patrick.net

HappyGilmore says

anon_85c53 says

Plus they're stuck with MIP for the life of the loan and many are getting approved at 43% DTI levels.

They're only stuck with it until they build 20% equity.

Pretty sure it's the life of the loan now. Not sure if this site is reputable, but it changed in 2013: https://themortgagereports.com/7570/fha-mip-cancel
Loans prior to that year you can, but it was 78% LTV and minimum of 5 years with the loan. So even if prices skyrocketed, you're stuck with it for 5 years regardless.

anon_85c53 says

Any idea how many new home buyers are going 3.5% FHA for loans? One report says over 35% of new Millennial buyers are going this route. They're underwater the day they move in. Almost 25% of all home buyers are going 3.5% FHA. They have no equity or cushion, even if housing just drops 10%. Plus they're stuck with MIP for the life of the loan and many are getting approved at 43% DTI levels.

The average down payment today is barely 10% across all purchasers. The days of 20% down are long gone.

That's not a healthy market.

There's still MIP on under 20% down loans, but I haven't seen a buyer with an FHA loan in close to 2 years on about 40 sales in Chicagoland. It's a total sellers market in most places and there's no need for a seller to fuck around with an FHA buyer. The primary residence buyers right now are the healthiest financially I've seen. I'm hard pressed to find evidence of a coming decline in my area. Not impossible, but it wouldn't be due to the previous causes of our last housing bubble.

anon_ceed8 says

EconPete says

anon_d1db0 says

I am assuming from your comment you did not buy?

Property taxes are more than my rent, why would I buy. Plus interest from cd's pays the rent.....

Ok then - if that's true then what is your long term plan - rent forever?

It's never the plan but it is the trap many of us fall into. In my case I could have bought in 04 but I thought the prices were "unsustainable" and would come down in "2-3 years". Boy was I wrong...

Suddenly, 2-3 years became a decade and by the end my rent was suffocating. Rather than being continually squeezed to death by rents, I did buy in 2015 but at prices close to what I could have paid a decade earlier.

While I'm happy I bought, in hindsight I really regret not buying a decade earlier when I had the chance. It was short sighted and somewhat ego driven as I told everyone I knew that peninsula prices "would crater" and I didn't want to be proven wrong.

anon_09ed8 says

Wrong, new FHA loans have MIP for the life of the loan, unless they refinance elsewhere.

Who wouldn't refinance after you get to 20%?

HappyGilmore says

anon_09ed8 says

Wrong, new FHA loans have MIP for the life of the loan, unless they refinance elsewhere.

Who wouldn't refinance after you get to 20%?

Ones with crappy credit, living paycheck to paycheck, or don't have money for new closing costs.

anon_10ddb says

Ones with crappy credit, living paycheck to paycheck, or don't have money for new closing costs.

You can roll the closing costs into the loan value or opt for a slightly higher rate. I guess if your credit has taken a turn for the worse since you bought it, but I would think that's a small minority. With inflation and principal paydown, the ratios for most people will look better after a few years.

anon_eba5e says

The rock gym at Basecamp in downntown Reno is dog friendly,

Hoe do you like living in Reno Roberto? Can you describe why move there from Bay Area? And are you planing to come back eventually? Or Reno area is fantastic and your home forever?

anon_0128c says

Hoe do you like living in Reno Roberto? Can you describe why move there from Bay Area?

He didn't move there from Bay Area.

Satoshi_Nakamoto says

anon_0128c says

Hoe do you like living in Reno Roberto? Can you describe why move there from Bay Area?

He didn't move there from Bay Area.

I also believe he said he was moving to the Vegas area. Does this Anon not have the ability to read?

HappyGilmore says

You can roll the closing costs into the loan value or opt for a slightly higher rate.

Then what was gained by refinancing and eliminating PMI if you're going to add more costs and a higher rate?

HappyGilmore says

I guess if your credit has taken a turn for the worse since you bought it, but I would think that's a small minority. With inflation and principal paydown, the ratios for most people will look better after a few years.

If you only put down 3.5% originally on the FHA, it's going to take a lot more than a few years to get below 80% LTV.

rando says

Lol, a fair comparison would point out that leverage works both ways. Houses may not go to zero (except in Detroit) but your equity can easily go to zero, and then keep on digging a hole you may never be able to climb out of. Stocks don't do that. If they go to zero, that's the end of the damage. (Unless you buy on margin, generally a bad idea.)

YEs, but the overall expectation in a non-bubble market is that long term return of a house will exceed the cost of the lending. Same reason that short time rates for a savings accounts is less than a long term rate of a loan. Same reason than stock returns beat housing returns. I'd refinance my house to invest in SP500 for 30 years in a heart beat.

anon_e60ba says

Then what was gained by refinancing and eliminating PMI if you're going to add more costs and a higher rate?

It will obviously still be less than PMI

anon_e60ba says

If you only put down 3.5% originally on the FHA, it's going to take a lot more than a few years to get below 80% LTV.

Yep, most likely. But I didn't say that they'd be able to refinance in a few years, but rather that the ratios would look better in a short time. By the time they're ready to refinance, the ratios will probably look much better.