Ask MetaFilter questions tagged with housing and mortgage

Wants to work hunting scammers

CollectiveMind — Thu, 15 Oct 2009 16:39:53 -0800

Someone I know wants to find a job as the person who is portrays themselves as seeking housing or employment, and is either preferred or discriminated against because of their race, sex, age, etc. I would guess a job like this; someone who portrays an apartment or job seeker, might be offered by the state, or the feds or a reputable non-profit, but I don't know. They are even interested in starting out pretending to be a customer who is victimized by mortgage fraud or auto garage scams as part of an investigation. Does anybody know which agency to approach and what credentials she might need to get her foot in the door?

Can we afford this $445,000 house? How can you tell?

Anonymous — Sun, 20 Sep 2009 15:16:38 -0800

Can we afford this house in California (just an example)? What "rules of thumb" or other measures should I use to determine what is "affordable"? I have used many of the on-line "calculators" but I feel like there are too many variables which are not explained and there is too much variation. Can you look at our situation and help suggest how much house we can afford while remaining fairly conservative? What other "rules of thumb" or standard rules should I consider when determining how much house we (or anyone) can afford?

Total income: $120,000/year
House price: $445,000
Loan: FHA with 3.5% down
(the down payment is not set at this amount but it is so common that we use it when making comparisons).

We're fairly frugal and save more than average. We're both local government employees. The house is in Northern California (Bay Area). The house included above is just an example.

Conservative rule of thumb for front end debt-to-income (DTI) ratio -
28% of your pre-tax income = reasonable annual payment (before considering tax benefits):
$33,600/year
or
$2,800/month

Conservative back end DTI ratio:
36% of pre-tax income minus other debt payments.
We have about $600 of debt (student loan) payments/month.
$43,200 - 7,200 = $36,000
or
$3,000/month

I have received several "Good Faith Estimates" (GFE) for a loan in these conditions - the highest GFE (with most fees filled in) places our monthly payments at $2950.

Is that reasonable based on our income? How do you make that decision?

The tax rate for the city at issue is 1% (low) and no flood insurance is required. This is included in the GFE above. We also have a reasonable emergency fund.

Email questions/suggestions/issues to canweaffordthishouse@gmail.com

Thanks mefites!

How do normal people pay for custom homes on land?

mathowie — Sat, 30 May 2009 16:27:25 -0800

Dream Home Filter: How does one go about financing the buying of land and building of a custom house? I need help with land loans vs. buying land with a house on it (to improve/tear down), construction loans vs. home loans, etc I've always wanted a couple acres of land and a custom designed house with a kitchen that works exactly as my family wants it to, etc, but I've never known anyone that did it directly (I know a few people that came into money and paid cash for new custom homes).

I understand from a bit of research that you could get a loan for the land you buy, then a construction loan to build a house, and when it is complete, it can be rolled over into a standard home loan, but I've heard the land loans are hard to get and the construction loans are high interest rates. I've been told by some people that buying land outright is the only way to go, but I don't have a few spare 100s of thousands of dollars to do that.

Let's say I currently live in a home worth $300k, and I'd like to someday build my own $200k custom home on $100k of land (keeping my current house until the new one is done, then putting it on the market). Are the loans necessary to buy land and build a house tough to get with a lot of interest? Is buying land with a manufactured home on it that could be removed be a better way to go?

Who to talk to about buying a home?

lore — Mon, 27 Apr 2009 08:46:02 -0800

Who is the best person to give me information on the housing market? My partner and I are looking into buying a home. Not being experts in real estate, we'd like to have someone to consult with on basic questions about the current housing market, including the best places to buy property in Northern California (or beyond) and the legal and financial aspects of buying a home, including paying cash vs. getting a mortgage. The thing is, we don't really know who to talk to about these things.

Our first thought would be to talk to a real estate agent, but we have two concerns: 1) that a real estate agent would have a vested interest in talking us into buying, and 2) that any real estate agent we talked to would not have sufficient experience about the market outside of their "neighborhood".

Where should we go for objective and helpful advice on the housing market and the particulars of buying a house?

Short sale? Walk away? Run?

anthom — Wed, 15 Apr 2009 04:16:50 -0800

My wife and I need to get out of our house ASAP for reasons both financial and mental-health-related. I've been told we may need to look into a short sale, but researching the process is making my head explode. What, if any, are our options? (more inside, obviously) We bought this house 4 years ago, on two incomes, intending to start a family. Short version - it hasn't happened yet, and won't for the foreseeable future. This, and a few other stressors, helped bring my wife into a depressive spiral, which led to her leaving work indefinitely about a year ago.

We currently live on my salary plus a pittance from her long-term disability - we're working on getting more, but Social Security is notoriously slow to approve this kind of thing. We're not behind on any payments yet. We've got three loans for this house - we financed initially with an 80/20, and between the two have managed to pay down about 10% of the principal. We also have a loan through our town that we used to pay for a new well and replacement septic system. We have a little bit in savings, but if we continue to pay the minimum payments on all the loans (and eat, keep utilities current, etc.) it'll be gone in another 6 months or so.

Her counselor has mentioned that living here may well be an additional stressor for her, and that we might need to work on finding a way out to help her recover. It's an older house that, while livable, definitely needs a lot of work that we either can't afford to have done, or don't have the energy or ambition to tackle right now. We have an offer from a family member to stay with them if we need to get out, and neither of us is too proud to take them up on it.

I did the online credit counseling at 995-HOPE’s website, and the counselor there suggested putting the house on the market, but mentioned that we may need to consider a short sale. It’s highly unlikely, if we sell the place, that we’ll get anything close to what we owe on all the loans, and we really don't want to foreclose.

Where we’re not in arrears with either of our mortgage companies, is short sale even an option? How do we find an agent willing to put in the extra work for less money? Are there other options we haven’t considered? It’s all incredibly confusing and frustrating - if you can, please help us, hive mind!

How to make a bet on interest rates

thenormshow — Sun, 05 Apr 2009 10:17:22 -0800

How do I, as a small investor in Canada, make a bet, (preferably leveraged) as to what interest rates are going to be in 5 years? My wife and I are buying a condo, and I want to protect us from being hit by high interest rates. (We bought pre-construction, there's no way out of it, and we've accepted it and moved on. We move in in a year.) Problem is, in Canada, people usually take a 5 or 10 year fixed term, and the rate for a 5 year term is at 4%, while a 10 year term is at 5.25%. A 25 year mortgage is crazy expensive. Check out www.canequity.com.

Really what I'd like to do is buy something akin to an out of the money call option. Spend a small amount to make a bet that will likely be worth zero, but pays off huge if an unlikely event happens. There's general agreement that rates are likely to be higher 5 years from now. The bet I want to make would be on rates are substantially higher than pretty much anyone expects.

Essentially, I want to take the lower, 5 year rate on our mortgage, and then hedge, so that we're not in pain if the rate goes up huge in the meantime. Based on the price of this bet, I might be persuaded to take the 10-year term.

I don't know what kind of security I could buy that would do this. I know that certain sectors of the stock market are interest rate sensitive, but I want something more closely linked to interest rates.

Thanks!

Seeking guidance with financial planning (loans, down payment, more)

mintchip — Sun, 20 Apr 2008 16:55:09 -0800

Seeking guidance with financial planning (loans, down payment, more) I've searched through the questions already asked but didn't see anything quite like this. My situation:

1. I am graduating with a very large student loan debt (more than 50k, less than 100k).
2. I have excellent credit.
3. I have no other debt or loans.
4. I have some retirement savings.
5. I don't expect to have a huge salary.
6. I am considering going back for another degree in a year or two--probably one that would result in a significantly higher salary

I'm going to move home for a year or two. I am considering using my cost savings to pay off a large portion of my loans. This appeals to me, except for a few reasons:

1. If I do go back to school (and this is by no means a definite), will having a large debt be to my advantage as far as getting need-based grants and other aid from my school?
2. It seems like housing prices are going to keep going down. Many of the people I know who are financially well off got that way by buying their home when real estate values were low. I could potentially save a large down payment (>20%) in a short amount of time. Also, although my loans are burdensome, the rates aren't horrible (they are all federal loans) and with inflation they will get a little less painful over time (in other words, a fixed monthly payment of $xx will feel like a lot less a few years into the future when money has less value).
3. Although unlikely, is it possible that the government would offer debt relief opportunities for people saddled down by student loans--let's say if the economy gets even worse?

I could also pay off a big chunk of the loans (but not all) and then start saving for a down payment.

(Is it worth it to see a financial planner?)

Refinance through the same bank?

condour75 — Thu, 21 Feb 2008 07:05:32 -0800

Is it possible to refinance through the bank that holds your mortgage? Is it desirable? Is it easier? I bought a house in August with a Bank of America no fee mortgage at 7%. I'm wondering if a) it makes sense to refinance now, even just a few months in, and b), whether I should approach the mortgage holder first and see what they can do. It seems to make sense that they'd want to keep the business rather than letting it go to another company, but I'm wondering if I'm missing something, since the web seems to have little info on doing so.

Other salient facts: 30 year, fixed rate, 10% down. I'd be willing to consider a 15 year mortgage if the rate is low enough now, because we could probably afford it. We plan on staying here for at least 5 to 10 years, possibly longer.

Moving somewhere affordable!

hamster — Thu, 14 Feb 2008 12:22:58 -0800

Can I sell my place if I'm on a repayment plan for its mortgage? I own a home, but have had trouble making payments on the mortgage--my parents talked me into buying it, but it's been too much to handle on my salary.

I worked out a payment plan with my lender to avoid foreclosure, and will be able to get things back to normal by May.

I'm planning to move across the country this summer, and want to list the place as soon as possible because I know the housing market's crap. How would this work if I'm not up on payments?

Also, my parents don't know that I've worked out a plan--this is a long story about family dynamics. They will be helping me to list the place, but I don't want them to find out what's happening. When will I need to come clean? When we have a buyer? Before I list it?

Thanks in advance.

Do you have to make mortgage payments for the deceased?

salvia — Sun, 22 Jul 2007 18:49:19 -0800

Someone died. Does her family have to keep paying the mortgage payments? Does interest keep accruing? Can they rent it out during this period? There was no will. (This is in California.) The "can they rent it out" part becomes more crucial since they wouldn't mind keeping the house as an investment property, or at least holding it until the market strengthens. But getting their own mortgage for the property is only going to get harder (and ultimately be more burdensome) the more unpaid interest gets tacked on to what is owed. The house was bought fairly recently, and since it's not clear just how bad the market is now, it's not clear what profit (if any) would come from the sale of the house at this point. Could they stall until the market solidifies?

Though there was no will, no one is going to contest who should be the executor/administrator of the estate or who should inherit the property.

I would also appreciate any "simple guide to probate in California"-type resources. I've been even thinking about finding some law-school-cramming book. (The BarBri property guide?) They're going to hire a lawyer but it's going to take a couple weeks to do that.

(You would think this would be an easy question to Google, but "get a mortgage in Death Valley!" has been the least of my search result problems.)

Should I foreclose on my house?

simpleperson — Mon, 25 Jun 2007 09:26:46 -0800

I have a crappy house that is falling apart and keeping me from moving on with my life. Should I foreclose on my house? I am in a bad position in life, and would appreciate any input from the MeFi crowd.

2 and a half years ago, when I was 25, I purchased a house on an FHA loan. At the time, I thought buying a house was the right thing to do, and I thought I was getting the right house. I thought wrong.

As it turns out, the house has been a maintenance nightmare. It was gut rehabbed by the previous owner, poorly. (In fact, by buying it I think I got scammed a little.)

Plumbing problems, leaky roof(s), faulty gutters, broken windows, and a dilapidated garage seem to never stop. We tore out a bathroom and discovered unrealized structural damage (a previous infestation of termites). And, I've been robbed.

The house is in an urban neighborhood that I thought was safe and quiet but seems to be getting worse. The housing market here has plateaued, and my house has suffered since I bought it, making me think it is probably worth less than when I bought it.

And, I have realized, even if it was all fixed up, it would still be a crappy house. It has a poor floor-plan and is not the most "livable".

I bought it for $79k, I owe $76k.

Now I just want out. This thing is sucking the life and energy out of me and I want to move on with my life. I am 28 and have opportunities that this is holding me back from.

To sell it, I need to fix it up - or at least the egregious issues. I estimate I would need $3000 - $5000 for this. I don't have any savings, basically.

Even if I put that money into it, I still have to sell the place to someone. When I bought it, it was on the market for over 4 months. It costs about $800/month to keep. So this is potentially another $3000+ to pump into it.

But if I could just get rid of it - foreclosure? I know my credit would be screwed up but I could move on with my life. I could take that $3-5k and invest it, and maybe by the time I was 35 I would have some savings and good credit again.

Should I consider foreclosing? I had a bankruptcy before and got past it, I think I can do it again.

But I do want to go to graduate school (would need student loans), and to get a car loan at some point.

(Note: I have moved out of the house, have free rent at my parents. Just trying to get rid of it at this point. But I do need to get out of Mom's _sometime_.)

Any advice for someone who bought a lemon?

thanks Mefi!!!

what to look out for when buying a condo?

scarabic — Tue, 26 Sep 2006 20:54:25 -0800

I have made an offer on a condo and it's been accepted. I'm in the contingency period and now is my chance to investigate/negotiate anything that might be a problem down the road. I'd like general advice on what to watch out for in a condo situation, and have included more specific details and questions inside. It's the upper unit in a 2-unit building. There is a common yard, common laundry room out back, and a common storage room out back. There are deeded parking spaces for the unit on the lot.

Currently there is no permanent owner in the other unit. It's being prepped for sale by the same couple who are offering the upper unit. They say they are 2 months from finishing and selling it. This is my first home-buying experience.

1) HOA fees have not been established. My agent says that the estimated monthly is low, but I'll need to sort that out with the owner later. That seems odd to me. Why not sort it out now?

2) The common laundry room is currently non-conforming and was cited by the city. The plumbing was disconnected. As part of their counter offer, the owners disclosed this and said that while their intention was to complete the laundry room with permits, that might not be possible. In such a case, they say it might be completed in a non-conforming manner. I think they're being as honest and up front about it as they can be, but it feels weird to have that room be part of the offering, yet have its status still be in flux. I want to know what I'm buying, right down to the common laundry room out back. They wrote this uncertainty into their counter-offer, which I signed, but I'm wondering what I can do now to pressure for a resolution or concession on this point.

3) The CC&Rs stipulate tighter restrictions on cats than I'd like. Indoor-only, no more than 2... My agent says I'll have to negotiate an ammendment later and that it's not a big deal. But I don't want to commit to a rule I plan to break. How mutable / negotiable are CC&Rs in a situation like this, where there are only 2 units and the other one is presently vacant?

4) What else do I need to know about condos and what should I watch out for?

5) Any advice for the finance / lending side? My dad is a former lending banker and will be helping me, but advice is welcome.

THANKS!

Social stigma in rich people's housing

acoutu — Fri, 28 Apr 2006 16:06:27 -0800

Will a child face social stigma for living in a condo? I live in Vancouver, Canada. The housing market here has gone wild. The average house price in the metro area is 757,750, but, in "nice" neighbourhoods, it's now about $1M. You could live further out, but the housing prices remain high, since people want more for their money. Also, living further out means you'd need 2 cars instead of one -- so add another $500+ a month.

My friends and I both currently live downtown. The schools downtown are pretty bad, so this isn't where we want to stay with our small children. Today, at a toddler group, a couple of us were discussing whether it made sense to move to a nice area and live in a condo, instead of a house. My friend (psychiatrist married to a chartered accountant) was concerned that her son would face social stigma for living in a condo when all the other families had houses. She was worried he'd be treated like a poor kid. I said that the people I knew who lived over there -- even the ones who'd bought before the upswing and had just $500k or $600k mortgages -- were struggling under the strain of their payments, rising interest rates, increasing fuel costs, and the like. I said her son and my son would be in a much better position to be the kids with nice clothes, vacations, trips to museums and all the things that you'd hope upper-middle class families would enjoy...except for a house. Meanwhile, the other kids would be from house poor families. However, I don't know if this is true. My husband and I are not originally upper-middle class and we grew up in small towns where everyone had houses.

So, what does AskMefi think? Will a child face social stigma for living in a swanky 2BR condo on the nice side of town, if their friends live in houses?