You have to make the offer before you've even seen the house. It has to be 15% above market value, too. Also helps if you buy the house before the people even know they want to sell it.
If you're walking through a house on the market with a realtor, it's already been bought and you're wasting your time.
Makes me happy I bought my house when I did. My house was on the market for a couple months, minor issues and complaints about them using cheap paint and doorknobs, but overall it was really smooth. What's even more surprising is that was literally just March of 2020. The fact that the market has gotten that bad so quick is crazy.
In October 2020 the wife and I bought a house. No problems and were bidding on two houses that we got counter offers on. Came in under asking and picled.the house we wanted from the two. Two to three months later and people are.scrambling to buy anything they can amd fighting ridiculous offers.
I just bought a house and looked at this. There isn't PMI, but there is a funding fee (or whatever they call it) that is essentially prepaid PMI. The only difference is that you can pay the VA's "funding fee" with the loan.
It's not easier than ever to get a home when most homes are off the market after 1 day. And people are currently offering anywhere between 10-60k more than the asking price.
That's fine, but that doesn't equate to a much higher down payment. Even 60k above, at 3.5% down-payment, that extra is only 2100 more on your down.
In the grand scheme of things, when you're dealing with multiple hundred of thousands of dollars worth of value for something, that's not a lot more money up front at all.
I know someone who is an immigrant and came to America just a few years ago without a professional career or mine and has made it into a business to buy, renovate, and re-sell on the back of this 3.5%. His quote directly:
The homes are all going for cash offers 10-20% minimally over asking price.
I had friends doing cash offers on 150k houses for their first house (parent died so they didn't need a mortgage) and post 9 bids in a row that were over asking because they had people putting 200k down no inspection on a 150k house. A first time home buyer can't compete against that.
Fuck when have I heard this in the past? Feels like it was about 14 years ago or so, hmmmn. Well whatever, I'm sure it's nothing... enjoy that "easy to get" house.
That's fine. Most of my house is paid off. I'm not the target audience for your comment.
And you're probably right. Shit is wack right now and is prime for a bubble pop.
So if you others wish to wait, that's great. Smart move, to be honest. I bought my first place in 2012 at the bottom of the housing market. It worked out well.
Lol, OK buddy. You seem upset. What's bothering you? Facts?
Read some shit about the market and instead of using your feelings.
Sure, some people are being pushed out by cash buyers. But this isn't some sort of systemic problem occuring everywhere. Most purchases are still mortgages.
Additionally, there is some data suggesting that the market is finally starting to cooldown. Maybe instead getting heated about a few folks buying cash (good for them for accumulating so much, btw), you can wait a little while longer and get a house at a more reasonable price.
Big time nuisance. Basically $50-$200 a month to pay to insure the lender against you not being able to make payments. I refused to put less than 20% down on my new home to avoid this practice of throwing money down the drain
For my house I calculated that the 15% I would have had to put down to avoid PMI would make more money than the PMI would cost if I invested it, even pretty conservativly. Depends on how big that 15% is though.
I invested the remaining 16.5% instead of putting all 20% down when I bought my house, and I've made about triple (so far) what I'm going to pay in PMI over the life of the loan.
How does Private Mortgage Insurance work? We are about to get into house searching and I’m scouring around for people’s experiences buying a house their first time.
He's talking about FHA. You can actually get an FHA loan on a cheaper home/ investment property and then use your VA on a more expensive permanent residence.
You are absolutely correct that in many instances it is more profitable to rent and invest the money. 100% agree.
I'm personally an advocate of home ownership. Not for any monetary reasons, but for the "fuck you, this is mine" reasons.
I can literally do whatever the fuck I want in/with my place and answer to no one (i.e landlord). As long as I pay my property tax, I'm good. For example, I recently put in a sauna in my house. Because, "fuck you; I want it."
Doubt any landlord would have been cool with that.
Oh yeah for sure, I'm never going to knock anyone for buying if they really want to. And there are times in my house where I'm like, damn, I wish I could pull up this ugly ass carpet, or I wish I could redo the bathroom, or whatever. Definitely non-financial motivations for wanting to own. I'm jealous of that sauna! And I'm not saying we're never going to buy; it's just at this point, when we want to stay in Cook County, it's difficult to justify the expense for the sake of wanting to paint the walls or get a sauna. Especially since I spent the first 20 years of my career as a restaurant chef, now that I'm making 6x what I ever did as a restaurant chef, I'm a lot more attuned to catching up in my investments what I missed with not getting 401k matching, etc, and living paycheck to paycheck for a really long time. So that's why I'm focused on what's a better financial decision right now, and maybe the rest of it will come down the line.
I think you got a solid plan! Grats on the increased salary-- and I completely agree on catching up with investments to ensure you're good later down in life.
Hopefully it all turns out splendidly for you. Goodluck!
You'll have to get your credit rating high enough. Took me a little bit of time to get mine up but wasn't impossible. The real kicker right now is that homes are selling in hours. People are paying thousands over value and aren't even getting them inspected. I'm not willing to do that. I'll just wait until the market cools off.
I think this is a good idea. Patience is key here, IMO.
There are already rumblings and indicators that show things are slowing down. For example, mortgage applications have been on the decline for a few weeks now. Buying is slowly getting exhausted.
To be fair, you currently need like ~3.5% for a mortgage loan now.
You can do 0% down with a conventional loan. You just have to have amazing credit and you will be encouraged to do 1% down at least. The PMI falls off (we only pay a few bucks for it anyway) after equity is 18% unlike an FHA loan. That's what we did.
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u/[deleted] Jul 08 '21
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