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mcstealth
12-17-2005, 09:06 AM
Hey everybody. A quick post about INTEREST RATES and mortgages. Most likely, rates will continue to rise untill mid 2006 which they then will remain stagnent for a while. For right now (12/17/2005) a good home interest rate is between 6.25% and 6.75%. I give this broad a spread because there is/are an incredible array of loan products available and the rates for each adjust appopiately. If you are thinking about buying a home, do it when it feels right. Don't wait for a low interest rate. If you get a good low rate when you buy your home, great, if the rates go lower two years after you buy your home, consider refinancing.

Call with any questions.

David
281-812-2534

mcstealth
12-17-2005, 09:06 AM
Hey everybody. A quick post about INTEREST RATES and mortgages. Most likely, rates will continue to rise untill mid 2006 which they then will remain stagnent for a while. For right now (12/17/2005) a good home interest rate is between 6.25% and 6.75%. I give this broad a spread because there is/are an incredible array of loan products available and the rates for each adjust appopiately. If you are thinking about buying a home, do it when it feels right. Don't wait for a low interest rate. If you get a good low rate when you buy your home, great, if the rates go lower two years after you buy your home, consider refinancing.

Call with any questions.

David
281-812-2534

Justin Molet
12-18-2005, 07:19 PM
thanks for the heads up. looks like i'll be taking the plunge at the worst time possible (figures).

Justin Molet
12-18-2005, 07:19 PM
thanks for the heads up. looks like i'll be taking the plunge at the worst time possible (figures).

Joseph Browning
12-18-2005, 10:48 PM
Not necessarily. Market studies have shown there is a 1-1 inversed correlation between APR and housing prices. When mortgages APRs are "high" prices come down.

Principle Loan Balance: $250,000
Annual Interest Rate: 6.25%
Amortization Length: 30 years

Monthly Payment: 1,539.29
Total Interest: 304,145.48
Average Interest each Month: 844.85
Yearly Payment Schedule

Principle Loan Balance: $250,000
Annual Interest Rate: 5.25%
Amortization Length: 30 years


Monthly Payment: 1,380.51
Total Interest: 246,983.33
Average Interest each Month: 686.06

Basically if you keep the house for more than 5 years, you only have to get a $10,000 better deal even at a 1% higher APR. Mortgage rates basically don't matter, unless you pay more than market rate. And I just betcha that Mr. Ferris would be more than happy to accomodate you in any way possible. If you take advantage of sellers perception that there are less buyers in the marketplace because of the higher interets rate you can probably get a far better deal. And never forget that buying a house to live in is a LIABILITY not an asset. That's rule #1! Good luck!

Joseph Browning
12-18-2005, 10:48 PM
Not necessarily. Market studies have shown there is a 1-1 inversed correlation between APR and housing prices. When mortgages APRs are "high" prices come down.

Principle Loan Balance: $250,000
Annual Interest Rate: 6.25%
Amortization Length: 30 years

Monthly Payment: 1,539.29
Total Interest: 304,145.48
Average Interest each Month: 844.85
Yearly Payment Schedule

Principle Loan Balance: $250,000
Annual Interest Rate: 5.25%
Amortization Length: 30 years


Monthly Payment: 1,380.51
Total Interest: 246,983.33
Average Interest each Month: 686.06

Basically if you keep the house for more than 5 years, you only have to get a $10,000 better deal even at a 1% higher APR. Mortgage rates basically don't matter, unless you pay more than market rate. And I just betcha that Mr. Ferris would be more than happy to accomodate you in any way possible. If you take advantage of sellers perception that there are less buyers in the marketplace because of the higher interets rate you can probably get a far better deal. And never forget that buying a house to live in is a LIABILITY not an asset. That's rule #1! Good luck!

Igal
12-19-2005, 07:25 PM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Originally posted by Joe Browning:
And never forget that buying a house to live in is a LIABILITY not an asset. That's rule #1! Good luck! </div></div>thats from Rich Dad Poor Dad - a good read

Igal
12-19-2005, 07:25 PM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Originally posted by Joe Browning:
And never forget that buying a house to live in is a LIABILITY not an asset. That's rule #1! Good luck! </div></div>thats from Rich Dad Poor Dad - a good read

mcstealth
12-19-2005, 10:49 PM
A home buying tip for first time home buyers.

As I said before, there are a dizzing array of mortgage products for profesionals to use. Not all of them need proof of rent payments to meet guidlines but most do. If you pay your rent to a friend in cash, live at home and pay for groceries, pay cash with no reciepts to a landlord....STOP!!! NOW!!! At a minimum, use a money order and save every reciept. Same way with utilities, use a money order. Live at home and don't pay rent? Give your parents a money order every month and save the reciept. I don't care if they cash the damn thing and give you the money back. Manufacture a paper trail! This is a key piece of the puzzle. Once a month on time every time. Cell phone bill, car insurance payments, day care, light bill, water bill, gas bill, use a money order. However, a personal checking account is preferable. Get the kind of statements that image your hand written checks as a part of the statement. Keep your statments, and now the mortgage guy has a paper trail to use to your home buying benefit. Paper trail of 'one time, every time' payments. Good luck.

David
'The Mortgage Guy'
281-748-4483

mcstealth
12-19-2005, 10:49 PM
A home buying tip for first time home buyers.

As I said before, there are a dizzing array of mortgage products for profesionals to use. Not all of them need proof of rent payments to meet guidlines but most do. If you pay your rent to a friend in cash, live at home and pay for groceries, pay cash with no reciepts to a landlord....STOP!!! NOW!!! At a minimum, use a money order and save every reciept. Same way with utilities, use a money order. Live at home and don't pay rent? Give your parents a money order every month and save the reciept. I don't care if they cash the damn thing and give you the money back. Manufacture a paper trail! This is a key piece of the puzzle. Once a month on time every time. Cell phone bill, car insurance payments, day care, light bill, water bill, gas bill, use a money order. However, a personal checking account is preferable. Get the kind of statements that image your hand written checks as a part of the statement. Keep your statments, and now the mortgage guy has a paper trail to use to your home buying benefit. Paper trail of 'one time, every time' payments. Good luck.

David
'The Mortgage Guy'
281-748-4483

Joseph Browning
12-20-2005, 10:09 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Originally posted by Igal Askeroglu #670:
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Originally posted by Joe Browning:
And never forget that buying a house to live in is a LIABILITY not an asset. That's rule #1! Good luck! </div></div>thats from Rich Dad Poor Dad - a good read </div></div>YES! I knew I *read* that somewhere and it has stuck with me for many years, and even the logic behind it has always helped me- but I forgot where I learned it! Thank you for knowing that, and thanks for pointing that out. I'm going to go read that book again. :-)

Joseph Browning
12-20-2005, 10:09 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Originally posted by Igal Askeroglu #670:
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Originally posted by Joe Browning:
And never forget that buying a house to live in is a LIABILITY not an asset. That's rule #1! Good luck! </div></div>thats from Rich Dad Poor Dad - a good read </div></div>YES! I knew I *read* that somewhere and it has stuck with me for many years, and even the logic behind it has always helped me- but I forgot where I learned it! Thank you for knowing that, and thanks for pointing that out. I'm going to go read that book again. :-)

Igal
12-20-2005, 02:03 PM
that book puts it real simple...

if it produces cash flow, its an asset
if it doesnt, its a liability

your residence will never produce cash flow...
now a rent house will... thats the big point

dont fool yourself into thinking your residence is an investment... unless you were in phoenix for the past 10 years...

Igal
12-20-2005, 02:03 PM
that book puts it real simple...

if it produces cash flow, its an asset
if it doesnt, its a liability

your residence will never produce cash flow...
now a rent house will... thats the big point

dont fool yourself into thinking your residence is an investment... unless you were in phoenix for the past 10 years...

rusty_27
12-30-2005, 12:10 AM
Mr Ferris is it worth buying points at this present time? I am looking at a house but te rate at present is 6.50.I plan to make this my retirement home.

rusty_27
12-30-2005, 12:10 AM
Mr Ferris is it worth buying points at this present time? I am looking at a house but te rate at present is 6.50.I plan to make this my retirement home.

rusty_27
12-30-2005, 12:11 AM
what days are good to call with questions?

rusty_27
12-30-2005, 12:11 AM
what days are good to call with questions?

mcstealth
12-30-2005, 11:25 AM
Call anytime

281-812-2534
281-748-4483


Buying points is almost never a consideration in todays market. "Never say Never" does apply though. If someone is trying to sell you points, I would make sure you have a complete understanding what "buy down" points are as opposed to closing cost buy down points. Where are the points actually going to and why?

If you are building a custom home, be aware of your 'dollar per square foot' calculations and keep them in check. Calculate two numbers. One which is a 'total under roof'sum, and the other which is 'heated and cooled' rooms only. Good numbers to keep in mind when comparing your new house to those that are existing and sold recently (comparable sales. It helps with real world value for your area. If money is no object /ubbthreads/images/%%GRAEMLIN_URL%%/smile.gif /ubbthreads/images/%%GRAEMLIN_URL%%/smile.gif /ubbthreads/images/%%GRAEMLIN_URL%%/smile.gif

Thanks. Hope this is as clear as mud.

David

mcstealth
12-30-2005, 11:25 AM
Call anytime

281-812-2534
281-748-4483


Buying points is almost never a consideration in todays market. "Never say Never" does apply though. If someone is trying to sell you points, I would make sure you have a complete understanding what "buy down" points are as opposed to closing cost buy down points. Where are the points actually going to and why?

If you are building a custom home, be aware of your 'dollar per square foot' calculations and keep them in check. Calculate two numbers. One which is a 'total under roof'sum, and the other which is 'heated and cooled' rooms only. Good numbers to keep in mind when comparing your new house to those that are existing and sold recently (comparable sales. It helps with real world value for your area. If money is no object /ubbthreads/images/%%GRAEMLIN_URL%%/smile.gif /ubbthreads/images/%%GRAEMLIN_URL%%/smile.gif /ubbthreads/images/%%GRAEMLIN_URL%%/smile.gif

Thanks. Hope this is as clear as mud.

David

rusty_27
12-30-2005, 11:20 PM
can I call you Saturday?It is a custom home with 82.00 per sq foot.The house is 3100sq ft. in the country.

rusty_27
12-30-2005, 11:20 PM
can I call you Saturday?It is a custom home with 82.00 per sq foot.The house is 3100sq ft. in the country.

mcstealth
01-03-2006, 10:53 AM
Sorry. Missed you in the Holiday uproar. /ubbthreads/images/%%GRAEMLIN_URL%%/smile.gif

$82.00 per square is very respectable. I will make the assumption that you are not going crazy with the crown moulding, rare granite counter tops and three bay garage.

Out in the country is a relevant statement. How many acres? Other homes in the area?

Ask a Real Estate friend to 'run some comps' on your area and square feet of your build. See what they come up with.

Call any time

David
281-812-2534

mcstealth
01-03-2006, 10:53 AM
Sorry. Missed you in the Holiday uproar. /ubbthreads/images/%%GRAEMLIN_URL%%/smile.gif

$82.00 per square is very respectable. I will make the assumption that you are not going crazy with the crown moulding, rare granite counter tops and three bay garage.

Out in the country is a relevant statement. How many acres? Other homes in the area?

Ask a Real Estate friend to 'run some comps' on your area and square feet of your build. See what they come up with.

Call any time

David
281-812-2534

Aaron Hlavaty
01-03-2006, 09:12 PM
I built my home on 12 beautiful wooded acres for $60 a square ft.(not including the land) with 1800 sq.ft. My wife was the G.C. and we saved a ton of money doing it this way. Its not rocket science, it is however a pain in the arse. but worth it.

Aaron Hlavaty
01-03-2006, 09:12 PM
I built my home on 12 beautiful wooded acres for $60 a square ft.(not including the land) with 1800 sq.ft. My wife was the G.C. and we saved a ton of money doing it this way. Its not rocket science, it is however a pain in the arse. but worth it.

mcstealth
01-04-2006, 02:24 PM
Good going Aaron. Got to be a liscensed contractor with the State of Texas now. Can't do the brother, wife thing anymore..

David
281-812-2534

mcstealth
01-04-2006, 02:24 PM
Good going Aaron. Got to be a liscensed contractor with the State of Texas now. Can't do the brother, wife thing anymore..

David
281-812-2534

burner42
01-11-2006, 02:23 AM
David,
In a interest only loan, you pay the interest up front right? Then do you begin paying on the principle? I have been looking at this as an option to finance my new home. The rates are super low, I like the idea of having an option on my payment size. If times are tough pay interest only, when times are good add a little torwards the principle. But if you pay the stated payment every month no more, do you ever pay on the principle?
Thanks,
Myles

burner42
01-11-2006, 02:23 AM
David,
In a interest only loan, you pay the interest up front right? Then do you begin paying on the principle? I have been looking at this as an option to finance my new home. The rates are super low, I like the idea of having an option on my payment size. If times are tough pay interest only, when times are good add a little torwards the principle. But if you pay the stated payment every month no more, do you ever pay on the principle?
Thanks,
Myles

mcstealth
01-13-2006, 10:33 AM
"David,
In a interest only loan, you pay the interest up front right? Then do you begin paying on the principle?"

Good Question Myles.

Understand Myles that, in a mortgage loan, you are ALWAYS paying the interest up front no matter the loan scenario. Your down payment is considered principal reduction of course but that determines how much you are borrowing.

First of all you have to be very clear of the loan being described and or sold to you, the consumer. 'Interest only' can be applied in many different ways. The most common way is when the term of the loan is 30 years (360 months. The first 120 months (72 months are also common) of the loan is allowed to be paid 'interest only' with no principle involved. At the 121st month, P&I will apply and the full principle will begin its amoritization schedule, ten years later.


" The rates are super low, I like the idea of having an option on my payment size."

This statement gives me reason to believe you are researching a loan called an 'option arm'. If this is true, an option arm is a flexible tool with its own issues and challanges. You need to be very cautious with these loans as they are based off of different 'indices'. Some of these are very very unstable. LIBOR is one you need to avoid. Period! MTA or COSI are okay for the most part. Yor mortgage person will/should now which indices the loan is written on. You will have four options of payment with these loans. Unless written differently in the specific loan, only ONE of those four options of payment is fixed and non adjustable for a given amount of time. The other three will rise and fall with the PRIME RATE. The payments are by the way; deffered interest, interest only, 15yr fixed and 30yr fixed. The deffered interest is also called "negative amoritization"


"But if you pay the stated payment every month no more, do you ever pay on the principle?"

Simple answer is no. You are not placing equity into your home by making interest only payments. Only down payment and property appreciation to help. Joe and Igal will jump all over that /ubbthreads/images/%%GRAEMLIN_URL%%/laugh.gif /ubbthreads/images/%%GRAEMLIN_URL%%/laugh.gif

I could go on and on. Please make sure your mortgage guy explains everything to your satisfaction or call me anytime.

David
281-812-2534

mcstealth
01-13-2006, 10:33 AM
"David,
In a interest only loan, you pay the interest up front right? Then do you begin paying on the principle?"

Good Question Myles.

Understand Myles that, in a mortgage loan, you are ALWAYS paying the interest up front no matter the loan scenario. Your down payment is considered principal reduction of course but that determines how much you are borrowing.

First of all you have to be very clear of the loan being described and or sold to you, the consumer. 'Interest only' can be applied in many different ways. The most common way is when the term of the loan is 30 years (360 months. The first 120 months (72 months are also common) of the loan is allowed to be paid 'interest only' with no principle involved. At the 121st month, P&I will apply and the full principle will begin its amoritization schedule, ten years later.


" The rates are super low, I like the idea of having an option on my payment size."

This statement gives me reason to believe you are researching a loan called an 'option arm'. If this is true, an option arm is a flexible tool with its own issues and challanges. You need to be very cautious with these loans as they are based off of different 'indices'. Some of these are very very unstable. LIBOR is one you need to avoid. Period! MTA or COSI are okay for the most part. Yor mortgage person will/should now which indices the loan is written on. You will have four options of payment with these loans. Unless written differently in the specific loan, only ONE of those four options of payment is fixed and non adjustable for a given amount of time. The other three will rise and fall with the PRIME RATE. The payments are by the way; deffered interest, interest only, 15yr fixed and 30yr fixed. The deffered interest is also called "negative amoritization"


"But if you pay the stated payment every month no more, do you ever pay on the principle?"

Simple answer is no. You are not placing equity into your home by making interest only payments. Only down payment and property appreciation to help. Joe and Igal will jump all over that /ubbthreads/images/%%GRAEMLIN_URL%%/laugh.gif /ubbthreads/images/%%GRAEMLIN_URL%%/laugh.gif

I could go on and on. Please make sure your mortgage guy explains everything to your satisfaction or call me anytime.

David
281-812-2534

Igal
01-13-2006, 11:01 AM
David, lets make sure we meet at the track this season.

You should try and make it next friday to the indoor kart endurance race.

Igal
01-13-2006, 11:01 AM
David, lets make sure we meet at the track this season.

You should try and make it next friday to the indoor kart endurance race.

mcstealth
01-13-2006, 11:07 AM
I'm going to try to get there Friday. It sounds like fun. I don't need to bring my boxing gloves do I? /ubbthreads/images/%%GRAEMLIN_URL%%/smile.gif /ubbthreads/images/%%GRAEMLIN_URL%%/smile.gif

David

mcstealth
01-13-2006, 11:07 AM
I'm going to try to get there Friday. It sounds like fun. I don't need to bring my boxing gloves do I? /ubbthreads/images/%%GRAEMLIN_URL%%/smile.gif /ubbthreads/images/%%GRAEMLIN_URL%%/smile.gif

David