Economic stimulus plan

[Gig-O-Ram]

We'd like to see this house we like drop to about $160K or so. But we'll have to wait and see. We did learn something though - that the homeowner's insurance (which we thought was included in the deal, in the mortgage payment) is something we need to look into on our own. That kind've pissed us off. Another thing that pissed us off was the fact of the Mortgage Insurance! Something I have to pay for that is meant to solely protect the lender, because the Lending/Mortgage industry shot itself in the foot by giving loans to anyone and everyone, because they were greedy. I don't feel I should have to pay for their mistakes!

[Reloadron]

Originally Posted by Gig-O-Ram

We'd like to see this house we like drop to about $160K or so. But we'll have to wait and see. We did learn something though - that the homeowner's insurance (which we thought was included in the deal, in the mortgage payment) is something we need to look into on our own. That kind've pissed us off. Another thing that pissed us off was the fact of the Mortgage Insurance! Something I have to pay for that is meant to solely protect the lender, because the Lending/Mortgage industry shot itself in the foot by giving loans to anyone and everyone, because they were greedy. I don't feel I should have to pay for their mistakes!

Things have sure changed. Homeowners insurance was generally (but not always) figured into the note. The option to do it that way was there at least. Morgage insurance? Now that is a new one. My first house was a VA backed loan. So basically the lending institution has the borrower taking out insurance that the borrower will not default on the note. That sort of sucks.

Since we have owned this place for years, I know we use State Farm for our homeowner's insurance as well as our vehicle insurance. Merit there is a good rate.

The bitch I see with this entire subprime mess is the lending institutions, driven by greed, got their asses in a ringer. Now somehow this mess will become our problem.

The prime rate may drop again in the next day or so following the Fed meeting. Maybe another quarter to half percent. That could be a good thing for a qualified buyer. However, insurance cost are increasing so where you gain, then you lose.

Ron

[onebxr]

Its called PMI, Personal Mortgage Insurance. If a borrower doesnt have enough of a down payment you are forced to pay this. A good way to get out of it is getting 2 smaller loans for a house thus effectively cutting out the PMI. We did this through my financial advisor.
Your Welcome
-1

[Hitman]

Originally Posted by onebxr

Its called PMI, Personal Mortgage Insurance. If a borrower doesnt have enough of a down payment you are forced to pay this. A good way to get out of it is getting 2 smaller loans for a house thus effectively cutting out the PMI. We did this through my financial advisor.
Your Welcome
-1

Or, if you have it you can use the VA loan, and have no down payment.

[screwballl]

There is so much shit you have to jump through nowadays just to get a house that you better hope you finish the paperwork before someone else does. The house next door to us was being signed on by 3 different groups, each offer was accepted but whoever got the paperwork through first would get it.... ends up the family that is there now offered a bit extra to the previous owner so they help off an extra day for them... and I am glad they did, they are a cool family.

[PTRMAN]

Originally Posted by Jokerswild

No it's all Bushes fault. He singlehandedly brought the United States to it's knees.

JW - I hope that was tongue-in-cheek, over the top sarcasem because it is just wrong.

Ron - You're right about Pelosi - she is an idiot. Most of these congressmen (and women) seem to have no capacity for rational thought about economics. Libs tend to be worse than conservatives because their prime motivator is their emotion, rather than their intellect. Of course there are plenty of conservatives who abandon their principals as well to jump on the "bring the pork home" bandwagon, as we've seen over the past four years.

Porn - it's always here and has a steady, high demand.

[screwballl]

Why does a slight tax increase cost you $2000.00

and a substantial tax cut saves you $300.00?

[PTRMAN]

Ah, the essence of government and taxation!

Don't you just love it when they refer to a tax cut as a loss of government funds?

And how when they're trying to balance the budget it never occurs to them to cut
spending? No, they've always got to find some other "revenue source" to "offset" the tax cut.

[Gig-O-Ram]

Originally Posted by Reloadron

Morgage insurance? Now that is a new one. My first house was a VA backed loan. So basically the lending institution has the borrower taking out insurance that the borrower will not default on the note. That sort of sucks.

The bitch I see with this entire subprime mess is the lending institutions, driven by greed, got their asses in a ringer. Now somehow this mess will become our problem.

Ron

That's what I'm saying...I'm being told by a lender that because they all fucked up by getting greedy, that I have to pay them insurance to make sure I don't default. This to me is the height of stupidity. They should never have gotten themselves into the mess in the first place. I thought the idea was to make sure in advance that someone could repay a loan. How is anything helped by giving a loan to someone who maybe can't make good on it? Hence the subprime crisis. And now we, the potential homebuyers, have to take it on the chin for their greed. You know, the government has legislation for every other damned thing - they need to make legislation that makes forcing PMI on people a federal offense or something...

Check this out - We asked a lender POINT BLANK on the phone, "What will our TOTAL payment be? Insurance...everything." He told us something like $1200 or $1300/month. We were good with that. When we met him at his office, the guy drops this PMI bomb on us, and suddenly, our payment is now in the neighborhood of $1600/month. It's all crooked if you ask me.

[Reloadron]

Originally Posted by Gig-O-Ram

That's what I'm saying...I'm being told by a lender that because they all fucked up by getting greedy, that I have to pay them insurance to make sure I don't default. This to me is the height of stupidity. They should never have gotten themselves into the mess in the first place. I thought the idea was to make sure in advance that someone could repay a loan. How is anything helped by giving a loan to someone who maybe can't make good on it? Hence the subprime crisis. And now we, the potential homebuyers, have to take it on the chin for their greed. You know, the government has legislation for every other damned thing - they need to make legislation that makes forcing PMI on people a federal offense or something...

Check this out - We asked a lender POINT BLANK on the phone, "What will our TOTAL payment be? Insurance...everything." He told us something like $1200 or $1300/month. We were good with that. When we met him at his office, the guy drops this PMI bomb on us, and suddenly, our payment is now in the neighborhood of $1600/month. It's all crooked if you ask me.

Now I may be way, way off base on some of this as it has been a long, long time since I looked to finance a house.

Generally when looking at a house you could pretty much figure on a 30 year note (mine were 20 year long ago) that your payments would be about 1% of the amount financed. Meaning if you financed 100K you were looking at about a grand a month as a payment and that was inclusive of property taxes. The mortgage company did it all.

There was also a basic rule or two, Generally they looked for 20% down unless you went VA or something along those lines. The real clincher though was the loan payments could not exceed 25% of your monthly disposable income. Eventually that seemed to crawl up to about 50%.

All loans were pretty much a fixed rate.

Now we get into all this new stuff. I personally know people that were running 25K in maxed out credit card debt who could finance a 150K house with nothing down. These are people with an annual income of about 32K. I could not believe they could get financing, but they did. Then within 6 months they are in way, way over their heads.

The stupid theory on a sub prime note was you buy at a good rate and then after a few years you build good solid credit. Your home is also building equity. Then based on the equity you refinance at a fixed rate before the loan payments go up. Almost looks good on paper but in reality is as worthless an idea as the paper it is conceived on.

Years ago you went to a damn bank and took out a home loan. Generally the loan remained with that bank. Today the damn notes are bought and sold almost daily.

The real bitch of all this is apparent for the poor souls looking to buy who have their shit together. They are caught up in this mess they didn't create. Suddenly, despite the Fed dropping the prime rate (another 1/2 percent today), they are looking at almost impossible loans to get. Now enter the mortgage insurance burden laid on who? The buyer.

Personally if I were looking to buy I would shop around. I would likely wait maybe 6 to 8 months just for the dust to settle.

Ron