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Discussion Starter #3
If you're going to be in it for several years, I don't think there's ever a real bad time to buy.

Just MAKE SURE you do NOT get an ARM of any kind. Interest rates are still low historically, so the chances of them going down anytime soon are very small.

BTW, congratulations! I can't wait to be settled enough to buy.
 

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Discussion Starter #5
esoteric said:
When the foreclosures are well into swing, I might upgrade...
I really wonder about this in SoCal.

There are obviously people that are going to be in this spot soon. These ARMs are going to kill some people. I have several neighbors clearly living beyond their means.

But there are SO many jobs still unfilled down here...I dunno, we'll see how it plays out.

If the economy slows down, and ARMs keep going up, there will definately be a crash.
 

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Discussion Starter #9
MrX954 said:
Okay I'm dumb and still live with my parents so what is an ARM?
Adjustable Rate Mortgage

You get a lower rate when you buy your house, so the payments are smaller, than with a fixed. But as interest rates rise so does your mortgage. If the value of your house is appreciating faster than you can get the mortgage papers done, and you want to trade up, this makes sense. You're building equity so fast you can sell at anytime you need to for a big profit. Here in Cali, and where Phobe is, many people have "made" $50k in 6 months from equity.

Since many people that are getting ARMs in this market (with fixed rates that have been at record lows for years) do so because they can't afford a "traditional" fixed rate mortgage, and the huge, short-term equity increases are basically over in Cali for now...as rates rise, lots of people are going to lose their houses.
 

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Or if you plan to sell your house in three years and can get in an ARM at 4%, then do it. But only if you know for sure you're selling. Otherwise it is a bad gamble.
 

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MrX954 said:
So if rates drop do mortgages drop with them?
HA ha ha ha ha!
Well, yes, IF they go down, the mortgage would go down also.

BTW, I just sold my four-plex. Escrow closed last week. I'm now positioned to swoop down like a vulture as soon as the fire sale starts. This is gonna be a killing.:thumb:
 

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Discussion Starter #13
MrX954 said:
So if rates drop do mortgages drop with them?
Yep, but that won't happen, until rates have gone way up for a while. Probably over a decade.

nedro said:
BTW, I just sold my four-plex. Escrow closed last week. I'm now positioned to swoop down like a vulture as soon as the fire sale starts. This is gonna be a killing.:thumb:
Nice. :cool:
 

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Discussion Starter #14
BDA116 said:
Or if you plan to sell your house in three years and can get in an ARM at 4%, then do it. But only if you know for sure you're selling. Otherwise it is a bad gamble.
I know you know this, but for other, and you are sure you can sell in 3 years.

If the prices drop, lots of these people won't be able to. That's why I talked about appreciation so much above.

There's a reason a traditional mortgage wants a 20% down...that's the buffer for house prices falling. If you don't have that 20% in liquid assets (or equity) you're in a risky position.
 

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luvtolean said:
I know you know this, but for other, and you are sure you can sell in 3 years.

If the prices drop, lots of these people won't be able to. That's why I talked about appreciation so much above.

There's a reason a traditional mortgage wants a 20% down...that's the buffer for house prices falling. If you don't have that 20% in liquid assets (or equity) you're in a risky position.
Yeah, should have stated that I guess.
They'll nab you for mortgage insurance if you don't have the 20% as well.

While this area isn't oversold and as overvalued as some the cycle will work its way here as well. This is part of the reason I've axed the idea of being the developer/builder on our property and have been taking real offers on it instead. The numbers are such now that it is worth going that way rather than taking the gamble with building. I really doubt any slowdown/downturn is any closer than a good 5-7 years off around here, but it will happen again.
Then the upswing cycle starts again.
 

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If the prices of houses drop, too bad my property tax wouldn't go down. I'm sure the town will find a way to keep reassessing me and raise it, even if the amount I could sell my house for decreased. :mad:
 

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MrX954 said:
So if rates drop do mortgages drop with them?
Yes but the change is not instaneous. Thus the rise and fall are both damped to some degree (depending on the contract terms) However if you are a fixed rate you can refinance (some cost) while if things rise your cost does not.
 

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HondaGalToo said:
If the prices of houses drop, too bad my property tax wouldn't go down. I'm sure the town will find a way to keep reassessing me and raise it, even if the amount I could sell my house for decreased. :mad:
Thats a fact! You want your equity to go up but your assesed value to go down so they can't soak you with more property tax. Although they seem to be doing the max where I live regardless. :(
 

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By this time Friday wife and I will be mortgage free :)

It may be a hovel, but it's all mine (and hers of course). Feels kind of liberating, somehow I inow feel "safe" or safeish at least, financially first time ever.
 

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fo rizzle. My arm was under 4% and now its still under 5%. It can't change until this time next year and no matter what interest rates do, the worst it'll be is 6%. It can only go up 1% at a time with a max of 5 total points.

If you don't have to pay the interest, I don't think you should. At some point I'll refi @ a fixed rate, but I really don't think I'll be in the place that long to be honest...
 
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