What would you do? (Real Estate Question)

[ChampKind]

Nick, I don't see how 6.75 is modest (I currently have a 5.6)

You are not accounting for "rate bumps" or "pricing hits" that would be assessed to the interest rate because of your particular loan. First off it's a multi-unit property, so you get charged for that.  Secondly your down payment is a pittance, so you'll get charged for that.  Thirdly your co-borrower has bad credit, so you will be hit for that (a 1-2% bump, depending on his score).

So I think the estimate of 6.75% is quite low actually.  I think it would be 8% or higher.

TP4U Thank you for explaining that

8 years in the mortgage business as a loan officer.  Personally, I don't think this loan has a shot in hell, no matter what kind of shenanigan's he tries to pull with his brother.  I know I wouldn't touch it, because it's got fraud written all over it.  And that would put my license and career in jeopardy, not to mention possible criminal charges.  Banks are far to eager to prosecute even for perceived misdeeds these days.

But maybe he'll find a shoot-from-the-hip, risk taker type loan officer to help him massage this through the system.  That's his prerogative.  I have very little doubt where that story would end though - foreclosure proceedings, followed by stiff penalties (probably not jail) when they fully investigated why the loan went bust.

MetroGlobe, why are you so angry?

What happens if the stress due to any of this happening effects your marriage(and if things go bad, it will, believe me)? Is it worth giving her up?

Too far, Nick.  I think that's stepping beyond the realm of helpful advice, linking a potential house deal to divorce.  That's more personal than anything that's come up so far.

Why is this too far? Do you really believe that if things fall apart on his personal finances and it puts his house he lives in in jeopardy that an after effect isn't going to be the relationship he has with his wife?

I think delving into someone's marriage when they ask for financial advice is too much, yes.  You're making a big assumption there about a very touchy subject.  In the end, that's something that is more inflammatory than helpful.

[nickagneta]

It seems to me that when discussing the purchase of a home and discussing personal finances, everything I give him is personal advice. You are also talking about a person who started one of the most famous CB threads ever looking for personal advice with his fiance before he got married. I gave him personal advice then that he thought very valuable. Also, I am not the first, if you go back and read all the posts, that brought up how it could effect him personally in his relationships.

[ChampKind]

It seems to me that when discussing the purchase of a home and discussing personal finances, everything I give him is personal advice. You are also talking about a person who started one of the most famous CB threads ever looking for personal advice with his fiance before he got married. I gave him personal advice then that he thought very valuable. Also, I am not the first, if you go back and read all the posts, that brought up how it could effect him personally in his relationships.

Sent you a PM with my thoughts, didn't mean to hijack the thread. 

[Master Po]

I thought I made my one only post on this subject, but alas I will make one more.

I guess one lesson I have learned in life is that very few people who ask for advice, or ask "what would you do?", really want the answer. Especially if the answer is different from the opinion that they have already formed to their own question. Hence, I shall refrain from giving any more advice in these blog forums - it is indeed a waste of time. In the words of Homer Simpson .....Doh!!!!

Peace from Po

[Gomesfan]

Maybe a No-Doc loan (document) you get a higher interest rate but you get in the house and can refi down the road. Also with only 10k down and not 20% you will have to pay PMI which is mortgage insurance and will be around 200.00 a month, but once you refi and have enough equity to equal 20% you can get rid of PMI.

[the_Bird]

Maybe a No-Doc loan (document) you get a higher interest rate but you get in the house and can refi down the road. Also with only 10k down and not 20% you will have to pay PMI which is mortgage insurance and will be around 200.00 a month, but once you refi and have enough equity to equal 20% you can get rid of PMI.

Ain't nobody writing Alt-A mortgages today, that's the problem.

For better or for worse (I vote "worse"), he almost certainly could have gotten this loan three years ago.  I know plenty of people who got mortgages, no problem, even when they had zero income (unemployed). 

Today, the rules are changed.  180° changed.  You can't sell sub-prime and Alt-A mortgages into the secondary market, nobody's buying them, so the people who make the lending decisions end up being stuck holding them on their own balance sheet.

Tends to make them a little more conservative in their lending standards!

[dark_lord]

as others have said....be patient.  if you rush or force urself into something that you "might" be able to work out....it likely isnt a good move.  wait until ur "sure" it will work.  the market looks like it will suck for a while anyway, so u will likely be fine when ur ready to buy.

[Neurotic Guy]

I thought I made my one only post on this subject, but alas I will make one more.

I guess one lesson I have learned in life is that very few people who ask for advice, or ask "what would you do?", really want the answer. Especially if the answer is different from the opinion that they have already formed to their own question. Hence, I shall refrain from giving any more advice in these blog forums - it is indeed a waste of time. In the words of Homer Simpson .....Doh!!!!

Peace from Po

I understand what you are saying, but I can't agree.  Obviously, sometimes folks who ask for advice are really only looking for a confirmation of their already made decision and therefore will balk at any advice that differs from their original mindset. However, just as often in my experience, folks who seek advice are open to listening -- some might need a little prodding through their initial resistance, but people are often genuine in their desire for help from others.   

So... please don't stop giving advice because you seem to be very good at it.

[JSD]

I thought I made my one only post on this subject, but alas I will make one more.

I guess one lesson I have learned in life is that very few people who ask for advice, or ask "what would you do?", really want the answer. Especially if the answer is different from the opinion that they have already formed to their own question. Hence, I shall refrain from giving any more advice in these blog forums - it is indeed a waste of time. In the words of Homer Simpson .....Doh!!!!

Peace from Po

I'm not sure that's fair. My perception of the market has changed as I am no longer anxiously watching the housing market anticipating a rise anytime soon. I now feel like I have more time. What advice do you feel I've shunned? What kind of interest rate i would get? I thought 6.75% was high and people disagreed, I digressed and said I would post it in this thread the moment it happens. What more can one say?

A couple people said "it's people like you who caused this mess" I say you're just looking to whine about that situation and don't know what your talking about here. In your mind you're like "someone's talking about real estate so now I can whine about AIG even if it doesn't apply!" Sorry pal not here

Mortgage crisis involved toxic adjustable mortgage's given to people who couldn't afford them.  People who impulsively bought and lenders who predatorily sold.  Not here dude.

When one says he or she will dissect the numbers on a fixed rate mortgage to make sure the numbers work before committing to anything  chances are that person is not part of the problem! 


Master Po, this wasn't necessarily directed at you or anyone. I appreciated your feedback. 

[Master Po]

I wish you success in this endeavor...and hope all of the well intended feedback from everyone helped you in some manner

"Patience is the companion to wisdom"

Peace