Bought a house this week.

[smackaholic]

I agree with what you are saying, in general. 29K was probably right at the limit of how much I would borrow. The rate, 3.5%, I think it was, was guaranteed for 3 years, I believe, and I was confident that I could knock it out in that time. And even if I couldn't, a large interest bump on that amount wouldn't be the end of the world. It's all about balancing risk/reward. To me, a considerable rate drop with no fees/underwriter torture was worth it. Now, if you are taking out a variable collateral loan for 29K to buy a vette or a boat, you are a fukking moron.

What were your fees for the refi, other than a raise in blood pressure?

you'll hate me.....$1,000 flat fee
$29k at 3.5% isn't too bad ASSUMING they've got a mandated maximum (on a 3.5% loan, the max they could raise it to would probably be about 8.25%)...thing is that a lot of banks don't put any max on the interest rate.....they are limited by the feds to two increases per year and they can not bump it anymore than half a percent....but I had this friend that got a 15 year HELOC at the "introductory" rate of 2.75%.....by the time he was through paying it off, he was paying over 9% on that loan....if he would have talked to me about it before he did it, I would have told him they were going to fuck him over and take his business elsewhere, but he didn't contact me until about a week after he'd done the deal....too late to back out.....

I asked him "why didn't you talk to me about this because this is what I do" and his response, which still stuns me when I think about it was "I didn't want you to talk me out of it"

I wouldn't try and talk somebody out of anything, I just think it's smart to shop your loan around....like mine....the first place gave me a quote of 3.5%, the second place quoted me 3%, the third place quoted me 2.95%, the fourth place quoted me 2.85% and when I told US Bank about it, they were willing to drop it to the 2.75% rate with closing costs of a flat $1,000.....banks are a lot like pawn shops, if you do it smart they'll play around with their rates.....

1000 bucks for a locked down 2.75% really is pretty damn good. If I had a 90K balance, I would have been all over it. But, knowing that I was very likely do knock it out in a few years, I would have still gone the route I did. And, in my case, it did work out. Today I have zero debt and a 100K open line of credit at the bank if something unforeseen comes up.

[smackaholic]

We went the unconventional route in this loan....by getting approved for second mortgage without the contingency of selling our home. I did a 15 year refi for 3.85% six years ago and was able to knock out an extra mortgage payment each year. Got quite of equity built up in the house and now just need to sell it so I can get out from this stupid PMI on the new home ASAP.

I had to come to the table with 7% down and that pretty much has me cash strapped until my other house sells. Not sure as to what I'll do with all that equity as I only need 45k to meet 20% of equity and eliminate PMI in new home and that'll leave me with another 60K give or take a few thou.

I'd normally just roll all of it into new house, but this is a 3-5 year investment and then we're most likely moving again. We purchased the home for $30k less than the appraised value and the neighborhood only has 6 lots left to develop. Turns out the seller is going through a divorce and is in the fracking business which pretty much means he has little to no income right now. We're thinking the values will appreciate short term when all lots are developed as these houses (247 total) will be the only modern homes available on the golf course (smarthome, radiant barrier, tinted double-pane argon gas windows, energy efficient blah blah blah...) and the community sits south of the main thoroughfare which gets you to downtown Houston and the airport much quicker than all the other neighborhoods on the golf course.

So, you bought a house, using PMI, you have an unsold house sitting empty and you plan on selling the new one in 5 years? You like living on the edge, don't ya?

I understand your logic, I guess. You are taking advantage of a soft market which could pay off well if it turns. What if it doesn't? How long can you eat that other mortgage payment, in this soft market before you are forced to enter the landlord game?

[BSmack]

My stepbrother had to carry two houses for a few years. Not his best decision ever.

[Felix]

We went the unconventional route in this loan....by getting approved for second mortgage without the contingency of selling our home. I did a 15 year refi for 3.85% six years ago and was able to knock out an extra mortgage payment each year. Got quite of equity built up in the house and now just need to sell it so I can get out from this stupid PMI on the new home ASAP.

have you thought about renting the old house out? or possibly contacting an investor that buys properties out in order to lease them?
there are a lot of those guys running around out there.....granted, if you sell it you're not going to get top dollar for it, because they don't get the benefit an owner/user does, which is use of the property....I've said all along I think SFR are a bad investment, but there are people who can make it work....the only problem is that if a tenant walks out, you've got no income to the property and you're back to making two mortgage payments....if you want a rental, I would look at a duplex but preferably a triplex so that if somebody does move out, you can take the hit much better....

don't know what your payments on the first house are, but if you could rent it at a reasonable rate* you could continue to build equity in the property while having someone play your mortgage off for you

*reasonable rate is a relative term...you'd want enough monthly rent to cover the mortgage, taxes, and interest....so if you had a $60,000 left on a 15 year mortgage with 10 years left to pay it off with a 3.85% loan, the principal and interest payment would be about $605/mo. figure $100/mo for taxes and insurance, so your break even monthly rate would be about $705....pay yourself or a management company 7% so your looking at $45/mo. set aside 3% to 6% in a sinking fund factor for replacement of appliances, carpet, etc and you'd throw another $25 to $50/mo at it....so bottom line is you'd have to rent the house for $775-$800 which provides no rate of return, but pays your mortgage down, so that's your return on investment

so if you think you could rent it out for $800 I'd go for it....set up some kind of deal with the tenants so they have first right of refusal when you go to sell the place so they have a vested interest in it and they'll take care of it....the tenants are always the big concern, you'd have to screen them and make sure you're not renting to a bunch of college kids that will trash the house out....lots of times large companies are looking for short term rental properties to bring in executives for a 6 to 12 month period, and those people are solid gold.....check out your home owners association (HOA) restrictions as some will not allow occupation by anyone but the owner (it's been fought in court and the court has always sided with the HOA's).....as far as the PMI insurance goes, pretty tough to get around that especially in light of the recent housing bust....banks and mortgage companies are just trying to cover themselves, so until you can get 40% equity in your new place you'll be saddled with the PMI payment...it aint cheap neither.....probably $80 to $100 bucks a month

[Screw_Michigan]

So, you bought a house, using PMI, you have an unsold house sitting empty and you plan on selling the new one in 5 years? You like living on the edge, don't ya?

I understand your logic, I guess. You are taking advantage of a soft market which could pay off well if it turns. What if it doesn't? How long can you eat that other mortgage payment, in this soft market before you are forced to enter the landlord game?

Who gives a shit? At least he has his own W/D, right?

Anyone who buys a house planning to flip it in 3-5 years is a fucking idiot.

[smackaholic]

I will tell you the definition of a fucking idiot. Someone who has a house built, then moves a year later.

Been there, got the T-shirt. Nearly 20 years ago when I lived in TN. We didn't know we'd be moving back to Ct so soon, but knew it was a distinct possibility. That cost me a shit ton of labor and at least 25K. Fortunately, the house we moved back to in Ct had close to that in equity when we sold it a year later. Yeah, won't be doing that again any time soon. Do you know how much coke and hookers 25K can buy?

[Screw_Michigan]

What about building a house on the other side of the country from where you are living? GF's bro is building a house in Norfolk...while he's still living in Monterrey. I don't think he's been to Norfolk, he's just getting transferred there. Picked a lot and builder based on recommendations, and wah-la! He's building a house. This dude's future has disaster written all over it as most of his shitty decision making is driven by his materialistic wife, who loves the finer things in life and settles for nothing less. No doubt the whole decision to build a house in a place he's never lived is driven by his wife.

[smackaholic]

What about building a house on the other side of the country from where you are living? GF's bro is building a house in Norfolk...while he's still living in Monterrey. I don't think he's been to Norfolk, he's just getting transferred there. Picked a lot and builder based on recommendations, and wah-la! He's building a house. This dude's future has disaster written all over it as most of his shitty decision making is driven by his materialistic wife, who loves the finer things in life and settles for nothing less. No doubt the whole decision to build a house in a place he's never lived is driven by his wife.

I assume he is a Naval Officer going to a school in Monterrey. I also assume he is a "lifer" (going to make a career out of it).

Given this, if he wants to "settle down" somewhere and not have to worry about being transferred to a different area, buying a place in nofuck actually makes sense. He could do a 30 year career and never have to worry about moving.

[Screw_Michigan]

Yes, heaven forbid actually living in an area for a year to feel out the area before deciding where and when to build your place. He can't even swing by the lot to see how the build is going.

[Go Coogs']

So, you bought a house, using PMI, you have an unsold house sitting empty and you plan on selling the new one in 5 years? You like living on the edge, don't ya?

I understand your logic, I guess. You are taking advantage of a soft market which could pay off well if it turns. What if it doesn't? How long can you eat that other mortgage payment, in this soft market before you are forced to enter the landlord game?

Heh...We've had 10 showings in 12 days. Open House today and one next Saturday. The house won't be on the market long. I'll be surprised if it makes it to June. Houston is the fastest growing city in the Sunbelt right now, so I'm too worried about it.


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[Go Coogs']

.....as far as the PMI insurance goes, pretty tough to get around that especially in light of the recent housing bust....banks and mortgage companies are just trying to cover themselves, so until you can get 40% equity in your new place you'll be saddled with the PMI payment...it aint cheap neither.....probably $80 to $100 bucks a month

40%?? Where do you get your info from? When I signed closing docs, it was clearly stated PMI can come off with a written request once I reach 20% with a good payment history. If I chose not to write request for removal, then it automatically comes off at 22%. My PMI is $136 so it behooves me to get remaining 13% paid off as soon as my equity check from other home hits the bank account.


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[Go Coogs']

Anyone who buys a house planning to flip it in 3-5 years is a fucking idiot.

Depends on supply and demand, market conditions, and the area. Huge business park is in development up here and a Grand Parkway just opened up 5 miles north of us giving us a straight shot to The Woodlands (best community in Houston area) in 20 minutes.

Yeah, I like my chances of selling this home for $35k-$50k more than what I paid for it in a few years. I guess you'll still be digging for change between your couch cushions just so you can put on a load of whites.






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[smackaholic]

So, you bought a house, using PMI, you have an unsold house sitting empty and you plan on selling the new one in 5 years? You like living on the edge, don't ya?

I understand your logic, I guess. You are taking advantage of a soft market which could pay off well if it turns. What if it doesn't? How long can you eat that other mortgage payment, in this soft market before you are forced to enter the landlord game?

Heh...We've had 10 showings in 12 days. Open House today and one next Saturday. The house won't be on the market long. I'll be surprised if it makes it to June. Houston is the fastest growing city in the Sunbelt right now, so I'm too worried about it.


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So, it's a hot market, yet you were able to get a smoking deal on the new place? That doesn't make much sense. Anyhoo, good luck with it. As for trying to predict the housing market in Houston or any place else for that matter over the next 5 years, good luck with that.

[mvscal]

Great thread...really.

[smackaholic]

^^^^Renter

[Left Seater]

Sugar Land is the best market in Houston but that is splitting hairs as The Woodlands is a close second.

I bet Coogs makes a decent amount of coin even if he were to sell the new house next year. The whole Texas housing market is just rock steady. No bubble to burst as homes were never over valued like on both coasts.

As for variable rate loans I have used them multiple times before. Banks count on you not being able to stick to your means. This is something you can use against them, which I have done multiple times. Just pay it off before the variable part kicks in.

[smackaholic]

What ^^^^ said. HELOCs are great, used correctly. You just need to make damn sure you can eject from one in short order if need be.

[Go Coogs']

So, it's a hot market, yet you were able to get a smoking deal on the new place? That doesn't make much sense. Anyhoo, good luck with it. As for trying to predict the housing market in Houston or any place else for that matter over the next 5 years, good luck with that.

[/quote]

Like I said, the seller is going through a nasty divorce and is in the fracking business. Yes, you're right about it not making much sense that he couldn't move it as soon as it went on the market, but why buy a two year old house with options already chosen for you when you can build your own custom pad in the same subdivision with your taste and décor? His timing was bad. I'm sure if held off and listed it on the market by the end of next year when the subdivision is fully developed, then he'd sell it pretty quick.

[Wolfman]

When I took out the mortgage for this place in 2001, I owned my house in Cortland NY. I was trying to keep both of them. but needed my younger son to stay in the house back north so it would be "looked after" over the winter. He did not want to live, even rent free and more having to commute to Ithaca (20 miles or more). So I sold that place. I make my final payment on the fall out shelter here in October. Life is good. So is equity.

[Felix]

40%?? Where do you get your info from? When I signed closing docs, it was clearly stated PMI can come off with a written request once I reach 20% with a good payment history. If I chose not to write request for removal, then it automatically comes off at 22%. My PMI is $136 so it behooves me to get remaining 13% paid off as soon as my equity check from other home hits the bank account.

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sorry I meant 20%
but if the Houston market is as hot as you say it is, all the more reason for you to rent it out....obviously you can take the hit (monetarily) if somebody moves out, so that's another justification for renting your home out....just saying

[Felix]

So, it's a hot market, yet you were able to get a smoking deal on the new place? That doesn't make much sense. Anyhoo, good luck with it. As for trying to predict the housing market in Houston or any place else for that matter over the next 5 years, good luck with that.

Like I said, the seller is going through a nasty divorce and is in the fracking business. Yes, you're right about it not making much sense that he couldn't move it as soon as it went on the market, but why buy a two year old house with options already chosen for you when you can build your own custom pad in the same subdivision with your taste and décor? His timing was bad. I'm sure if held off and listed it on the market by the end of next year when the subdivision is fully developed, then he'd sell it pretty quick.

remember that your tastes aren't necessarily other peoples taste...I'm always amused at rich fucks that decide to build a custom home to their liking and then something goes bad and they have to sell it.....they can never understand why they take a massive hit on the sale price......
remember, cost and value in real estate are not the same thing.....like out here, it would cost you $25,000 to put in an inground pool, but when it came time to sell the place, people around here would give you jack squat for it....it would be a feature, but you'd never recoup your $25k outlay

[R-Jack]

Also, is every tv mounted twenty feet high in the house? Binge watching on Nextlix looks like it will end with a neck brace.

[smackaholic]

The tv in that pic looks to be about 5-6 ft off the floor, unless that fireplace is 12 ft high. Only one getting a sore neck would be MS.


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[Left Seater]

That TV is inside? Huh, I thought it was outside on the back porch given the table and chairs. Outdoor kitchens and living spaces are all over the place here since you can use them for most of the year (minus Jan, July and August.)

[Goober McTuber]

So, it's a hot market, yet you were able to get a smoking deal on the new place? That doesn't make much sense. Anyhoo, good luck with it. As for trying to predict the housing market in Houston or any place else for that matter over the next 5 years, good luck with that.

Like I said, the seller is going through a nasty divorce and is in the fracking business. Yes, you're right about it not making much sense that he couldn't move it as soon as it went on the market, but why buy a two year old house with options already chosen for you when you can build your own custom pad in the same subdivision with your taste and décor? His timing was bad. I'm sure if held off and listed it on the market by the end of next year when the subdivision is fully developed, then he'd sell it pretty quick.

remember that your tastes aren't necessarily other peoples taste...

Yeah, we've seen photos of both of their wives. Pretty sure they understand that thingy about different tastes.

[R-Jack]

The tv in that pic looks to be about 5-6 ft off the floor, unless that fireplace is 12 ft high. Only one getting a sore neck would be MS.


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Looks like a pretty extreme tilt. Either way, the audio/video geeks of the world almost all hate mounting tv's above fireplaces. Not only because of the neck kinks (which probably has more to do with their own pencil necks.....nerds), but because the best viewing is straight on eye level, so whatever height that is when you are viewing, which is mostly sitting. I just figger if you're going to spend the money on HD shit, [charlie sheen]might as well mount it to get what you pay for.[/Charlie sheen]

[Goober McTuber]

If he mounted it at eye level, it would probably melt. Duh.

[Go Coogs']

That TV is inside? Huh, I thought it was outside on the back porch given the table and chairs. Outdoor kitchens and living spaces are all over the place here since you can use them for most of the year (minus Jan, July and August.)

Tv is outside.



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[Felix]

remember that your tastes aren't necessarily other peoples taste...I'm always amused at rich fucks that decide to build a custom home to their liking and then something goes bad and they have to sell it.....they can never understand why they take a massive hit on the sale price......

here's a perfect example of what I'm talking about



this house is located within one of the nicer subdivisions around here.....the place is situated on a 1 acre lot with private lake.....the guy paid $975,000 for the lot, then dumped $1,650,000 into construction.....when his wife and he got divorced, he ended up selling the place for $1,200,000
somebody got themselves a hell of a deal because I've been in that house and it was really nice

that's a nice looking place Coogs....well done

[Go Coogs']

The tv in that pic looks to be about 5-6 ft off the floor, unless that fireplace is 12 ft high. Only one getting a sore neck would be MS.


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Looks like a pretty extreme tilt. Either way, the audio/video geeks of the world almost all hate mounting tv's above fireplaces. Not only because of the neck kinks (which probably has more to do with their own pencil necks.....nerds), but because the best viewing is straight on eye level, so whatever height that is when you are viewing, which is mostly sitting. I just figger if you're going to spend the money on HD shit, [charlie sheen]might as well mount it to get what you pay for.[/Charlie sheen]

I didn't mount it. The seller sold us dining room furniture, patio furniture, outside tv, breakfast table and chairs, front porch rocking chairs, mirror, and a bunch of huge Spanish potted plants for $500.

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[R-Jack]

.the guy paid $975,000 for the lot, then dumped $1,650,000 into construction.....when his wife and he got divorced, he ended up selling the place for $1,200,000

You really need to ask a lot of questions when you are about to build a custom home. The first question should always be "did I marry a cunt?"

[smackaholic]

The TV angle didn't seem bad, at least from where that first pic was shot, but just looking at that second pic made my neck sore.

[Left Seater]

Nice job Coogs. Looking back I assumed based on the comments that it was inside, but should have stayed with my initial thought.

I know some have said you should rent the old place but here is a vote against that. Sell it and take your equity and gains and move on.

[smackaholic]

I know some have said you should rent the old place but here is a vote against that. Sell it and take your equity and gains and move on.

I've had a pretty good experience renting our previous house.
I'm generating positive cash flow and the note is paid off in 2 more years

We're actually starting to look at some additional houses for investment properties now

I did 3 years as a long distance landlord on my first house. First tenant was a fukking nightmare. Poor fukker had a new reason every month why the rent would be late. We had a contract on the house and got that deadbeat out after agreeing to give him back his full deposit and a portion of a month free. I didn't care, just wanted him gone. The buyer pulled out, day of the closing. Next tenant I had 2 years. A young couple, no kids. Perfect tenant. Dude left the house better than he found it.

I think a good rule of thumb is that if you are gonna play the landlord game on a single family home, fine, so long as it is a decent enough place to get a high enough rent to hopefully filter out the riffraff. Can you have riffraff in higher income brackets? Sure, but the odds are much better.

Sounds like Scrote has done well with his and is about 2 years from doing really, really well. Gotta love the idea of collecting rent on a place without a monthly mortgage payment! Yeah, there's taxes, insurance, upkeep, but seeing as he is not in the U&R or left coast, his taxes are likely reasonable. Wish I had gotten into that game a while ago. Was visiting mom in Ft Meyers right after the real estate crash there in 08. You could buy decent 2-3 bedroom homes/condos for damn near nothing. I thought to myself, buy a few, have mom live in one, get 15 year notes on them and try to pay them down even quicker. If I had done that, I would likely be sitting on a few paid off properties by now. Fukk me!

[Left Seater]

Props to those who have done well in the rental game. Being a landlord just does not seem fun or a good investment to me.

[smackaholic]

Props to those who have done well in the rental game. Being a landlord just does not seem fun or a good investment to me.

It certainly is not for all. It helps if you are handy. It also helps if you are a black hearted bastard who doesn't care that your rent money was spent on a doctor's visit for your 3 year old (a favorite of my first tenant).

But, all in all, I think that putting your nest egg into rental properties beats the 401K casino if you are up to the challenges of it.

[BSmack]

Props to those who have done well in the rental game. Being a landlord just does not seem fun or a good investment to me.

It certainly is not for all. It helps if you are handy.

[smackaholic]

I think it is worth doing, especially with today's ridiculously low mortgage rates. How much of a premium are they charging nowadays for income property mortgages?


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[Go Coogs']

Unfortunately, Mrs.Rumps and I just don't have the time to play landlord. She was just promoted to manager of her bar and is scheduled to work 6 out of 7 for the next six weeks. Meanwhile, I have two small turnarounds coming up which entails a 21/22 day stretch and a 20/22 day stretch over the next three months. I don't see how anyone can be a landlord and work that much.

We already have four interested parties to purchase our home. I'm hoping it turns into a bidding war.

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[smackaholic]

A single family place that isn't a POS shouldn't take up much of your time, assuming you have a decent tenant.