In article <ef6582c0.0310051606.65ed6aa7[at]posting.google.com> ,
<gajaya1[at]netscape.net> wrote:

- quote -

If home values never go down, that is only because you have not
been looking long enough. If you want to know what can happen
to home prices, ask the folks in Flint, Michigan after GM shut
down, or Houston after the oil boom collapsed, or folks from
California when the last real estate bubble burst. Just think
what could happen if 30% of the houses in your area were for
sale, and there were no buyers at all. Human nature doesn't
like to consider this kind of stuff when everything is going well,
which is why it is so much harder on people when it acutally happens.

- quote -

So does nearly everyone. I know that I personally have infinite
wants, and no ammount of money will ever satisfy all of those
wants. The key is to throttle your wants, and only go after the
things that are morally right to obtain. Putting your family's
future and your retirement at risk is not morally correct.

- quote -

One of two ways...(1) they have sufficient income and other resources
to be able to afford it, or (2), they are "house poor". That is
where so much of their income goes to the house payment and upkeep
that they cannot afford to do anything. They drive shitty cars,
have little or no furniture, cannot afford to go anywhere, never
eat out, never go to movies, never entertain, cannot take vacations,
and have to penny pinch every day of every year until the damn
house is paid for.

- quote -

That is something that you should be able to sit down and pencil
out. Consider that appliances last an average of 7 years, carpet
maybe 5 years, roof will last 30 years, furnace/ac unit maybe 15
years. For upkeep, you have trash, insurance, lawn, snow, landscaping,
water, sewage, outdoor paint, etc. Move in costs include turning
on the phone, installing cable TV or a dish, other connection charges,
and putting up window treatments (which can run into the thousands).

- quote -

Every area is different, but that is just a bit high from my
experience. Common items are 1% for mortgage initiation, 1%
for title work, 1/2% closing agent fee, $350 appraisal, $500
worth of other inspections, $500 worth of junk fees, $50 for
credit report. It can go higher if you have to pay interest
fees (close on the last day of the month to avoid that), or
if you have to pay mortgage points. One item that varies
greatly is any taxes or recording fees. I have seen that range
from a few dollars up to 2%.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

I can see that home values never decrease in this particular area and
that is the very reason even 1700 sq ft home is around 275k and the
neighboor hood looks very rough. (Pardon my words but I am not able to
take stress and handle tough neighbours. ) We even looked for 250K
homes 1500sqft and all look far less live-able than this 350k 2750sq
foot brand new house. Similar houses are already in 400K range.

We love to just live in such a house.

My only conecern is leaving to some other city in case of a job loss
or a good job oppertunity comes around otherwise I may stay for long.

I need to know how someone who handles a 280K loan do it right now.

How much his total cost day today and what unexpected things comes
around.


I heared buyer closing cost is always around 6-8%

gajaya1[at]netscape.net, you asked:

<< <i> I am in IT field earning around 73K per annum. My wife will never work
and have a kid. In my area last 5 years houses appreciated 8% average
and we cant find a decent home below 350K range. I am not sure I can
afford this.? </i> >
That depends on what other assets you may have and/or what other resources you
might be able to call upon.

Just because housing has averaged 8% over the last 5 years, not count on that
continuing. You might just do you analysis based on inflationary averages (say
something like . .. 3 - 4%)

<< <i> We have minimal living expenses used to live that way since childhood
and never eat at resturants and can save about 3k a month. Other than
helping relatives in need (spent 20K last 2 years )we do not spend for
ourselves only eat 1$ Mc chiken in the worst case scenarios. I know
this sound crazy but that is what we value most. we have a new car
already paid off. I expect to stay in the house between 3-5 years. I
hope to get a 7 year ARM mortgage and lower my mortgage in this period
and sell off the house when I move. I expect to earn a profit by
selling because it is in the best school area in the county.</i> >
I don't feel 3 year period is really going to be worth it. But 5 years might
work out great. Just keep in mind that there's really no guarantee and the
best of real estate makerts have their down times.

<< <i> Total Mortgage including Tax will come around 2.4K ... I can easily
pay that now but ? What if some thing goes wrong. I expect to sell the
house and move to an apartment. I know selling cost is 8%.
I need your honest openion whether I should go for it or not. I got a
good deal on a house also.</i> >
Selling costs of 8% is really VERY high and I feel that anyone willing to pay
that much to sell a home is being quite extravagant. I'm sure there are many
real estate agents/agencies that can do if for a lot less.

Also, since you only plan to own the home for a short period of time, you do
want to keep your mortgage payments down to a minimum. So you might want to
take a close look at Option ARM's where you have choices as to how you want to
make each monthly payment. One choice of a minimum payment is very low, which
could cut you PITI payment almost in half. However . . .using it also produces
a negative amortization. But for your purposes, it can be a very good option.

If you have a positive net worth along with some other resources, and keep you
expenses to a minimum . . . I don't see any real reason not to proceed. Just
keep in mind that when you buy a home there are always additional expenses such
as making changes to meet your own tastes and then there are those that pop up
unexpectedly.

Personally, I feel buying a <b> home</b> is still a great "investment." But if
one is only going to be there for 3 years and/or has a very mobile life style,
buying does not seem like such a good idea.

It is not advisable to base a home purchase on an ARM (if you plan to live
there for a very long period of time). If the ARM is the only way you can
afford the home, you may have very big trouble in the future.


"HW "Skip" Weldon" <skip5700[at]yahoo.com> wrote in message
news260ov85ugbucpoesvkp0o8hm2q7bkqh5i[at]4ax.com...
- quote -

On Sun, 5 Oct 2003 06:12:24 CST, "John A. Weeks III"
<john[at]johnweeks.com> wrote:


- quote -

And heaven help him if he also needs some upkeep done (roof,
heating/air, carpentry, plumbing, electrical, etc.) during that
period.

-HW "Skip" Weldon
Columbia, SC

In article <ef6582c0.0310041849.4a313670[at]posting.google.com> ,
<gajaya1[at]netscape.net> wrote:

- quote -

For the average person, the answer is no by a factor of about 2.5.

- quote -

If you are comfortable living that way, and the bank will let you
do it, I really don't see any harm. You are taking a big risk,
but you know that, and its OK if you are willing to bet your
family financial future. With a little luck, you might just
make a few bucks in the deal.

One thing you might want to consider is looking at some of the
more creative loans, such as a 1 year arm. I see them advertised
under 5%, in fact, under 4% (but I am not sure if that is current).
The idea is to pay as little as possible monthly, but not make
that much of a pay down in the principal either.

- quote -

The biggest question here is why you would do this if you are only
going to keep it 3 to 5 years. You have to pay all of the closing
costs going in, the mortgage initiation fee (1%), then pay the
seller's end of the closing costs, plus the real estate selling
fee. This adds up to a lot of money, easily $40,000 or more, or
about $900 a month if spread over the 3 to 5 years that you are
living there. Just the $900 a month can get you a nice apartment
here in the Twin Cities, let alone live like a king if you add it
to the $2400 that you expect to pay for the PITI.

My advice here would have to be to look for something more
temporary, or some kind of alternative, until you figure out
what you are doing for the long term. This doesn't sound like
a good financial move for a 3 to 5 year window. Especially not
when we are facing a national financial disaster in the works,
and you are buying a home at the top of the market. If it turns
out that the bubble breaks while you are in this deal, you could
see it drop in value by 25% to 40% before you could get out,
making it impossible to sell given the mortgage. Then when the
7 year arm expires, and interest rates are hitting the fan,
you risk having very high payments for the same house, or
losing the whole 9 yards.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

I am in IT field earning around 73K per annum. My wife will never work
and have a kid. In my area last 5 years houses appreciated 8% average
and we cant find a decent home below 350K range. I am not sure I can
afford this.?

We have minimal living expenses used to live that way since childhood
and never eat at resturants and can save about 3k a month. Other than
helping relatives in need (spent 20K last 2 years )we do not spend for
ourselves only eat 1$ Mc chiken in the worst case scenarios. I know
this sound crazy but that is what we value most. we have a new car
already paid off. I expect to stay in the house between 3-5 years. I
hope to get a 7 year ARM mortgage and lower my mortgage in this period
and sell off the house when I move. I expect to earn a profit by
selling because it is in the best school area in the county.

Total Mortgage including Tax will come around 2.4K ... I can easily
pay that now but ? What if some thing goes wrong. I expect to sell the
house and move to an apartment. I know selling cost is 8%.
I need your honest openion whether I should go for it or not. I got a
good deal on a house also.