Why do articles like this come out just before I buy a big house? - Page 4

dvs112 · #31 03-17-2007, 03:51 PM

From the thread that I started, similar to this one, though my financial situation is much different:

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I recently got engaged and plan on getting a place with my fiance in August. I've been working for a large software company for a year after graduating college and I've been contributing to my 401k and putting a little money in savings.

Basically, we don't want to live in an apartment (rent would be about $900/mo). I've looking into renting a place like a town house or a stand-alone house and that rent seems to be in the $1k+/mo range. I looked at what sort of rates I could get (via the internet, haven't been approved) and if I take out a mortgage for $250k, it's about $1400/month.

I'd likely have to get private mortgage insurance as well, since I don't have much money in savings for a down payment. My credit is ok. I have a payment for a car I financed last year (400/mo). I have a couple thousand balance on my credit card that I can pay off, but I don't know whether or not it would be better to carry the balance and have more for a down payment.

At my job right now, I'll make about $65k this year (should be getting promotion/raise next week, but I don't want this to be a deciding factor). If we got a house, we would probably stay there for at least 4 years. My fiance is trying to find a teaching job in the area and now she works at the school, but only makes about $1800/mo.

I feel like renting is going to be almost as much as buying a place and that by buying, I get a number of benefits, like deducting mortgage related costs and having an asset, rather than giving money to someone else every month.

What's my play here?

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scotchnrocks · #32 03-17-2007, 04:55 PM

[ QUOTE ]
From the thread that I started, similar to this one, though my financial situation is much different:

[ QUOTE ]

I recently got engaged and plan on getting a place with my fiance in August. I've been working for a large software company for a year after graduating college and I've been contributing to my 401k and putting a little money in savings.

Basically, we don't want to live in an apartment (rent would be about $900/mo). I've looking into renting a place like a town house or a stand-alone house and that rent seems to be in the $1k+/mo range. I looked at what sort of rates I could get (via the internet, haven't been approved) and if I take out a mortgage for $250k, it's about $1400/month.

I'd likely have to get private mortgage insurance as well, since I don't have much money in savings for a down payment. My credit is ok. I have a payment for a car I financed last year (400/mo). I have a couple thousand balance on my credit card that I can pay off, but I don't know whether or not it would be better to carry the balance and have more for a down payment.

At my job right now, I'll make about $65k this year (should be getting promotion/raise next week, but I don't want this to be a deciding factor). If we got a house, we would probably stay there for at least 4 years. My fiance is trying to find a teaching job in the area and now she works at the school, but only makes about $1800/mo.

I feel like renting is going to be almost as much as buying a place and that by buying, I get a number of benefits, like deducting mortgage related costs and having an asset, rather than giving money to someone else every month.

What's my play here?

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Provided your wife is going to be bringing in at least the $1800/month, $250k is affordable in your situation.

What city are you in and how many sq. ft. is this property? What are property taxes? How much does a similar house rent for?

SossMan · #33 03-18-2007, 06:07 PM

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Here is my wild azz guess probability distribution what your house would be worth in 5 years before transaction fees.

Gains_________Probability
5%+___________.10
0 to +5%_______.25
0 to -5%________.50
-5%+__________.15

This is before the 6% agent commissions, but I predict that via technology these fees will be minuscule(less than 2%) or non-existent by then.

Edit: Percentages are in Nominal dollars. Are you asking this because you are planning to get an ARM?

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I am constantly amazed at the ability of otherwise smart people to make retarded statements about things they know nothing about.

These numbers have zero basis.

I can't stress this enough....

REAL ESTATE IS LOCAL. UNLESS YOU HAVE INTIMATE KNOWLEDGE OF THE IMMEDIATE STREET, NEIGHBORHOOD, SECTION OF TOWN, CITY, COUNTY, AREA, ETC...THEN STFU.

Strickly Bidness · #34 03-18-2007, 06:20 PM

soss,

while i agree w/u 100%, i do think its unfortunate that the liberal media continues to trash the real estate market without qualifying their articles with the sort of logic that you and i employ.

ahnuld · #35 03-18-2007, 06:45 PM

"liberal media" and real estate dont have much in common as far as I know. And the trashing makes sense looking at recent numbers when considering the entire nation.

black_russian · #36 03-18-2007, 07:57 PM

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A home is an investment.

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Really, my home costs me a lot of money every month. Pretty bad investment! I guess it appreciates over time but I dont view my home as an investent....Robert Kyosaki taught me that.

SossMan · #37 03-18-2007, 08:52 PM

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soss,

while i agree w/u 100%, i do think its unfortunate that the liberal media continues to trash the real estate market without qualifying their articles with the sort of logic that you and i employ.

[/ QUOTE ]

a headline of "foreclosure rates at historically normal levels" just doesn't sell as well as "foreclosure rates quinzuple!!"

being a statistician, you should know the ways that numbers can be manipulated any which way. What amazes me is that otherwise smart, logically thinking people have some great opinion on where real estate is headed without the slightest notion of context.

Indianapolis is not the same as Vegas is not the same as San Mateo is not the same as Riverside..etc....

Strickly Bidness · #38 03-18-2007, 10:21 PM

[ QUOTE ]
[ QUOTE ]
soss,

while i agree w/u 100%, i do think its unfortunate that the liberal media continues to trash the real estate market without qualifying their articles with the sort of logic that you and i employ.

[/ QUOTE ]

a headline of "foreclosure rates at historically normal levels" just doesn't sell as well as "foreclosure rates quinzuple!!"

being a statistician, you should know the ways that numbers can be manipulated any which way. What amazes me is that otherwise smart, logically thinking people have some great opinion on where real estate is headed without the slightest notion of context.

Indianapolis is not the same as Vegas is not the same as San Mateo is not the same as Riverside..etc....

[/ QUOTE ]

I know, I'm just venting

Big TR · #39 03-19-2007, 08:29 AM

An outstanding example was in this Sunday's Chicago Tribune, the tamer of the two Chicago papers. They had a huge article on the substantial increase in sub-prime foreclosures. Big zip code-based graphics were showing how much foreclosures had increased over the prior year. Some lady can't pay her refi mortgage on a house that's been in the family for 50 years. Etc., etc.

Then you go into the middle section of the paper and they show a graph of the percentages back to 2000. Today's disturbing increase to 6% is nothing when compared to the damage that was done in 2000 and 2001 when the percentages were up around 16%.

Good times.

SossMan · #40 03-19-2007, 04:38 PM

[ QUOTE ]
An outstanding example was in this Sunday's Chicago Tribune, the tamer of the two Chicago papers. They had a huge article on the substantial increase in sub-prime foreclosures. Big zip code-based graphics were showing how much foreclosures had increased over the prior year. Some lady can't pay her refi mortgage on a house that's been in the family for 50 years. Etc., etc.

Then you go into the middle section of the paper and they show a graph of the percentages back to 2000. Today's disturbing increase to 6% is nothing when compared to the damage that was done in 2000 and 2001 when the percentages were up around 16%.

Good times.

[/ QUOTE ]

my favorite is when they 'zoom in' on a specific time period and they cut off the top and bottom of the graph to make it look more impressive and not give it any context whatsoever.