Thanks to everyone for all the responses and information. I am much more educated now. Also got a broker from a friend's recommendation to get a loan. Home is a beautiful thing to have.
Yeah but the difference in interest rate between the two loans might make it more valuable to just pay PMI on one loan...
I get this question frequently. My advice, is that if you plan on selling within 4-7 years, don't buy a townhome anywhere in the city. The resale market is full of horror stories. Many of the guppies who bought before they had kids and soon after realized the need of a good school district and the suburbs are having major problems selling and end up carrying two notes until they dump the intown product for a huge loss. If however, you know this is where you will be for a long while, try urbanliving.com. They work both with new properties and resales and have a very nice office downtown with a coffee bar. The reps will be very happy to walk you through everything and should be able to answer your questions very accurately in relation to price appreciation and area.
What do the insiders have to say about the market for all of these townhomes near downtown (off of 288, 3rd ward, midtown, etc)? They are popping up everywhere. Is the demand for them that high? I swear every week I see a new development near the freeway. Is there a decent web-site that details all of the advantages/disadvantages to these different loan types?
This is what I did...the 10% you borrow typically has a higher interest rate...mine is 6% or so...but the 80% loan I have is at 4 7/8ths fixed....so it is ok by me. DD
I have a townhome just east of Memorial Park (some call it Rice Military) that will go on the market in a few weeks. I'm hoping I'll be able to get more than what I paid back, but won't be too upset if all I get is my money back. On the one hand, we have decent size and since we moved in over 5 years ago, we can price relatively cheaply on aper square footage basis and still get some return. On the other hand, our location within Rice Military isn't that great and since we moved in so long ago it is now one of the older townhouses in the area. I'm completely done with townhouses personally. The home we just moved into is a nice 1 story, with a decent sized lot, etc. Townhomes have no lots, and lots of stairs. Don't get me wrong, for the right person, at the right stage of their life, they can be perfect. As far as an investment, overall Houston real estate shouldn't take much of a hit, even if the hot markets (Florida, Phoenix, California, etc.) continue to crash. But as has been pointed out, with so much new construction/supply of townhomes, resale may be difficult, and return on investment won't be all that great at all. I moved just north of I-10 off of Chimney Rock/Wirt, and I think there is decent room for continued appreciation in my new neighborhood as the super super super rich start pushing the super rich currently living on the Memorial side of the highway across towards Westview. Other places we looked included the Heights (though, high levels of appreciation there has already happened), Garden Oaks (which just ended up being too far out for us in the wrong direction) and then some around Bellaire/West University/Rice Village. But since I work more towards the South Loop of 610 than the north, I didn't really want to deal with 610/59/Westheimer traffic. Overall, I think a lot of areas throughout Houston will experience very similiar appreciations/depreciations over the next few years, so pick one that is most convenient to you.
No longer true. Congress and Bush just passed a law last week or so that allows PMI to be deductible. This makes a low downpayment + PMI solution much more attractive.
True.Yonkers knows his stuff.Here's a link I got from my NAR newsletter. There's always change going on in Real Estate. They making changes to make home ownership easier for people wanting the American Dream. http://www.micanews.com/press/press_releases/pr.cfv?ID=106 New Tax Deduction Will Make Housing More Affordable WASHINGTON, D. C. December 9, 2006 -- A new tax deduction will make homes more affordable next year by allowing many American home buyers to write-off premiums for private and government mortgage insurance. The deduction, which will help families who can’t afford the traditional 20 percent down payment for a home mortgage, will be effective for the 2007 tax year. “Making the cost of mortgage insurance tax deductible helps those who need it most: low- and moderate-income Americans, primarily first-time home buyers, who are financially responsible but simply don’t have the means to amass a 20 percent down payment, ” said Steve Smith, Chief Executive Officer of The PMI Group, Inc. and President of Mortgage Insurance Companies of America (MICA). “We congratulate Congress for taking this important step to address a key barrier to homeownership that so many Americans face. ” Borrowers closing loans to purchase homes in 2007 who have annual household incomes of $100, 000 or less will be able to get a low down payment mortgage and deduct the full cost of their mortgage insurance premiums on their federal tax return. “We are pleased that policymakers have recognized mortgage insurance as a cost of finance just like mortgage interest, ” said MICA Executive Vice President Suzanne Hutchinson. “Mortgage insurance plays a crucial role in maintaining the stability and continued health of the mortgage finance system. In today’s climate of steadily rising interest rates and slowing home price appreciation, an insured loan is often the most borrower-friendly alternative. ” The legislation has been supported by a broad range of consumer, business, taxpayer, civil rights, civic and labor groups. Following are some comments on the new deduction from some of these groups: “A tax deduction for mortgage insurance premiums will go a long way to help homeowners and potential homeowners who simply want to own a piece of the American dream, ” said Marc H. Morial, President and Chief Executive Officer of the National Urban League. “I congratulate both the U. S. House and the Senate for doing what’s right to make the goal of affordable homeownership a reality for every American. ” “This tax deduction will create important social benefits by offering relief to over-burdened taxpayers, ” said John Berthoud, President of the National Taxpayers Union. “Finally, homeowners will have the ability to make all the costs associated with the ongoing financing of their home truly tax deductible. ” “Homeownership contributes substantially to social stability, ” said Bruce Hahn, President and CEO of the American Homeowners Grassroots Alliance. “Yet homeownership remains just beyond the grasp of millions of Americans. Making the cost of mortgage insurance tax deductible helps put homeownership within reach for many more families. ” “Currently, many Latinos need loans with private mortgage insurance because they are unable to afford the 20 percent down payment traditionally needed to buy a home, ” said Guarione M. Diaz, President and CEO of the Cuban American National Council. “Policies such as this one help these families realize the aspiration of homeownership and fulfill an essential element of the American dream. ” “With a U. S. Hispanic homeownership rate of 48 percent (20 points below the national average of 68 percent), this legislation would enable more hardworking Hispanic families and consumers to become homeowners, ” said Manny Mirabal, President and CEO of the National Puerto Rican Coalition. “An estimated 33 percent of the families benefiting from this tax deduction would be minority homeowners. ” MICA is the trade association representing the private mortgage insurance industry. Its members help loan originators and investors make funds available to home buyers for low down payment mortgages by protecting these institutions from a major portion of the financial risk of default.
80/10/10 = 80 1st Mtg, 10 2nd Mtg, 10 Equity...Debt is your friend, especially for tax purposes...usually the 1st is for 30 and the 2nd Mtg is for 15 years, but both can be for 15 or other years...
Does anyone know the pros/cons of buying a foreclosed townhouse? I've heard there is a foreclosure list you can buy which updates every month and you pay a monthly fee for it. If you can get around 20% discount for a foreclosure, I'm wondering why more people do not attempt to buy these.
If it was only that easy. Foreclosed properties don't come with a seller's disclosure notice. You basically buy what you get. If you don't know how to look for potential damage that the house has it could cost you more than you think. Foundation problems, lead based paint, mold, etc. Those won't be disclosed when buying a foreclosure.You really have to work hard, and know what you're looking for to get that goooooodddddd deal. But they are out there.
I believe home values in my neighborhood (Westbury....northern edge) are about to go up. Prices in my neighborhood have been traditionally low, so there is room for movement. We just had our third Bellaire style "Mc Mansion" built on my street. A house four doors away went on the market for $200,000. And the house across the street from mine just sold for $190,000. The house next door to me is being cleaned up and about to be put on the market. I bought my place for $120,000.
What about the foreclosures that are relatively new? For example, someone who buys a brand new townhouse but finds that they can't afford it anymore a couple years later. Would most foundation and mold problems not really exist since it is relatively new?
Plus, I thought an AS-IS property just means the seller won't make any changes. That doesn't preclude you from getting an inspection does it?
i got my 20 downpayment from my crdit card which offers a 1.99 rate for the life of the loan.. the only drawback for this is you don't get to use the interest for tax exemptions. but 1.99, not bad.
Most likely it wouldn't exist. If it's a newer home that is being foreclosed, most likely the owner can't afford the mortgage payments anymore.But once again there might be problems lurking that you are not aware of. Maybe the washer flooded and flooded that whole floor. Lots of potential stuff could have happened. But going for foreclosure is potentially a good way to go. Basic rule is Be CAREFUL. Go see the home with a friend who is an inspector and what not.
They won't make changes. If a seller is selling a house as-is, some states are making them state the known defects. If you really like the house, have the contract written up contigent upon an inspection.If they disagree with the inspection, then you know there is something really really wrong with the house.
