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Started By
Message
re: Mortgage Rates Killed Me
Posted on 5/12/23 at 8:41 am to Bow08tie
Posted on 5/12/23 at 8:41 am to Bow08tie
quote:
Why does the original comment about a once upon a time interest rate trigger one so?
Because it adds no context or value. 18% back then is not the same as 18% now so wtf is the point of posting it with no other information?
1
Posted on 5/12/23 at 9:04 am to MrJimBeam
“Adds no context or value” that’s your opinion and I can respect that. OP ask for input on whether 4s are a good rate. Comparable to 18% yes it is. Apparently, you can’t respect that..why?
Posted on 5/12/23 at 9:08 am to Bow08tie
The other poster that responded to you thoroughly explained why. I don’t need to rehash as it’s pretty simple.
Posted on 5/12/23 at 9:40 am to GAFF
quote:
My fear tho is that rates don’t subside and I’m stuck with the rate 5+ years scraping by. I can’t do it.
You don’t expect to make more money 5 years from now?
You’re 36. Your highest earning years should be ahead of you.
Posted on 5/12/23 at 9:41 am to elprez00
A nice house in a nice neighborhood was well above 36. Of course location and other things played into the values.
Wages then vs. now were exceptionally lower.
More normal now for there to be two high incomes in a single household.
Keeping up with the Jones, spending above your means and willing to borrow money to pay crazy higher prices cause gotta have it are big factors for where we are.
I’m not going to name call such as you’ve exhibited. Prefer to operate on an adult level
Wages then vs. now were exceptionally lower.
More normal now for there to be two high incomes in a single household.
Keeping up with the Jones, spending above your means and willing to borrow money to pay crazy higher prices cause gotta have it are big factors for where we are.
I’m not going to name call such as you’ve exhibited. Prefer to operate on an adult level
Posted on 5/12/23 at 9:57 am to JohnnyKilroy
quote:
You don’t expect to make more money 5 years from now?
You’re 36. Your highest earning years should be ahead of you.
Should never buy something you currently cant afford because you might make more money in the near future.
The idea should be buy something you can feel comfortable with now and the more money you might make in the future is just margin you build up in your life.
Cant just count on making a lot more money 3-5 years from now, if he cant afford it now, thats all the matters. Living on the edge is a terrible idea for any length of time you're committing yourself to.
Maybe he makes 25% more 3 years from now and the mortgage wouldnt be a big deal. Maybe he only makes 5% more 3 years from now and the mortgage would be a big deal still and they have had to live 3 years on edge.
This is like when my wife and I bought our first house back in 2017 when we got pre-qualified they said we would be good up to like $640k house. We couldnt imagine paying that kind of mortgage and having ANY margin in our lives for anything else. We ended up buying a $275k place because thats what we felt like we could afford with margin in our life at that time and now 6 years later we ARE making substantially more and have just built up a huge amount of margin now basically.
This post was edited on 5/12/23 at 10:05 am
Posted on 5/12/23 at 10:00 am to GAFF
Feel your pain GAFF. We saved, bought the land, drew up the plans, and what we thought would be one price at around 3% when we started turned into almost $150k more at 6.5%. Couldn't do it, and not sure how you can plan for that. Costs plus rates got us. Just sitting on the land for the time being.
Posted on 5/12/23 at 10:13 am to GAFF
Not to sidetrack, but people should be careful with the “dream home” obsession and letting it take over their lives. I’ve seen more than one couple divorce after finishing their dream home.
In other words, don’t sweat it so much, and don’t get house poor.
In other words, don’t sweat it so much, and don’t get house poor.
Posted on 5/12/23 at 10:13 am to sonicbaw350
quote:
one price at around 3%
quote:
not sure how you can plan for that.
You could start by not assuming that basically literally the lowest mortgage rates ever on record would persist indefinitely.
Costs is harder to predict.
Posted on 5/12/23 at 10:17 am to Big Scrub TX
But even using the average rate before the bottom fell out is reasonable. 4.5 and 5% is sustainable at the old prices. Everything now is sky high.
Posted on 5/12/23 at 10:24 am to thunderbird1100
quote:
Should never buy something you currently cant afford because you might make more money in the near future.
I don’t disagree but his posts make it out that he can afford it now but is scared he won’t be able to refinance 5 years from now.
Either way it sounds like the property has already skyrocketed in value so imo pretty low risk to stretch.
Everyone’s risk tolerance is different but me personally I’d rather stretch (within reason) and bank on the high likelihood of making more money in the future vs buying smaller and wanting/needing to upsize within a few years and eat 10s of thousands in transaction costs and moving expenses etc.
By stretch I mean buying at the top of the range you can afford. I certainly don’t mean that I or anyone should sign up for a mortgage payment you straight up cannot afford. I more mean I would trade being house poor for a year or two in exchange for the stability of not “having” to move if my family expanded or something like that.
This post was edited on 5/12/23 at 12:13 pm
Posted on 5/12/23 at 10:33 am to TomRollTideRitter
quote:
There hasn’t been a time in American history when rates this high coincided with home prices and building costs this high. I’m sure the OP would have been fine with a higher rate if the cost of the house hadn’t gone up by 30+% in a year or two.
Rates are not even high historically speaking.
Posted on 5/12/23 at 10:41 am to GAFF
We just closed on our house a month and a half ago.
Interest rate was 5.99
Knowing that literally just 1.5 years ago our same home would have been at least 100k cheaper and half the interest rate is literally something I think about everyday. I just hope interest rates drop over the next 5 years and our home doesn't lose value.
Interest rate was 5.99
Knowing that literally just 1.5 years ago our same home would have been at least 100k cheaper and half the interest rate is literally something I think about everyday. I just hope interest rates drop over the next 5 years and our home doesn't lose value.
Posted on 5/12/23 at 11:55 am to Sterling Archer
quote:Presumably you mean 100K less interest payments over the life of the mortgage and not that the house itself was worth less back then?
would have been at least 100k cheaper and half the interest rate
Posted on 5/12/23 at 12:09 pm to Big Scrub TX
No I think he means back in 2021 the house would have been valued at 100k less than his purchase price and he could have gotten a ~3% rate.
Posted on 5/12/23 at 1:05 pm to JohnnyKilroy
quote:That seems odd to me - 2021 was the height of the crazy covid bubble...for real estate and many other asset classes.
No I think he means back in 2021 the house would have been valued at 100k less than his purchase price and he could have gotten a ~3% rate.
Posted on 5/12/23 at 1:08 pm to GAFF
quote:
build a forever home
quote:
I’m 36
First mistake
Posted on 5/12/23 at 1:12 pm to GAFF
quote:
No way we can now afford to build the house
Do you have money for a down payment ?
Lenders will let you buy down the rate if you have enough down.
Posted on 5/12/23 at 1:15 pm to GAFF
You kids whining about 3%. I had to deal with 6% and the old farts were telling me how fortunate I was. I'm telling you the same.
Posted on 5/12/23 at 1:57 pm to TejasHorn
quote:
Not to sidetrack, but people should be careful with the “dream home” obsession and letting it take over their lives. I’ve seen more than one couple divorce after finishing their dream home.
In other words, don’t sweat it so much, and don’t get house poor.
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