peilthetraveler, Quote: or the RN and soon to be doctor living in the 115k home http://money.cnn.com/galleries/2009...mebuyers/4.html P, just to be clear, a post doctoral fellow is not a soon to be medical doctor. They are someone who just got their PhD who are doing more research for a school before trying to get a real teaching or research position and to bolster their resume to do so. My brother is one. This article is just another example of no matter how much things change or appear to change, they really don't change. I hope they do a follow up article with these people 5 years from now. But as an optimist, I will give them the benefit of the doubt that they had family help with the down payment or something. Otherwise they are setting themselves up for failure without even knowing it (unfortunately). Who says trading is the only area where no one can protect you from yourself? What about the http://money.cnn.com/galleries/2009/real_estate/0908/gallery.first_time_homebuyers/6.html (Mr. Bauer, 26) who bought an adjustable rate mortgage who says "The rate goes to 4.5% the second year and caps after that at 5.5%, about $1,900 monthly, which we should be able to swing as our earnings go up." I should be able to swing it? More evidence nothing has been learned in the housing market. Good trading BM
Alex was the most shocking one to me.... "When buying, the biggest problem I had was how to come up with a down payment. The house was $257,000, and I needed to put down 3.5% to meet the FHA rules. I didn't have all of the $9,000 required, but then I found out about the FHA's new program where you can use the tax credit for the down payment. Using the plan, which the FHA announced in May, I was able to buy the house without draining all our savings. I got a great deal on the mortgage. The interest rate is just 3.5% for the first year and costs about $1,500 a month, with taxes and insurance. The rate goes to 4.5% the second year and caps after that at 5.5%, about $1,900 monthly, which we should be able to swing as our earnings go up." They couldnt put down a measly 3.5%?!?!?! "after that at 5.5%, about $1,900 monthly, which we should be able to swing as our earnings go up." SHOULD be able to swing? so they can't afford the down payment or the monthly payments, but they thought it was a great idea to buy it? they used the 8k, towards they 3.5% downpayment. The market could be down 2-3% in a month and they are already underwater. F us all.
they might make money. the real estate market is hot in california. here is a million dollar home that sold for 23% over asking price. http://www.youtube.com/watch?v=iTvW_kfV3yo&feature=sub
i used mine to go to jamaica for a week with my fiance. Still have over half for emergencies and house fixing.
Max FHA loan limit in California is $729,750 per https://entp.hud.gov/idapp/html/hicost1.cfm. That is for single family, they had to put some kind of money down. You can get an FHA loan on an FHA ready home for any amount as long as you put enough down to get it under the loan cap. Which doesn't make too much sense considering that you can't get out of mortgage insurance even with the LTV under 80% Thanks for the link, interesting read the couple got roasted in the comments section. To each his own I suppose, certainly not the most prudent decision looking at the surface but who knows, maybe they have extremely wealthy familes?
And when there are no more wealthy families to bleed, then everyone will have nothing.... but at least we'll all be the same and Obama will be pleased.
Plus when one of them loses their job and the payment jumps up to nearly 2 grand, they'll post a video on youtube about how the mortgage company screwed them by claiming they could afford this.