Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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Plenty of folks bought homes at market value in 1996 / 1997 when the going rate was 8% for a 30 year mortgage and the value dropped so much the last 5 years that if they wanted to refi now they would...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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Depends on the market.
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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Yup. Like 50% of the houses you look at are foreclosures, with a lot more foreclosures inventory still waiting to hit the market.
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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that's the catch - what you gain in value loss can be offset by increased interest very quickly. You'd also have to add in costs for refinancing.
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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I know Zillow isn't accurate, but they have useful information about past sales and such and that's why I mentioned using zillow since it's accessible for everyone. Let's look at las vegas
Take...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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The best example you can find for your argument is a home that sold at auction for $27K less than what the purchase price was 15 years earlier? and then sold again for.... $5K more than the purchase...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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I didn't realize it was find the best example that skews the argument. That's a basic example after 3 mins on zillow searching in an area zip code I do not know very well. Since most of vegas homes i...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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I know exactly what you are saying. My original statement is still true.
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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No. When the only comps an appraisor has is foreclosures it is not unusual that the value will come in lower than the purchase price 14 years earlier.
Also, 14 years ago (and earlier), the...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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False. Given that your monthly housing payment will stay the same. At a lower interest rate the home you are buying will be more expensive. In this case should market conditions change against you,...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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should be very easy to estimate; variables are the purchase price (e.g. loan amt, assume 20% down to simplify things) and "future" rate. You should be able to run a bunch of scenarios where you vary...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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This is true, but it is also not linear. You have to define how affordability is linked to interest rates and offer an equation for it over time. And to make things more complicated, home...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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Why not?
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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The folly there is not the refi itself, but in reassuming another 30 year loan. You're not comparing apples to apples. However, since you can't take out arbitrary loan terms (25 years in this...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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I agree, but most people dont think in those terms.
Actually in my opinion it would be even better to refi to a 15 year and raise your monthly payments and lower the overall price you pay over the...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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Since home affordability is directly linked to interest rates...
And you can change the rate (refinance to a lower rate) but not the purchase price of the home....
Isn't it better to buy when...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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No, its better to buy when prices and interest rates are low, like right now.
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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The only loss I see is in the refinancing cost. Otherwise the carrying cost of the loan is the same because that is what I base the purchase around
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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http://www.gifsforum.com/images/image/not%20sure%20if%20serious/preview/not%20sure%20if%20serious.jpg
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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http://www.zillow.com/homedetails/330-Las-Brisas-St-Merced-CA-95341/19194900_zpid/
Paid $82500 in 1998. If they had an 8% mortgage and made all of their payments the balance now would be $67000. ...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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This would effectively narrow down the cost difference in the loans to the two rates, not terms.
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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I understand how the value could be lower than what the home was priced at in 96/97 due to foreclosures but do you understand that the principal was paid down since 96/97?
Even if the value of the...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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OK that example works to support your argument but can you explain why that house was sold for so much less in 2005 when the market was hot? Was it a meth lab or something all the way out in Merced?...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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Vegas:
http://www.zillow.com/homedetails/9005-Square-Knot-Ave-Las-Vegas-NV-89143/6889479_zpid/#{scid=hdp-site-map-bubble-address}
San Jose:
...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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Have you looked at the home prices in that san jose condo neighborhood? They currently go for $280K+ - $345K Look at the prices on 308 Hans Way.
07/12/2007 Sold $198,000 247% $141 Public Record
...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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I thought of this back a few years ago during the boom yr but I could not find the right answer. If the rates go up, the prices will come down but if the rates go down, the prices could go up in a...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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Dont forget some people who reup their 30 year mortgage even though they have paid into it for 5 years or so.
"Wow I sure am saving a lot monthly on this!"
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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I just ran a scenario.
House Price: $700K
20% Down
Interest 4.75%
Total over 30 years with Property Taxes Came to be $1.335M
Second Scenario:
House Price 15% less than above
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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I work with true appraisal values every day. We aren't even on the same page if you think Zillow values mean anything. I'll still answer your question.......Las vegas, San Jose, Orlando, etc. etc.
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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The drop in value of the past 5 yrs took away the appreciation from 2002-2006. Show me which city you are referring to and if you can find me a home on zillow whose value has dropped below 97 level...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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less people buy houses when interest rates are high,but now is not the time to buya house
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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How long will the interest rates be 8-10%? Just model out your assumptions in excel. That will give you an answer.
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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Assuming that the home's price drops to cancel out the extra interest.
It's not necessarily the case. You make the assumption that the decline in value will make up for the amount in interest...
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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Surely. I guess everything is at the mercy of the bond market right now.
Better to buy a home when rates are high?
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Thread created 10-03-2011 by Alpha13
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Then find me an example of such a house and let me look at the numbers. It shouldn't be hard right?
