I am not trying to take your situation and make it out like you are in trouble.
But if making $90k and paying 25% off the top of that you might want to talk to an accountant first. People in the $150k pay 28%.
Secondly 6.5% interest on non-jumbo right now is for someone whose credit is below 700s. Typical rates right now are 5.75 for 30 year fixed and you can always buy a it down to make it affordable.
Actually I was the one saying that prices could fall 80%, and I was serious. I have been saying that the nation is on a financial precipice. We could have soup lines and Hoovervilles in a few years, except they'd be Bushvilles of course.
Oh Markor, you perpetual bull. By the time this is said and done people are going to be wishing they still had soup lines and Bushvilles. I can see myself now, explaining it to whatever progeny I have at the time.
Me: "...and in time we came to look fondly upon the soup lines and bushvilles."
Kid: "How's that?"
Me: "A bushville with it's ramshackled plywood shelters with cardboard doors looks downright inviting when you're huddling under a bushblanket (newspaper) to keep warm and sleeping on a bushbed (gravel scatter about on cement). And while you're waiting in line for three hot pine cones to eat, long for the days of standing in the old soup lines."
If you are making $85k a year, and having a real problem with paying $25,000 in a mortgage payment a year, then you have bigger problems ahead of you.
Further more, there are a lot of homes right now in the 1700 square foot range brand new in Lynnwood that builders are dying to get rid of for low $300's. All you need to do is look.
I am not trying to take your situation and make it out like you are in trouble.
But if making $90k and paying 25% off the top of that you might want to talk to an accountant first. People in the $150k pay 28%.
Secondly 6.5% interest on non-jumbo right now is for someone whose credit is below 700s. Typical rates right now are 5.75 for 30 year fixed and you can always buy a it down to make it affordable.
I'm confused.
Are you selling new construction in Lynnwood, mortgages or both?
I am not selling anything. Pointing out to the frustration of the topic starter, is that it is not that sour out there, loan shopping, and house shopping is becoming a normal process that it used to be.
I don't think most people have gotten their heads wrapped around the fact that it is actually normal for there to be periodic MASSIVE price declines in real-estate.
Good point. I hope you're right about Bellevue, at least until I buy.
Me: "...and in time we came to look fondly upon the soup lines and bushvilles."
Kid: "How's that?"
Me: "A bushville with it's ramshackled plywood shelters with cardboard doors looks downright inviting when you're huddling under a bushblanket (newspaper) to keep warm and sleeping on a bushbed (gravel scatter about on cement). And while you're waiting in line for three hot pine cones to eat, long for the days of standing in the old soup lines."
Funny! Of course half the country will call them Obamavilles, or Clintonvilles (as in Bill, not Hillary).
Pencil it out. Take a $90k/yr income, subtract taxes at ~25%, netting ~$5600/mo. A simple PITI calculation on $280k, 30yr, 6.5% fixed, $2800 taxes, and $600 insurance yields ~$2050/mo in mortgage payments. That is ~36.5% of our income, above the typical figure considered affordable.
I'm renting a house in Bellevue that would easily sell for $400K, for over $300 less per month than that. On the house you buy you'd also have ~$200/mo maintenance costs, plus deferred excise taxes and selling costs etc. You'd get a tax deduction on the interest, but it would still be more per month to buy that $280K house, that's in a far worse location (assuming you don't work in the boonies), and most importantly in a falling (or at least not selling) housing market.
As an extreme example, if rent on the house you want was only $100/mo, you'd be happy giving up the pleasures of owning, right? I know I would, I'd be taking more vacations and retire decades earlier. So maybe what's best while waiting for prices to fall is to appreciate the great rental deals that can had, relative to buying. The glass half full thing.
Hopefully things will calm down significantly in the next few years as I rent. If not I will be "voting with my feet" to another more affordable location. Probably to one of those nice mountain states with lots of sun....:)
If you could get your same income in a lot cheaper place, you may well be better off moving.
Whatever you do, DON'T DRIVE UNTIL YOU CAN AFFORD. That has to be the worst possible thing that could be done in our declining market. Not only will you spend your precious hours stuck in traffic, you will also find that our outlying areas will simply not hold their value as well. How can you expect this correction to happen so fast? It took five years to get us into this mess, it may take long to fully unwind (and I believe it will.)
As far as historic Seattle affordability is concerned, I purchased in '98, in Ballard. At that time my monthly payments were pretty much what it would have cost to rent the same place. 2002 was when it really started getting out of whack.
Whatever you do, DON'T DRIVE UNTIL YOU CAN AFFORD.
I agree. I bought 10+ years ago in the exurbs. It made sense because I was working in the vicinity too, and further out bought a bigger house. Plus it was really nice out there. But in the long run it was a mistake, or at least I changed my mind about it. As nice as the area was, I grew to hate having to drive some miles to get to the nearest services. And houses closer in appreciated probably 1% more annually on average.
Outlying areas are definately still in such a struggle that it makes no sense to buy there.
Lake Stevens, Marysville by just new home prices are off by 30%.
Comments
Unless you consider your house to be your retirement.
But if that is the case you better have a bigger down payment and a 10 year mortgage so that interest doesn't eat up everything you would be saving.
But if making $90k and paying 25% off the top of that you might want to talk to an accountant first. People in the $150k pay 28%.
Secondly 6.5% interest on non-jumbo right now is for someone whose credit is below 700s. Typical rates right now are 5.75 for 30 year fixed and you can always buy a it down to make it affordable.
And Bear Sterns?
Oh Markor, you perpetual bull. By the time this is said and done people are going to be wishing they still had soup lines and Bushvilles. I can see myself now, explaining it to whatever progeny I have at the time.
Me: "...and in time we came to look fondly upon the soup lines and bushvilles."
Kid: "How's that?"
Me: "A bushville with it's ramshackled plywood shelters with cardboard doors looks downright inviting when you're huddling under a bushblanket (newspaper) to keep warm and sleeping on a bushbed (gravel scatter about on cement). And while you're waiting in line for three hot pine cones to eat, long for the days of standing in the old soup lines."
Actually, I imagine it being all together like this Monty Python sketch.
I'm confused.
Are you selling new construction in Lynnwood, mortgages or both?
I am not selling anything. Pointing out to the frustration of the topic starter, is that it is not that sour out there, loan shopping, and house shopping is becoming a normal process that it used to be.
Forgot about that one!
As an extreme example, if rent on the house you want was only $100/mo, you'd be happy giving up the pleasures of owning, right? I know I would, I'd be taking more vacations and retire decades earlier. So maybe what's best while waiting for prices to fall is to appreciate the great rental deals that can had, relative to buying. The glass half full thing.
If you could get your same income in a lot cheaper place, you may well be better off moving.
The landlord is calling next month rent went up $200 a month
Whatever you do, DON'T DRIVE UNTIL YOU CAN AFFORD. That has to be the worst possible thing that could be done in our declining market. Not only will you spend your precious hours stuck in traffic, you will also find that our outlying areas will simply not hold their value as well. How can you expect this correction to happen so fast? It took five years to get us into this mess, it may take long to fully unwind (and I believe it will.)
As far as historic Seattle affordability is concerned, I purchased in '98, in Ballard. At that time my monthly payments were pretty much what it would have cost to rent the same place. 2002 was when it really started getting out of whack.
Lake Stevens, Marysville by just new home prices are off by 30%.