Infectious Off-Road.com

Perhaps I'm jumping the gun a little bit early on this, but I want to be prepared when the time comes. I'm trying to get a feel for what type of financing options are really going to work for me. I'd like to get a house between 100-150K. I'm wanting to do a 15 year loan, but I have a little less than 15% saved for the occasion. Should I continue my saving spree and just wait? I'm just becoming increasingly worried over what the market will do after the election.

Rates are down again. If you only have 15% you wont end up with a conventional loan. You can still get some great deals and very affordable but you will have PMI initially.

Everything paid over and above a regular payment goes towards principle right? So I could potentially pay my way out of PMI within a year?

Yes you can, you just have to request that they re-look at it in order to remove it. The value of the home also has to maintain during that time as well. Are you (or a parent) a union member or military/veteran? If so there are other fee reductions....

If you continue to save for a little while longer and get to 20% or more and have decent credit, you can usually avoid PMI. 20% is generally the cut-off point with most lending institutions.

The problem with doing that right now, is that interest rates and home prices have bottomed and you will not see a buyers market like this in the next 50 years. The fed is going to have to raise rates to hedge against run-away inflation soon, as Bernanke just made the call to start the printing presses at the treasury again (so there will definitely be inflation to hedge). So, it depends on how long it will take you to save an extra $6-8K; if you can do it in the next six months, I say wait and avoid PMI.

Also, in this market, there are many advantages to a 30 year fixed vs a 15 year. But this depends on your realistic expectations of how long you will live in the home. Trust me, with a smart guy like you, you may be looking to upgrade (or may start a family) in the next few years, and may regret dumping the extra principal into the home if you are just going to sell it in 7 years. For a 100K house, you are going to get sick of the neighborhood really fast - trust me on this. I bought my current home for 275K, and the owner before me bought it for $800K; and you can get an even better deal right now in this market than I did. So my point is, why settle for a smaller house with a 15yr loan, when you can get a better house in a better neighborhood with a 30yr. Besides, you can always make extra payments on a 30yr loan and pay it off in 15 years, but also have the flexibility of going back to the low 30yr payment if money gets tight.

I bought Gold as my hedge against inflation, but you have the opportunity to buy property to do the same right now.

[quote="Desert Dog"]
The problem with doing that right now, is that interest rates and home prices have bottomed and you will not see a buyers market like this in the next 50 years. The fed is going to have to raise rates to hedge against run-away inflation soon, as Bernanke just made the call to start the printing presses at the treasury again (so there will definitely be inflation to hedge). So, it depends on how long it will take you to save an extra $6-8K; if you can do it in the next six months, I say wait and avoid PMI.
[/quote]

I know that I don't have a whole lot of time before the inflation starts to take effect in the market which is why I'm pursuing this a bit early. I may hold out till December. By then I'll have pretty close to the 20%, but not much else left in the bank besides that. I'm tire kickin' over a couple houses on the market right now because of the neighborhoods that they're in, but maybe something more desirable will come along (perhaps one with a shop).

Any recommendations for a realtor?

[quote="REDxj5150"]Any recommendations for a realtor?[/quote]


My friend Ernie is a awesome realtor ...

6612047363

Robert dobbs with 661 Realty. He hustled his ass off for me. Packaged and submitted 30 offers in me in less than a month. I had my real-estate license in 07 and this guy i's what you'd want in an agent. His number is. 661-900-1918. You won't be disappointed

I would say it depends on who you want your lender to be. Most of the banks have preferred partners that they work with. So if you are going traditional financing and shopping with a pre qual you may want to speak to your lender first. I have a great loan officer at my office and I know she works directly with some realtors.

TRUST ME ON THIS TRAVIS.....stay away from short sales right now. You will spin your wheels and get nowhere. A GOOD agent will know this already and don't waste your time.

Good real estate agents were impossible to find 7 years ago because evryone in Kern County had a real estate license. Basically, the housing crash thinned the herd and only the ones that are really good at what they do survived. So there are some good ones out there. The exception of course, is Keller Williams - stay away from them. Their good affiliated agents jumped that sinking ship in the past couple years.

I don't understand why it is so hard to buy a short sale home, but I'll stay away.