Honest Advice to those seeking mortgage

[MichiganMommy]

Hello ALL!

I stayed away from chiming in until today. Quite honestly I was really taken back by "hopeful's" posts. This thread is not what started the whole thing. If you want to read the thread that started this, go to " Down Payment or PDF...which one should I do?"....I was just looking for some insight, not to be ridiculed...that is how I felt, by someone who has known me based on only a few posts, none the less...it was frozen by a moderator because how heavy things became.

What this OP does not know is that I have survived a horrific, abusive marriage, was a single parent for several years (until I remarried a wonderful man), managed to get my masters AND doctorate degree during that time AND go from making a little over 50,000 a year to now making $117,000. All of this I have done in what some would consider to be a realtively short period of time...AND I am only 37 years old.

So, what the "hopeful" OP doesn't know about me, is that I live by the mantra I can do anything if I am committed, educated and put my mind to it. Owning a home (within the next 60-90 days) will be no different than all of my other successes. And, I can only hope that those of us the wish on someone foreclosure in 3 years, doesn't find themselves in that very situation. I have learned in my realtively short life that it can only take one day, one moment in time, for God to decide a fate for us different than we had planned for ourselves.

I only want to say THANK YOU to the people that took the time to send me a personal message of encouragement through the personal email. It meant a lot!!!!!!!!!

We all have a past, we all have a future. If we stick together and use our collective wisdom AND support each other we can do just about anything!

Remember....it is not WHAT you say, it is HOW you say it.

God Bless to all of the wonderful people on this site.

[cliccmade]

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@Anonymous wrote:

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@cliccmade wrote:

Why pay rent when you can own? Makes no sense. Buy a house asap and invest in yourself. Anyone saying anything else is just silly.

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What's silly is making overly broad statements like that. There are many situations where renting is superior to buying, especially if it's short term, or if there's great rent control in your area, or if you don't have the credit or other financial necessities to purchase a home. It's a big decision that each person has to make for themselves after a careful consideration of all of the factors. Why do you think myFICO has a "is it better to rent or buy" calculator on their site?

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There is no situation where renting is superior to owning. If your paying 1000 for rent you might as well be paying that 1000 towards a mortgage. Otherwise its considered throwing your money away. Why? Because you making your landlord rich. Anyone with any common sense would prefer to own versus rent. Its comes down to if you meet the guidelines ownership and if you do you will own 9 times out of 10.

[demi]

MM-- I read the original thread the other day, and that was one of the reasons I didn't rush in. Congratulations on all your success. Same day I was getting it from someone else and that thread was cut off...I was trying to be helpful, but rereading my comments they were a little blunt (unrelated thread) I still want to know why this person is telling people not to buy, when he bought 4 months ago. I also do not appreciate people coming out of nowhere and felt like he was trying to "educate us all hicks." Many of use have been at this for a long time and have learned a lot from this forum, and other places. Anyway, once again, I agree with the concept that we should have our act together before we buy a house, and don't agree with much more he had to say.

[MattH]

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@cliccmade wrote:

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@Anonymous wrote:

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@cliccmade wrote:

Why pay rent when you can own? Makes no sense. Buy a house asap and invest in yourself. Anyone saying anything else is just silly.

---

What's silly is making overly broad statements like that. There are many situations where renting is superior to buying, especially if it's short term, or if there's great rent control in your area, or if you don't have the credit or other financial necessities to purchase a home. It's a big decision that each person has to make for themselves after a careful consideration of all of the factors. Why do you think myFICO has a "is it better to rent or buy" calculator on their site?

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There is no situation where renting is superior to owning. If your paying 1000 for rent you might as well be paying that 1000 towards a mortgage. Otherwise its considered throwing your money away. Why? Because you making your landlord rich. Anyone with any common sense would prefer to own versus rent. Its comes down to if you meet the guidelines ownership and if you do you will own 9 times out of 10.

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Bzzzt! Wrong, there are many situations when renting makes sense. Rental rates and real estate prices both fluctuate, but they don't fluctuate in lockstep so there are times when rentals are cheap relative to buying and times when rentals are expensive relative to buying. When rents are low it can make financial sense even for somebody who could buy, to rent and invest the capital elsewhere.

Also, buying and selling real estate has large transaction costs, to for a person who expects to move in a year or two buying rarely makes sense. And renting is much lower risk for somebody with limited reserves (the landlord gets to fix the furnace, not the tenant).

Buying can make sense for some people in some situations, my wife and I own our home because we think it makes sense for us.

[MichiganMommy]

I forgot to say I can do anything if I have GOD on my side. Sorry to offend anyone, but without him, I can do nothing. With him, ALL things are possible.

[Anonymous]

As Suze Orman always says, money is an emotional issue, and we can really see this by the tone of the responses to my original post. Although not directed at any one person, several posters have taken my suggestion to WAIT quite literally. Here's the 411 on my home purchase in February: I got sick and lost my job about 4 years ago and had some very bad credit issues; thanks to this forum, I was able to clean up my credit and went from about a 490 to 675 in about 3 years. While I was cleaning up my credit, I was also saving -- and I was able to make a 80/20 mortgage in February (primarily because I purchased a home that was only 1.5x my income). I was able to save money because I ate a lot of mac & cheese. The seller paid most of the closing costs, so I was able to keep a few thousand in savings. The only items I bought post-closing (paid in cash) was a refrigerator, a washer, and a dryer. I have no credit card debt and have paid off my car loan. My mortgage is my only debt. By the way, I am a single mom with a son and 3 large dogs. I would love to buy some new furniture, but I'm putting that off and making do with what I have. Everything seems to be going great, and my new home is right on mass transit line, so I drive less than 20 miles per week. As I said before, it's as if the stars were aligned when I purchased the home. HOWEVER, IF I KNEW THEN WHAT I KNOW NOW, I would have WAITED to purchase a home. As perfect as my home is for me, I'm scared to death of what is to come in the next few months. I'm scared to death because I work for lawyers in corporate finance and securities. I can't give you any specifics because of client confidentiality, but what I'm about to tell you is the absolute truth: THERE IS GOING TO BE A MAJOR MARKET CRASH IN THE COMING MONTHS AND THEN WE WILL BE HEADED INTO A DEPRESSION. MILLIONS OF PEOPLE ARE GOING TO LOSE THEIR JOBS. The credit crisis is MUCH WORSE than anyone in the mainstream media is letting on. The Fed's bailout of Bear Stearns wasn't so much a bailout of Bear Stearns as it was propping up JPMorgan. (By allowing JPMorgan to purchase Bear Stearns at such low prices, JPMorgan was able to pump up its "book reserves" and prevent a run on the reserves of JPMorgan when the markets opened that Monday. It's not talked about in the mainstream media, but the Fed postponed the stock market crash for about 6 months. If you look at the Fed's current financial reserves, it no longer has the money to bail out other banks, which is why Citibank is laying off 70,000 bankers around the world this week. With no reserves to prop up other banks as it did JPMorgan, the only options available to the Fed are (a) allowing major banks to fail or (b) start printing cash which will inevitably lead to hyperinflation.) There's so much to tell, that I can't even begin. So, I would just advise you to look at all kinds of information for yourself. You don't have to go to conspiracy theory sites. Just go to mainstream media: The Financial Times of London or the Economist. What was so shocking to me when I revisited this site this week was the total lack of concern about the coming economic crisis -- even though the Royal Bank of Scotland and JPMorgan both issued dire warnings to their investors this past week to take their investments out of equity (stocks) and put their reserves in CASH. What does this tell you that two of the biggest banks in the world are telling their major clients to get out of the stock market? It means that they are expecting the stock market to crash and, just like in 1930-1933, CASH WILL BE KING and debt will be an albatross around your neck. If my posts offended, I am truly sorry, but I don't think anyone is doing anyone else a favor by sugarcoating the truth. And the time to sugarcoat the truth has long since passed. Yes, I bought my home 4 months ago and maybe I'll be ok and maybe I won't. I just would feel a lot safer right now if I had $30,000 in the bank rather than invested in real estate. And what offends ME is that there are people who still want a shortcut to financial security rather than taking the time to do the work necessary for true financial security. But of course none of this may matter in 6 months anyway. There may be no financial security for anyone. (And, by the way, to the poster who said that things were "picking up" in California -- those sales figures are the result of short sales and foreclosures where banks are desperate to get any amount for property. These sales are not a true indication of a "traditional" upturn in the economy.)

[Anonymous]

In Quoting an earlier post: I have learned in my realtively short life that it can only take one day, one moment in time, for God to decide a fate for us different than we had planned for ourselves.

That brought tears to my eyes and gave me some hope that I lost today! Just found out the job opportunity I hoped was going to change my life decided to go in another direction.


As far as your latest post "hopeful" you just showed me exactly what I was thinking...You WISH you had waited to buy your home so now you are trying to rain on everyone's parade. Armageddon is not around the corner so stop trying to scare everyone.

I would appreciate a MOD to put this post to bed.

Thanks!

Message Edited by 1111mel on 06-23-2008 09:20 PM

[Anonymous]

Hopeful....

I understand what you are saying, and even agree with some of it. The thing is for me and alot of others saving 30,000 or even 3,000 is something I just can't do. Aside from maybe a 401k for retirement I just do not and will not have enough to save. I am lucky if i have a dollar left over at the end of the month. As long as i am renting this is the way things will be. I know this because I have rented before and then owned. While I was owning my own home I was able to save. When my husband was out of work because of an injury that is what we lived on...what we had saved after we bought. Once we ran through that we lost our home. Renting is charging me much more than I can afford, double what it would be if I bought. As long as that is the situation I will never be able to save. The best bet for me is to get to the point where I can be accepted, use fha or my hubbys VA status to buy with zero down and then pray like crazy that everything works out. It is a shot I have to take in order to get lower more affordable monthly payments. It is not being irresponsible. zit is just a fact of life for us, we are a one income family of 5. Things are tough, as a single mom I am sure you understand that. My hubby does the best he can for us, and if I were healthier I would work, but right now that is not an option and it might never be. I think you just came across as a bit abrasive to those of us who live only within our means and make alot less than the average family. That does not mean we shouldn't be allowed to own. that is exactly why special programs were created...to help those who could not afford to buy otherwise.

[cliccmade]

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@Anonymous wrote:
As Suze Orman always says, money is an emotional issue, and we can really see this by the tone of the responses to my original post. Although not directed at any one person, several posters have taken my suggestion to WAIT quite literally. Here's the 411 on my home purchase in February: I got sick and lost my job about 4 years ago and had some very bad credit issues; thanks to this forum, I was able to clean up my credit and went from about a 490 to 675 in about 3 years. While I was cleaning up my credit, I was also saving -- and I was able to make a 80/20 mortgage in February (primarily because I purchased a home that was only 1.5x my income). I was able to save money because I ate a lot of mac & cheese. The seller paid most of the closing costs, so I was able to keep a few thousand in savings. The only items I bought post-closing (paid in cash) was a refrigerator, a washer, and a dryer. I have no credit card debt and have paid off my car loan. My mortgage is my only debt. By the way, I am a single mom with a son and 3 large dogs. I would love to buy some new furniture, but I'm putting that off and making do with what I have. Everything seems to be going great, and my new home is right on mass transit line, so I drive less than 20 miles per week. As I said before, it's as if the stars were aligned when I purchased the home. HOWEVER, IF I KNEW THEN WHAT I KNOW NOW, I would have WAITED to purchase a home. As perfect as my home is for me, I'm scared to death of what is to come in the next few months. I'm scared to death because I work for lawyers in corporate finance and securities. I can't give you any specifics because of client confidentiality, but what I'm about to tell you is the absolute truth: THERE IS GOING TO BE A MAJOR MARKET CRASH IN THE COMING MONTHS AND THEN WE WILL BE HEADED INTO A DEPRESSION. MILLIONS OF PEOPLE ARE GOING TO LOSE THEIR JOBS. The credit crisis is MUCH WORSE than anyone in the mainstream media is letting on. The Fed's bailout of Bear Stearns wasn't so much a bailout of Bear Stearns as it was propping up JPMorgan. (By allowing JPMorgan to purchase Bear Stearns at such low prices, JPMorgan was able to pump up its "book reserves" and prevent a run on the reserves of JPMorgan when the markets opened that Monday. It's not talked about in the mainstream media, but the Fed postponed the stock market crash for about 6 months. If you look at the Fed's current financial reserves, it no longer has the money to bail out other banks, which is why Citibank is laying off 70,000 bankers around the world this week. With no reserves to prop up other banks as it did JPMorgan, the only options available to the Fed are (a) allowing major banks to fail or (b) start printing cash which will inevitably lead to hyperinflation.) There's so much to tell, that I can't even begin. So, I would just advise you to look at all kinds of information for yourself. You don't have to go to conspiracy theory sites. Just go to mainstream media: The Financial Times of London or the Economist. What was so shocking to me when I revisited this site this week was the total lack of concern about the coming economic crisis -- even though the Royal Bank of Scotland and JPMorgan both issued dire warnings to their investors this past week to take their investments out of equity (stocks) and put their reserves in CASH. What does this tell you that two of the biggest banks in the world are telling their major clients to get out of the stock market? It means that they are expecting the stock market to crash and, just like in 1930-1933, CASH WILL BE KING and debt will be an albatross around your neck. If my posts offended, I am truly sorry, but I don't think anyone is doing anyone else a favor by sugarcoating the truth. And the time to sugarcoat the truth has long since passed. Yes, I bought my home 4 months ago and maybe I'll be ok and maybe I won't. I just would feel a lot safer right now if I had $30,000 in the bank rather than invested in real estate. And what offends ME is that there are people who still want a shortcut to financial security rather than taking the time to do the work necessary for true financial security. But of course none of this may matter in 6 months anyway. There may be no financial security for anyone. (And, by the way, to the poster who said that things were "picking up" in California -- those sales figures are the result of short sales and foreclosures where banks are desperate to get any amount for property. These sales are not a true indication of a "traditional" upturn in the economy.)

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I bet you bought as much water as you could when the year 2000 rolled around lol. If you want to believe the world is coming to an end be my guess.

[Anonymous]

Actually, I'm just trying to be helpful by giving some alternative advice to that given by the mortgage brokers and realtors who have a vested interest in selling real estate.

I've done my best to warn you of the coming dangers.  I've done my duty.  I've risked ridicule and outrageous personal attacks to try to bring some perspective to the discussion.

You know, they didn't listen to Noah either.  Good luck and good bye.