Rent or Buy in Socal?
We’re renting now in SFValley. Our rent is just under $2000/mo. for a 3B/2 1/2B townhouse. In our area, the house, condo, townhome prices are insane. Avg is $550, 000 and going up everyday, altho not by much. Everyone is telling us to buy for the obvious reasons, i.e., mortgage, tax savings, etc. We have no money for a down. If we bought, we’d be looking at close to $3000/mo mortgage. Not counting the expenses added on. We have no kids, and make a decent wage…so we’re getting killed in taxes.
What should we do? Rent til we retire in 2010? Or buy now and not save for retirement, hoping to rake in the equity for the next 3 years. We’ll be leaving the area then.
I would wait to buy for a couple years. In Southern California young couples, and immigrants who are inexperienced in mortgages are getting into bad loans. They are signing 100% financed loans that are interest only payments (they only pay the interest so the loan size never decreases) and it only stays interest only for 2 years at most. Others whom have owned their for a few years and just want a lower payment are signing option ARMs which actually add defered interest to the loan. In other words, the payment they make isn’t enough to cover even the interest generated. So they start with a 100K mtg refinance, and in 3 years owe 115K on their mtg.
Both these types of mortgages WILL fully index and amortize (the rates will increase to the maximum and they will be required to pay the full interest AND principal) after a time. Most of these events are going to occur in a few months, and so on for the next couple of years.
This will cause rampant forclosure because these people will not be able to afford their house payments at that time. The appreciation of homes in SoCal is not enough to refinance if they went 100% financing, and the option arms can actually go beyond the value of the home so there is no refinance option in most cases.
When forclosures happen, banks sell for extremely cheap. And since everything is worth what the buyer will pay for it, prices will drop for the surrounding area and the homes will be in a depreciating market. If there are many homes in the area selling for 50K, nobody can expect to sell their home for 500K.
This will cause prices to drop, and the housing market will stabalize for several years after these events until the whole process starts again.
Tax savings Home Based Business – Business Use Percentage BUP
|
|
Mortgage Advice & Tax Appeals $19.95 How to save on mortgage costs by planning ahead and getting tips from the experts. Learn how to use a free internet portal to ease the process of all mortgage loans. Added advice is provided for any home owner to take action on tax appeals on any owned property.This product is manufactured on demand using DVD-R recordable media. Amazon.com’s standard return policy will apply…. |
|
|
Calculated Industries 3415 Qualifier Plus IIIX Real Estate Finance Calculator $47.89 Gain instant access to P&I, PITI and FHA Payments, and complete buyer qualifying(view larger). Qualify home buyers right on the spot with the versatile, easy-to-use Qualifier Plus IIIX real estate finance calculator from Calculated Industries. Perfect for all real estate finance professionals, including agents, brokers, bankers, mortgage originators, title officers, trainers, and more. The… |
|
|
Dramatic Tax Savings Through Real Estate Transactions $28.23 No Synopsis Available |
|
|
Business Owners Tax Savings and Financing Deskbook 2003 $160.88 No Synopsis Available |
Tags: mortgage tax savings · mortgage tax savings calculator · mortgage tax savings calculator 2009 · mortgage tax savings calculator massachusetts · mortgage tax savings calculator yahoo · mortgage tax savings on interest calculator · mortgage tax savings softwareNo Comments
0 responses so far ↓
Like gas stations in rural Texas after 10 pm, comments are closed.