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#1
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Half of americans can’t afford their house
So what exactly are your american residential mortgage rates these days?
Here in Canada, the typical home mortgage is between 1.99% and 2.99%. Your US rates are confusing, because unlike here in Canada (where we do have a single advertised rate) you have a bunch of other fees and "points" tacked on which makes it less clear what your actual "all-in" rate is, and also makes it hard to compare mortgages from bank to bank. But yes, just recently some financial instututions here in Canada began offering 1.99% mortgages (3 year fixed term I think). That's the entire rate - no extra junk thrown in on top. If you can pay 20% down, then no mortgage insurance required (by law). Minimum down payment is 5% (by law). Mortgage insurance will cost you from 3.3% of the mortgage amount (if your downpayment is the minimum 5%) to 1.25% (if the downpayment is just under 20%). Which means on a $200k house, with downpayment of 5% ($10k) the total insurance cost (regardless of mortgage term) is about $6k, and that falls to under $3k with a downpayment of 20% ($40k). =========================================== Half of Americans can’t afford their house June 4, 2014 As the housing market slowly recovers, a majority of homeowners and renters are finding it hard to meet rising rents and mortgage payments, new research finds. Over half of Americans (52%) have had to make at least one major sacrifice in order to cover their rent or mortgage over the last three years, according to the “How Housing Matters Survey,” which was commissioned by the nonprofit John D. and Catherine T. MacArthur Foundation and carried out by Hart Research Associates. These sacrifices include getting a second job, deferring saving for retirement, cutting back on health care, running up credit card debt, or even moving to a less safe neighborhood or one with worse schools. “Affordability issues are real and a major hurdle,” says Lawrence Yun, chief economist at the National Association of Realtors, an industry group. Home prices have increased 20% over the past two years while wages have barely gone up, he says. “Only by adding more new supply, via housing starts, can home prices be tamed,” Yun adds. In fact, construction of housing units has averaged around 1.5 million a year for the past five decades, he says, but it’s likely to be less than 1 million in 2014. What’s more, at least 15% of American homeowners (or residents of 78 counties across the country) were living in housing markets where the monthly mortgage payment on a median-priced home requires more than 30% of the monthly median household income — long considered the maximum for rent/mortgage repayments. Housing costs above that threshold are “unaffordable by historic standards,” says Daren Blomquist, vice president at real estate data firm RealtyTrac. In New York county/Manhattan, mortgage payments represent 77% of the median income and in San Francisco County represents 70%. ----------- Also see: Why the price of a new home is rising http://www.marke****ch.com/story/hom...ces-2014-06-03 ----------- Although mortgage rates are still quite low, down payments, poor credit and tighter lending standards remain three of the biggest hurdles for buying a home, especially among young people, Blomquist says. “The slow jobs recovery for young adults has made it harder for them to save and to get a mortgage.” Some 84% of young people are delaying major life decisions due to the poor economy, according to a 2013 survey by Generation Opportunity, a nonprofit think tank based in Arlington, Va. Some people also appear to be cooling on one facet of the American dream. About 43% of respondents in the “How Housing Matters Survey” say owning a home is no longer “an excellent long-term investment and one of the best ways for people to build wealth and assets,” and over half say buying a home has become less appealing. Although 70% of renters aspire to own a home, some 58% believe that “renters can be just as successful as owners at achieving the American dream.” ----------- Also see: Why your rent is so damn high http://www.marke****ch.com/story/mor...ent-2013-12-10 ----------- But they’re still suffering the aftershocks of the property bust, experts say. In the years after the recession of 2008, more than 7.5 million homeowners lost their home to foreclosure or short sale and about 9 million more homeowners are still underwater and owe more than their property is worth, Blomquist says. “If one looks at the last seven years as a predictor of housing market behavior in the future, it certainly should give one pause about whether buying a home is a good investment or not,” he adds. That’s not necessarily a bad thing, says Stuart Gabriel, director of UCLA’s Richard S. Ziman Center for Real Estate. “From a policy perspective, we overshot in prescribing homeownership too often and to those who would have benefited more from other housing solutions,” he says. Homeownership rates hit 64.8% in April, the lowest since 64.7% in the second quarter of 1995, according to the Census Bureau. “It’s wise to approach homeownership with more skepticism and more trepidation,” he says. The good news: Rising prices have lifted millions of homeowners out of negative equity. Since the lowest point in the housing market crash, rising prices have led to an additional $4 trillion in housing equity, going to existing homeowners, smart investors and those who can afford to buy, Yun says. Home prices, including distressed sales, increased 10.5% in April 2014 year-over-year, according to the latest survey from mortgage-data firm CoreLogic, representing the 26th consecutive month of annual increases in home prices. http://www.marke****ch.com/story/ove...ity-2014-06-03 |
#2
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Half of americans can?t afford their house
Your US rates are confusing, because unlike here in Canada (where we do
have a single advertised rate) you have a bunch of other fees and "points" tacked on which makes it less clear what your actual "all-in" rate is, and also makes it hard to compare mortgages from bank to bank. There is supposed to be an Annual Percentage Rate that includes all the interest and points. They can't practically advertise that because interest rates vary with amount of down payment and credit report. Don't mortgage rates vary with "good credit" vs. "bad credit" in Canada? But yes, just recently some financial instututions here in Canada began offering 1.99% mortgages (3 year fixed term I think). That's the entire You have *THREE YEAR* mortgages? On a $200k house with $10k down, that means payments of $5,277.00 *just for the principal*. Very few people are going to be able to afford that. (And if they can, do they really need a mortgage at all?) Or, if it has a big payment at the end, you're placing yourself between a rock and a hard place if you're forced to refinance after 3 years not knowing if you can (at any interest rate, and you'll be in big trouble if you are now "upside-down" at the end of 3 years). In the USA, it's more common to have 15-year or 30-year terms for fixed-rate mortgages. |
#3
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Half of americans can't afford their house
"HomeGuy" Home@Guy.com wrote in message
So what exactly are your american residential mortgage rates these days? Here in Canada, the typical home mortgage is between 1.99% and 2.99%. That sounds really good. Trouble is, you have to go to Canada to get it. -- dadiOH ____________________________ Winters getting colder? Tired of the rat race? Taxes out of hand? Maybe just ready for a change? Check it out... http://www.floridaloghouse.net |
#4
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Half of americans can't afford their house
On Wed, 4 Jun 2014 13:00:03 -0400, "dadiOH"
wrote: Here in Canada, the typical home mortgage is between 1.99% and 2.99%. That sounds really good. Trouble is, you have to go to Canada to get it. LMAO. Smack him again dadiOH!!! Under Jimmy Carter rates were up into 20%. Mine is 3.5% and I don't have to move to canada. My mortgage payment is less than renting |
#5
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Half of americans can't afford their house
On Wed, 4 Jun 2014 13:00:03 -0400, "dadiOH" wrote
in "HomeGuy" Home@Guy.com wrote in message So what exactly are your american residential mortgage rates these days? Here in Canada, the typical home mortgage is between 1.99% and 2.99%. That sounds really good. Trouble is, you have to go to Canada to get it. And most people would rather pay twice that rate to be able to live in the U.S. -- Web based forums are like subscribing to 10 different newspapers and having to visit 10 different news stands to pickup each one. Email list-server groups and USENET are like having all of those newspapers delivered to your door every morning. |
#6
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Half of americans can't afford their house
"HomeGuy" Home@Guy.com wrote in message ... But yes, just recently some financial instututions here in Canada began offering 1.99% mortgages (3 year fixed term I think). -- Please provide a picture of the hunting shack you live in at 1.99 for 3 years....LOL!! |
#7
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Half of americans can't afford their house
On 6/4/2014 2:03 PM, BurfordTJustice wrote:
"HomeGuy" Home@Guy.com wrote in message ... But yes, just recently some financial instututions here in Canada began offering 1.99% mortgages (3 year fixed term I think). -- Please provide a picture of the hunting shack you live in at 1.99 for 3 years....LOL!! Probably a balloon mortgage where all outstanding is then due and you are forced to refinance. |
#8
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Half of americans can?t afford their house
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#9
Posted to alt.home.repair,misc.consumers,misc.consumers.house
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Half of americans can?t afford their house
Gordon Burditt wrote:
Your US rates are confusing, because unlike here in Canada (where we do have a single advertised rate) you have a bunch of other fees and "points" tacked on which makes it less clear what your actual "all-in" rate is, and also makes it hard to compare mortgages from bank to bank. There is supposed to be an Annual Percentage Rate that includes all the interest and points. They can't practically advertise that because interest rates vary with amount of down payment and credit report. Don't mortgage rates vary with "good credit" vs. "bad credit" in Canada? But yes, just recently some financial instututions here in Canada began offering 1.99% mortgages (3 year fixed term I think). That's the entire You have *THREE YEAR* mortgages? On a $200k house with $10k down, that means payments of $5,277.00 *just for the principal*. Very few people are going to be able to afford that. (And if they can, do they really need a mortgage at all?) Or, if it has a big payment at the end, you're placing yourself between a rock and a hard place if you're forced to refinance after 3 years not knowing if you can (at any interest rate, and you'll be in big trouble if you are now "upside-down" at the end of 3 years). In the USA, it's more common to have 15-year or 30-year terms for fixed-rate mortgages. Hmmm, $200K house or $200K mortgage? Where the hell is 200K house? No mortgage here. I just have LOC which I don't use. Just in case for the unexpected, I arranged it long ago. |
#10
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Half of americans can't afford their house
Oren wrote:
On Wed, 4 Jun 2014 13:00:03 -0400, "dadiOH" wrote: Here in Canada, the typical home mortgage is between 1.99% and 2.99%. That sounds really good. Trouble is, you have to go to Canada to get it. LMAO. Smack him again dadiOH!!! Under Jimmy Carter rates were up into 20%. Mine is 3.5% and I don't have to move to canada. My mortgage payment is less than renting Hi, Same happened here. Then many home owners used to reun away leaving the house key at the bank. Also houses were sold for one dollar to get out of crushing interest rate. Then I had fixed rate so did not bother me. |
#11
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Half of americans can't afford their house
"Frank" wrote in message
... On 6/4/2014 2:03 PM, BurfordTJustice wrote: "HomeGuy" Home@Guy.com wrote in message ... But yes, just recently some financial instututions here in Canada began offering 1.99% mortgages (3 year fixed term I think). -- Please provide a picture of the hunting shack you live in at 1.99 for 3 years....LOL!! Probably a balloon mortgage where all outstanding is then due and you are forced to refinance. http://business.financialpost.com/20...e-rate-canada/ says: Investors Group rolls out 1.99% variable rate mortgage If you thought mortgage rates could not go any lower, you were wrong. Investors Group is rocking the mortgage world with what appears to be the deepest discount in Canadian history on a floating rate loan, offering a deal that takes an effective mortgage rate down to 1.99%. The company is now offering 101 basis points or 1.01 percentage points off its prime rate of 3% for a variable rate mortgage. Consumers can get the deal for a 36-month term which is shorter than the length offered by some of the major banks on the deep discounted five-year fixed rate mortgage which has dropped to around 3% - a controversial level that once drew the wrath of the department of finance. "We haven't seen a rate like this from a lender," said Rob McLister, founder of www.ratespy.com., referring to the steep discount. The offer from Investors Group is not available from brokers and is coming from the company's own sources, designed to make a major splash in the marketplace. -- Bobby G. |
#12
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Half of americans can?t afford their house
On 6/4/2014 3:17 PM, Kurt Ullman wrote:
In article , (Gordon Burditt) wrote: Don't mortgage rates vary with "good credit" vs. "bad credit" in Canada? But yes, just recently some financial instututions here in Canada began offering 1.99% mortgages (3 year fixed term I think). That's the entire You have *THREE YEAR* mortgages? On a $200k house with $10k down, that means payments of $5,277.00 *just for the principal*. Very few people are going to be able to afford that. (And if they can, do they really need a mortgage at all?) Or, if it has a big payment at the end, you're placing yourself between a rock and a hard place if you're forced to refinance after 3 years not knowing if you can (at any interest rate, and you'll be in big trouble if you are now "upside-down" at the end of 3 years). Sounds like maybe a 3-year ARM (and nothing bad ever happens there). More likely HG has nary a clue about what he is talking about. Nah, it's that the Canadian mortgage market differs substantially from the US market in a few ways. For starters, the mortgage is tied to the borrower, not the property, so the loan is portable. If the mortgage holder wants to buy a different house, the mortgaged is carried over to the new property. Canadian mortgages are five-year mortgages that are amortized over 25 years, after which the borrower can pay off the loan or roll over the mortgage for the remaining balance. That of course exposes the borrower to the risk of the interest rates having gone up in the interim. Conversely, the prepayment penalties are very steep, to discourage borrowers from taking advantage of a decline in rates. And Canadian homeowners can't deduct their mortgage interest. The Canadian system also requires banks to retain their loans, not sell them off to a third party. So their system puts more financial responsibility on the borrower, but also makes the originating lender responsible for the loan if it goes bad. Which is a major reason why their housing/mortgage market has remained stable while we went through a bubble and a crash. Longer term mortgages provide payment stability to the home buyers. On the other hand, in the US the average length of home ownership is only seven years, so most of the time buyers aren't in it for the full 30 years anyway. |
#13
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Half of americans can't afford their house
On 6/4/2014 10:27 AM, CRNG wrote:
On Wed, 4 Jun 2014 13:00:03 -0400, "dadiOH" wrote in "HomeGuy" Home@Guy.com wrote in message So what exactly are your american residential mortgage rates these days? Here in Canada, the typical home mortgage is between 1.99% and 2.99%. That sounds really good. Trouble is, you have to go to Canada to get it. And most people would rather pay twice that rate to be able to live in the U.S. In the U.S. the mortgage lending business is collapsing because such a high percentage of homeowners refinanced when rates were extremely low and are out of the refi market, probably forever. I.e. I refinanced at 2.625%/2.625%. No points, no fees, they even paid for the appraisal. So 2.99% is not an abnormally low rate, it's only about 0.5% less than the present rate that someone with good credit can get in the U.S. if they shop around for a loan. If they just walk into their bank and apply the rate will be higher and there are people like that. The other problem for mortgage companies in the U.S. is that so many houses are being sold to cash buyers so there isn't any loan. This is also a problem for non-cash buyers because sellers will accept a cash offer if the offer is the same amount as an offer where the buyer is getting a loan. |
#14
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Half of americans can't afford their house
On 6/4/2014 4:54 PM, Robert Green wrote:
"Frank" wrote in message ... On 6/4/2014 2:03 PM, BurfordTJustice wrote: "HomeGuy" Home@Guy.com wrote in message ... But yes, just recently some financial instututions here in Canada began offering 1.99% mortgages (3 year fixed term I think). -- Please provide a picture of the hunting shack you live in at 1.99 for 3 years....LOL!! Probably a balloon mortgage where all outstanding is then due and you are forced to refinance. http://business.financialpost.com/20...e-rate-canada/ says: Investors Group rolls out 1.99% variable rate mortgage If you thought mortgage rates could not go any lower, you were wrong. Investors Group is rocking the mortgage world with what appears to be the deepest discount in Canadian history on a floating rate loan, offering a deal that takes an effective mortgage rate down to 1.99%. The company is now offering 101 basis points or 1.01 percentage points off its prime rate of 3% for a variable rate mortgage. Consumers can get the deal for a 36-month term which is shorter than the length offered by some of the major banks on the deep discounted five-year fixed rate mortgage which has dropped to around 3% - a controversial level that once drew the wrath of the department of finance. "We haven't seen a rate like this from a lender," said Rob McLister, founder of www.ratespy.com., referring to the steep discount. The offer from Investors Group is not available from brokers and is coming from the company's own sources, designed to make a major splash in the marketplace. -- Bobby G. I don't know details in Canada but do know in the US that to refinance, you pay a lot of refinance charges not related to the mortgage percentage. These costs can be considerable and may be a major source of profits to the mortgage holder. |
#15
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Half of americans can't afford their house
Frank wrote:
On 6/4/2014 4:54 PM, Robert Green wrote: "Frank" wrote in message ... On 6/4/2014 2:03 PM, BurfordTJustice wrote: "HomeGuy" Home@Guy.com wrote in message ... But yes, just recently some financial instututions here in Canada began offering 1.99% mortgages (3 year fixed term I think). -- Please provide a picture of the hunting shack you live in at 1.99 for 3 years....LOL!! Probably a balloon mortgage where all outstanding is then due and you are forced to refinance. http://business.financialpost.com/20...e-rate-canada/ says: Investors Group rolls out 1.99% variable rate mortgage If you thought mortgage rates could not go any lower, you were wrong. Investors Group is rocking the mortgage world with what appears to be the deepest discount in Canadian history on a floating rate loan, offering a deal that takes an effective mortgage rate down to 1.99%. The company is now offering 101 basis points or 1.01 percentage points off its prime rate of 3% for a variable rate mortgage. Consumers can get the deal for a 36-month term which is shorter than the length offered by some of the major banks on the deep discounted five-year fixed rate mortgage which has dropped to around 3% - a controversial level that once drew the wrath of the department of finance. "We haven't seen a rate like this from a lender," said Rob McLister, founder of www.ratespy.com., referring to the steep discount. The offer from Investors Group is not available from brokers and is coming from the company's own sources, designed to make a major splash in the marketplace. -- Bobby G. I don't know details in Canada but do know in the US that to refinance, you pay a lot of refinance charges not related to the mortgage percentage. These costs can be considerable and may be a major source of profits to the mortgage holder. Hi, In U.S. still your mortgage intewreste payment is tax deductible? Never up here. Refinancing has no fees or charges unless we switch lender. |
#16
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Half of americans can't afford their house
On 6/5/2014 12:48 PM, Tony Hwang wrote:
Hi, In U.S. still your mortgage intewreste payment is tax deductible? Never up here. Refinancing has no fees or charges unless we switch lender. It is still deductible, but not for everyone, depending on circumstances. We have a "standard deduction" that is 10% of your income. Everyone gets to deduct 10% no matter what you have to itemize. If the interest paid is low and you don't have more than 10% in itemized deductions, you don't gain any advantage. In the early years when your income is probably lower and the mortgage payments are mostly interest is when it is a big help on taxes. Re-Fi fees can be from near zero to a few thousand dollars. Depends on the financial institution. Some want to get their paperwork cost paid for up front, then they sell the mortgage and are done. Others will not charge up fron, but will service the mortgage long term and make their money over time. |
#17
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Half of americans can't afford their house
On 6/5/2014 10:36 AM, Ed Pawlowski wrote:
snip Re-Fi fees can be from near zero to a few thousand dollars. Depends on the financial institution. Some want to get their paperwork cost paid for up front, then they sell the mortgage and are done. Others will not charge up fron, but will service the mortgage long term and make their money over time. The last re-fi we did, last year, the broker I went with was zero fees, and has the lowerst rates, and they sold the loan within a year. The broker, or bank, makes their money from the spread between the wholesale rate and the retail rate, as well as from any fees they can charge or pass on. Sometimes it's worth paying points to bring the rate down but often it's better to go for a zero point loan. I would have paid points to bring the 2.625% rate down but the savings would not have been worth it. The least expensive choice of a broker may not be the easiest re-fi in terms of the level of personal support you receive, but IMVAIO it's worth dealing with that lack of personal support in exchange for the long-term benefits of a lower rate. A high-volume broker with efficient systems in place can process loans very quickly and offer lower rates. A half point spread between wholesale and retail, on a $400K loan is $2000, enough to subsidize all the fees and the appraisal and still make $1200-1500 or so on the re-fi. Low value loans often cost more because the lender makes less money from the spread. A good loan processor working with a well-qualified borrower that has their act together can do a loan in about three hours (sum total of time). I was e-mailing PDFs of documents minutes after they requested them. The big problem with lenders seems to be that they always seem to ask for one more document just when you think you're done with sending documents. The underwriter always seems to find something wrong with the loan processor's package that requires additional documentation. |
#18
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Half of americans can't afford their house
On Thu, 05 Jun 2014 11:59:08 -0500, Moe DeLoughan
wrote: If your home mortgage rate is 5% or less, congratulate yourself on paying less than your parents and grandparents did. If it's under 4%, buy yourself a beer. Historically, that is an outrageously low rate for a home mortgage. I'll take that beer "...in the early 1980s, mortgage interest rates brushed the stratospheric highs of 18 percent and even 19 percent. Imagine trying to get a home loan with an interest rate of 18 percent." Bankrate.com I mistakenly said 20% the other day... https://tinyurl.com/l5qlk3z Even credit card interest rates reached above 18%, though deductible on taxes. Ronald Reagan ended that deduction. |
#19
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Half of americans can't afford their house
"Oren" wrote in message
On Thu, 05 Jun 2014 11:59:08 -0500, Moe DeLoughan wrote: If your home mortgage rate is 5% or less, congratulate yourself on paying less than your parents and grandparents did. If it's under 4%, buy yourself a beer. Historically, that is an outrageously low rate for a home mortgage. I'll take that beer "...in the early 1980s, mortgage interest rates brushed the stratospheric highs of 18 percent and even 19 percent. Imagine trying to get a home loan with an interest rate of 18 percent." Bankrate.com I mistakenly said 20% the other day... Eh, what's 2% among friends Those high rates weren't all bad as long as you weren't a borrower; if you were a lender, they were golden. I had some tax free bonds paying 13%; unfortunately, they were callable and called they were but I got 2-3 years out of them first. One answer for the high mortgage rates was to extend the term. In Japan, they were writing 150 year mortgages...daddy's gift to future generations. -- dadiOH ____________________________ Winters getting colder? Tired of the rat race? Taxes out of hand? Maybe just ready for a change? Check it out... http://www.floridaloghouse.net |
#20
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Half of americans can't afford their house
"Tony Hwang" wrote in message
Hi, In U.S. still your mortgage intewreste payment is tax deductible? Never up here. Refinancing has no fees or charges unless we switch lender. No, not deductible from tax, deductible from income upon which tax is figured. -- dadiOH ____________________________ Winters getting colder? Tired of the rat race? Taxes out of hand? Maybe just ready for a change? Check it out... http://www.floridaloghouse.net |
#21
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Half of americans can?t afford their house
Don't mortgage rates vary with "good credit" vs. "bad credit" in
Canada? But yes, just recently some financial instututions here in Canada began offering 1.99% mortgages (3 year fixed term I think). That's the entire You have *THREE YEAR* mortgages? On a $200k house with $10k down, that means payments of $5,277.00 *just for the principal*. Very few people are going to be able to afford that. (And if they can, do they really need a mortgage at all?) Or, if it has a big payment at the end, you're placing yourself between a rock and a hard place if you're forced to refinance after 3 years not knowing if you can (at any interest rate, and you'll be in big trouble if you are now "upside-down" at the end of 3 years). Sounds like maybe a 3-year ARM (and nothing bad ever happens there). A "3-year ARM" that guarantees renewability for 25-30 years but could up the interest rate every 3 years is a risk, but not an extreme risk. But that doesn't sound like a 3-year mortgage to me. A "3-year ARM" that has a big balloon payment at the end, is *NOT* renewable, and requires you to qualify (not "re-qualify" - you're starting over from scratch) every 3 years seems to me to be an insane risk. Get sick or lose your job at the wrong time, instant homelessness. More likely HG has nary a clue about what he is talking about. |
#22
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Half of americans can't afford their house
On 6/5/2014 12:48 PM, Tony Hwang wrote:
Frank wrote: On 6/4/2014 4:54 PM, Robert Green wrote: "Frank" wrote in message ... On 6/4/2014 2:03 PM, BurfordTJustice wrote: "HomeGuy" Home@Guy.com wrote in message ... But yes, just recently some financial instututions here in Canada began offering 1.99% mortgages (3 year fixed term I think). -- Please provide a picture of the hunting shack you live in at 1.99 for 3 years....LOL!! Probably a balloon mortgage where all outstanding is then due and you are forced to refinance. http://business.financialpost.com/20...e-rate-canada/ says: Investors Group rolls out 1.99% variable rate mortgage If you thought mortgage rates could not go any lower, you were wrong. Investors Group is rocking the mortgage world with what appears to be the deepest discount in Canadian history on a floating rate loan, offering a deal that takes an effective mortgage rate down to 1.99%. The company is now offering 101 basis points or 1.01 percentage points off its prime rate of 3% for a variable rate mortgage. Consumers can get the deal for a 36-month term which is shorter than the length offered by some of the major banks on the deep discounted five-year fixed rate mortgage which has dropped to around 3% - a controversial level that once drew the wrath of the department of finance. "We haven't seen a rate like this from a lender," said Rob McLister, founder of www.ratespy.com., referring to the steep discount. The offer from Investors Group is not available from brokers and is coming from the company's own sources, designed to make a major splash in the marketplace. -- Bobby G. I don't know details in Canada but do know in the US that to refinance, you pay a lot of refinance charges not related to the mortgage percentage. These costs can be considerable and may be a major source of profits to the mortgage holder. Hi, In U.S. still your mortgage intewreste payment is tax deductible? Never up here. Refinancing has no fees or charges unless we switch lender. Others have correctly stated that it is a tax deduction, i.e. not taxable. Tax deductions for other interest payments were done away with years ago. I believe one of my sons took out a homeowners loan to pay off his college loans and increased his home mortgage to get the deduction. |
#23
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Half of americans can't afford their house
On Sun, 8 Jun 2014 08:24:06 -0700 (PDT), trader_4
wrote: On Sunday, June 8, 2014 10:20:00 AM UTC-4, o m e H o m e G u y wrote: What a buffoooooon! A few weeks ago he was here saying he had a million dollars in real estate property and a million dollars in the bank - LMAO. |
#24
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Half of americans can't afford their house
Google Giggler trader_4 wrote:
And our rates are "all in". None of the bull**** extra fees and "points" that are tacked on to your mortgage costs (what the hell are points anyways?). You don't even know what points are, I know that they are a way for your banks to bull**** you on the effective mortgage rate that you end up paying above and beyond the advertised rate or the rate that you negotiate with them. The claim that the same thing doesn't exist in Canada, is obviously BS. He http://www.canadamortgage.com/calculators/buydown.cgi In Canada, it's called "buying down". It's a term that is unheard of by residential purchasers (ie - the typical home owner). So stop bull****ing and read this; ------------------ http://www.canadamortgage.com/articl...TOKEN=86657438 Interest Rate Buy Downs Developer Buy Downs Many developers "buy down" the interest rate on the arranged financing for their newly constructed housing units. They offer lower rates as an inducement to purchasers, particularly when market interest rates are high. The developer buys down the interest rate by paying an amount to the purchasers mortgage lender. Essentially they are paying part of the borrowers/purchasers interest for them in advance. ------------------- Individual home owners do not negotiate any sort of "buy downs" with banks when they negotiate their mortgage. My first and only mortgage was for 5.95% back in 1999. My choices were weekly (4-times-a-month), bi-weekly (twice a month) and monthly mortgage payments (made via direct withdrawl from my bank account - which at the time was an account at a different bank - I had no accounts with the bank that I got the mortgage from). That was a 7-year term (I don't know if it was amortized over 7 years or 15 years). I could make once or twice-yearly balloon payments of $20k without penalty. The mortgage was for $150k (I paid 20% down, so I didn't need mortgage insurance). I paid the mortgage off in 4 years anyways after a few balloon payments. I think there was something like $236 a week coming out of my account while I was paying the mortgage. And no, there was no such thing as paying extra for "buy downs". If you can afford to throw extra money at the bank for a buy-down, you can just as easily throw extra money into the downpayment and end up with a smaller mortgage (and hence lower mortgage payments) so the concept of a "buy down" doesn't really make any sense. In the USA it's called points. With either, buy paying some cash upfront, you lower the interest rate for the duration of the loan. Why don't you just take that extra cash and make a bigger downpayment? I'm sure it would lower any sort of mortgage insurance costs that you're forced to pay, and as I explained above it will lower your mortgage amount and hence automatically mean lower mortgage payments (even if the mortgage rate doesn't change). What is a Credit Score? I didn't say that there were private outfits that keep track of your credit worthiness here in Canada. I for one have never had to pay any attention to my credit report. Apparently (and I've just looked this up, before reading the exact same stuff you just posted) we seem to have the same "credit score" system as in the US, with numbers that range from 300 to 900, where 650 and higher means you're more likely to have your loan or mortgage granted. In Canada, while you can ask for a free credit report by mail from either of the two credit reporting agencies, you have to pay about $25 to get your actual credit score. What a buffoooooon! I guess I just have enough money to buy the things I need (cars, homes, etc) without needing to know about that ****. But still, our mortgage rates are lower that what they ordinarily should be vs the US when you take into account the current federal bank rates. |
#25
Posted to alt.home.repair,misc.consumers
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Half of americans can't afford their house
Oren wrote:
A few weeks ago he was here saying he had a million dollars in real estate property and a million dollars in the bank - LMAO. That's still true. I hope that doesn't make you envious. |
#26
Posted to alt.home.repair
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Half of americans can't afford their house
On Sunday, June 8, 2014 12:14:56 PM UTC-4, o m e H o m e G u y wrote:
Google Giggler trader_4 wrote: And our rates are "all in". None of the bull**** extra fees and "points" that are tacked on to your mortgage costs (what the hell are points anyways?). You don't even know what points are, I know that they are a way for your banks to bull**** you on the effective mortgage rate that you end up paying above and beyond the advertised rate or the rate that you negotiate with them. A few minutes ago, you freely admitted you didn't even know what points we " (what the hell are points anyways?). " So, obviously you're in no position to comment. The claim that the same thing doesn't exist in Canada, is obviously BS. He http://www.canadamortgage.com/calculators/buydown.cgi In Canada, it's called "buying down". It's a term that is unheard of by residential purchasers (ie - the typical home owner). Here's a thread where residential Canadian purchasers are talking about having done buy downs, ie points: http://army.ca/forums/index.php?topic=82975.0 "I'm hoping others are willing to share their experiences regarding mortgage rate buy downs via the IRP program." "I'm curious how many have taken advantage of this? We did for our first house via the IRP program and have really benefited from a low interest mortgage." "I used it for my recent move and have an amazing fixed rate for my mortgage." "We did this and since we bought a fixxer upper for dirt cheap, we combined the buy down with our interest free home loan for a combined mortgage rate of 0.845%" So, first time buyers in Canada are using it, understand it, but it's way beyond Homlessguy. So stop bull****ing and read this; ------------------ http://www.canadamortgage.com/articl...TOKEN=86657438 Interest Rate Buy Downs Developer Buy Downs Many developers "buy down" the interest rate on the arranged financing for their newly constructed housing units. They offer lower rates as an inducement to purchasers, particularly when market interest rates are high. The developer buys down the interest rate by paying an amount to the purchasers mortgage lender. Essentially they are paying part of the borrowers/purchasers interest for them in advance. Sure, the seller can pay the buy down/points. Makes perfect sense that a developer would do that to offer mortgage rates that are lower. So what? You claimed it didn't exist in Canada and buydowns are a scam. Then those developers must be scammers. How can that be allowed in the great country of Canada? Individual home owners do not negotiate any sort of "buy downs" with banks when they negotiate their mortgage. See the thread example cited where buyers did exactly that. My first and only mortgage was for 5.95% back in 1999. If you've only had one mortgage, why should anyone even listen to you? My choices were weekly (4-times-a-month), bi-weekly (twice a month) and monthly mortgage payments (made via direct withdrawl from my bank account - which at the time was an account at a different bank - I had no accounts with the bank that I got the mortgage from). That was a 7-year term (I don't know if it was amortized over 7 years or 15 years). I could make once or twice-yearly balloon payments of $20k without penalty. The mortgage was for $150k (I paid 20% down, so I didn't need mortgage insurance). I paid the mortgage off in 4 years anyways after a few balloon payments. I think there was something like $236 a week coming out of my account while I was paying the mortgage. And no, there was no such thing as paying extra for "buy downs". If you can afford to throw extra money at the bank for a buy-down, you can just as easily throw extra money into the downpayment and end up with a smaller mortgage (and hence lower mortgage payments) so the concept of a "buy down" doesn't really make any sense. Yes it does. Go use one of the calculators and you'll see that if you spend $3,000 on points, you'll lower the monthly payment significantly more than if you put down $3,000 more as downpayment. Also, IDK how it's treated in Canada, but you're bitching about the USA and here points are tax deductible, a down payment is not. If you're in the 35% tax bracket, that $3,000 becomes $1,950 in actual dollars. In the USA it's called points. With either, buy paying some cash upfront, you lower the interest rate for the duration of the loan. Why don't you just take that extra cash and make a bigger downpayment? Covered above. I'm sure it would lower any sort of mortgage insurance costs that you're forced to pay, and as I explained above it will lower your mortgage amount and hence automatically mean lower mortgage payments (even if the mortgage rate doesn't change). What is a Credit Score? I didn't say that there were private outfits that keep track of your credit worthiness here in Canada. Of course not, you said the exact opposite: "And credit scores? It's practically unheard of up here in Canada." Which of course is totally wrong. I for one have never had to pay any attention to my credit report. It's obvious to everyone here that there is a whole lot that you don't pay any attention to. Note that you not paying attention and whether something exists or not, are two very different things. Apparently (and I've just looked this up, before reading the exact same stuff you just posted) we seem to have the same "credit score" system as in the US, with numbers that range from 300 to 900, where 650 and higher means you're more likely to have your loan or mortgage granted. Well, there you go! In Canada, while you can ask for a free credit report by mail from either of the two credit reporting agencies, you have to pay about $25 to get your actual credit score. IDK about the process in Canada, but what's stated above doesn't make sense. A free credit report from either agency and having to pay $25 to get your score does not compute. What a buffoooooon! I guess I just have enough money to buy the things I need (cars, homes, etc) without needing to know about that ****. That's fine, but then stop telling us how it works. |
#27
Posted to alt.home.repair,misc.consumers,misc.consumers.house
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Half of americans can't afford their house
trader_4 wrote:
Here's a thread where residential Canadian purchasers are talking about having done buy downs, ie points: http://army.ca/forums/index.php?topic=82975.0 "I'm hoping others are willing to share their experiences regarding mortgage rate buy downs via the IRP program." "I'm curious how many have taken advantage of this? We did for our first house via the IRP program and have really benefited from a low interest mortgage." So, first time buyers in Canada are using it, understand it, but it's way beyond Home guy. Explain how you can possibly come out ahead by paying up-front to reduce your mortgage rate when instead you can apply that same payment to increase your downpayment. Individual home owners do not negotiate any sort of "buy downs" with banks when they negotiate their mortgage. See the thread example cited where buyers did exactly that. I've never heard of this, but then again it's been 14 years since I had to deal with getting a mortgage. If you can afford to throw extra money at the bank for a buy- down, you can just as easily throw extra money into the downpayment and end up with a smaller mortgage (and hence lower mortgage payments) so the concept of a "buy down" doesn't really make any sense. Yes it does. Go use one of the calculators and you'll see that if you spend $3,000 on points, you'll lower the monthly payment significantly more than if you put down $3,000 more as downpayment. --------- Mortgage Points: What's The Point? By Lisa Smith on August 10, 2012 http://www.investopedia.com/articles...gforpoints.asp The structure of home mortgages varies around the world. Paying for mortgage points is a common practice in the United States and, at least according to anecdotal evidence, it may be a uniquely American approach to home financing. What Mortgage Points Are Mortgage points come in two varieties: origination points and discount points. In both cases, each point is equal to 1% of the total amount mortgaged. For example, on a $100,000 home, one point is equal to $1,000. Origination points are used to compensate loan officers. Not all mortgage providers require the payment of origination points, and those that do are often willing to negotiate the fee. Origination points are not tax deductible. Discount points are prepaid interest. The purchase of each point generally lowers the interest rate on your mortgage by 0.25%. Most lenders provide the opportunity to purchase anywhere from zero to three discount points. We will focus mainly on discount points and how they can decrease your overall mortgage payments. It is important to note, however, that when lenders advertise rates, they often show a rate that is based on the purchase of points. ---------- What a lot of mumbo-jumbo those "points" are. I can tell you that it's not common here in Canada to have a mortgage where these points are an option. As the blurb above implies, you're pre-paying a part of your interest, and as the rest of the article explains, whether it pays off in your favor depends on how long you live in the house. ----------- Consider the following example: * On a $100,000 mortgage with an interest rate of 6%, your monthly payment for principal and interest is $599.55 per month. * With the purchase of three discount points, your interest rate would be 5.25%, and your monthly payment would be $552.20 per month. Purchasing the three discount points would cost you $3,000 in exchange for a savings of $47.35 per month. You will need to keep the house for 63 months to break even on the point purchase. Since a 30-year loan lasts 360 months, purchasing points is a wise move if you plan to live in your new home for a long time. If, on the other hand, you plan to stay only for a few years, you may wish to purchase fewer points, or none at all. ----------- Regarding mortgage terms: http://worthwhile.typepad.com/worthw...icans-can.html --------- For example, in Canada the longest term for which a mortgage rate can be fixed is typically no more than ten years, while mortgage maturities are commonly 25 years. http://en.wikipedia.org/wiki/Fixed-r...ge#Comparisons ---------- Mortgage interest is not deductible in Canada, hence Canadian homeowners tend not to find long-amortization mortgages attractive. CMHC mortgage insurance does not insure mortgages with amortization terms longer than 25 years. While mortgage interest is not deductible in personal income tax in Canada, any capital gains you make on the sale of your primary residence is tax-exempt. (and as a side note, any lottery winnings you have are also tax-exempt). In Canada, while you can ask for a free credit report by mail from either of the two credit reporting agencies, you have to pay about $25 to get your actual credit score. IDK about the process in Canada, but what's stated above doesn't make sense. A free credit report from either agency and having to pay $25 to get your score does not compute. What's in your credit report is some sort of summary of how you've handled your debts, any that you've defaulted on, etc. Your actual credit SCORE (that number between 300 and 900) is computed based on some sort of "secret" forumula, and you don't get that number as part of your "free" credit report. Anyone (including you) that wants to know your credit SCORE has to pay $25 to get it. Apparently, someone that always pays off their debts in full (ie - paying off entire monthly credit-card balance) can actually have a LOWER credit SCORE than someone who maintains a balance (but always pays at least the monthly minimum amount). The explanation is that someone who runs a credit-card balance (but always pays some of it every month) is more "valuable" to a lender vs someone who always pays their balance in full. |
#28
Posted to alt.home.repair
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Half of americans can't afford their house
On Sunday, June 8, 2014 3:18:23 PM UTC-4, o m e H o m e G u y wrote:
trader_4 wrote: Here's a thread where residential Canadian purchasers are talking about having done buy downs, ie points: http://army.ca/forums/index.php?topic=82975.0 "I'm hoping others are willing to share their experiences regarding mortgage rate buy downs via the IRP program." "I'm curious how many have taken advantage of this? We did for our first house via the IRP program and have really benefited from a low interest mortgage." So, first time buyers in Canada are using it, understand it, but it's way beyond Home guy. Explain how you can possibly come out ahead by paying up-front to reduce your mortgage rate when instead you can apply that same payment to increase your downpayment. Been there, done that. It lowers the interest rate and the monthly payment for the duration of the loan. If you can afford and qualify for a payment of $2000 a month, but you can't qualify and afford a higher payment, then paying a couple points could mean you can get the mortgage and the lower payment, while without it you can't. I also explained to you that points are tax deductible, so if you pay $3000 in points it's really only costing you $1950. And after you recoup that amount, you're ahead in paying less interest for the rest of the loan. Individual home owners do not negotiate any sort of "buy downs" with banks when they negotiate their mortgage. See the thread example cited where buyers did exactly that. I've never heard of this, but then again it's been 14 years since I had to deal with getting a mortgage. If you can afford to throw extra money at the bank for a buy- down, you can just as easily throw extra money into the downpayment and end up with a smaller mortgage (and hence lower mortgage payments) so the concept of a "buy down" doesn't really make any sense. Yes it does. Go use one of the calculators and you'll see that if you spend $3,000 on points, you'll lower the monthly payment significantly more than if you put down $3,000 more as downpayment. --------- Mortgage Points: What's The Point? By Lisa Smith on August 10, 2012 http://www.investopedia.com/articles...gforpoints.asp The structure of home mortgages varies around the world. Paying for mortgage points is a common practice in the United States and, at least according to anecdotal evidence, it may be a uniquely American approach to home financing. What Mortgage Points Are Mortgage points come in two varieties: origination points and discount points. In both cases, each point is equal to 1% of the total amount mortgaged. For example, on a $100,000 home, one point is equal to $1,000. Origination points are used to compensate loan officers. Not all mortgage providers require the payment of origination points, and those that do are often willing to negotiate the fee. Origination points are not tax deductible. Discount points are prepaid interest. The purchase of each point generally lowers the interest rate on your mortgage by 0.25%. Most lenders provide the opportunity to purchase anywhere from zero to three discount points. We will focus mainly on discount points and how they can decrease your overall mortgage payments. It is important to note, however, that when lenders advertise rates, they often show a rate that is based on the purchase of points. ---------- What a lot of mumbo-jumbo those "points" are. If you don't want to pay points there are plenty of no points mortages available here. If you want a lower rate, you can get one with points. What's the problem with people having a choice? I never said that paying points are a good idea, for most people. I can tell you that it's not common here in Canada to have a mortgage where these points are an option. As the blurb above implies, you're pre-paying a part of your interest, and as the rest of the article explains, whether it pays off in your favor depends on how long you live in the house. That's how it works. So, again, what's your problem? ----------- Consider the following example: * On a $100,000 mortgage with an interest rate of 6%, your monthly payment for principal and interest is $599.55 per month. * With the purchase of three discount points, your interest rate would be 5.25%, and your monthly payment would be $552.20 per month. Purchasing the three discount points would cost you $3,000 in exchange for a savings of $47.35 per month. You will need to keep the house for 63 months to break even on the point purchase. No, because as previously explained, points are tax deductible. If you're in the 35% bracket, you'd be even in just 41 months and ahead after that, in the USA. Since a 30-year loan lasts 360 months, purchasing points is a wise move if you plan to live in your new home for a long time. If, on the other hand, you plan to stay only for a few years, you may wish to purchase fewer points, or none at all. That's correct, that's how it works. ----------- Regarding mortgage terms: http://worthwhile.typepad.com/worthw...icans-can.html --------- For example, in Canada the longest term for which a mortgage rate can be fixed is typically no more than ten years, while mortgage maturities are commonly 25 years. OMG. If that were going on in the USA you'd say it was a time bomb and people are getting screwed. What happens if after 10 years rates are 3x what they are today? And given that they are extraordinarily low right now, that's a real possibility. What's wrong with you Canadians and your country? Here you can get a 20 or 30 year fixed rate mortgage. |
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