide to sell my home


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I would suggest you research it and not just use a data point to form your opinion.

 

[CorbLand]

Good point. There actually is data supporting renting and investing the difference actually leads to greater wealth over the long run than owning and investing less.

Do I think that's what people should do? Not really. How practical is that? Not so much. It is interesting though.

I have seen this and I cant see how it pencils out. I havent looked into it much but it doesnt make sense to me. I know one of the guys that pushes/pushed this theory also happened to own a very large number of rentals. Couldnt be some bias in his opinion.

 

[Hnthrdr]

Check out a 2/1 buy down, potential seller concession, that maybe your RE broker could help you with, gets you a 4.9 rate year one 5.9 rate year 2 and 6.9 ( current rate) 3-30, can refinance at any time during the loan, if you want a good mortgage broker I have a great guy, used him on 5 purchases so far and he hasn’t been beat yet, DM me if you want his info

 

[BuckRut]

I have seen this and I cant see how it pencils out. I havent looked into it much but it doesnt make sense to me. I know one of the guys that pushes/pushed this theory also happened to own a very large number of rentals. Couldnt be some bias in his opinion.

I agree. If you take the equity out of it maybe it would be close. I am definitely not suggesting that these are things that should dissuade someone but rather that they aren't minor costs and can really be a pain if you didn't plan them in your budget.

 

[180ls1]

I have seen this and I cant see how it pencils out. I havent looked into it much but it doesnt make sense to me. I know one of the guys that pushes/pushed this theory also happened to own a very large number of rentals. Couldnt be some bias in his opinion.

Yeah, real-world applicability is tough. I think it shows you don't have to own and the power of compounding interest, which many do not realize.

It's a long play largely dependent on the user investing the money saved and not pissing it away, humans are bad at that. Most of the meat is after several decades where you have the larger stock portfolio of the renter compounding at a higher rate compared to the home owner.

 

[RS3579]

Look at what the PMI is going to cost per month. Put all extra money towards the principal and as soon as you reach that 20% Loan to Value call the mortgage company and get the PMI eliminated. I may only take 6 months to a year to reach that LTV adding extra to the principal. You can decide for yourself if you want pay off early. I payed mine off early with a 3.5% rate and I don’t regret it at all. One less payment is an easier life.

 

[Moosehunter]

Real question...how do u guys make so much money?
Like really.

 

[180ls1]

Real question...how do u guys make so much money?
Like really.

Find a career and keep specializing in it, give it time. The higher the barrier of entry the better.

 

[Hnthrdr]

Real question...how do u guys make so much money?
Like really.

Marry a doctor…