The high cost of jumbo mortgages

Full story: Newsday

When Allan Press started looking for a new home in the spring, he was approved for a $561,000 mortgage at a 6 percent interest rate.
Comments
41 - 57 of 57 Comments Last updated Jan 15, 2008
First Prev
of 3
Next Last
concerned

Pomona, NY

|
Report Abuse
|
Judge it!
|
#43
Jan 7, 2008
 
Points are nothing but a legal way to rob people.
Roger

Houston, TX

|
Report Abuse
|
Judge it!
|
#44
Jan 7, 2008
 
I totally agree wrote:
<quoted text>
I just got back from my parentís house and we were talking about this very same subject. Here .. I'm college educated .. making $100K and I cannot even afford to own a home (on LI), meanwhile, my father was a laborer, owns a nice house on LI (which has been paid off .. many moons ago), had a nice boat, a nice car, family trips every year .. supporting a wife and three kids .. all on a laborer's salary !!
My parents always advocated education so my life would be better than theirs .. well .. I took advantage of education yet my quality of life is no where near my parents then (when they were my age) and now !!
A real kick in the NUTS .. isn't it ??!!
Great post! My dad too worked a modest job. My mom stayed home and took care of my brother and I. We had a house in Amityville right off the bay, had a boat, went to the beach a couple of times per week, had barbeques almost every weekend, went on vacations - the works.

I also checked what the taxes were back then. No wonder we were able to live better on a fraction of the salaries we make now. Somewhere along the line, the teachers unions and special interest groups got their hands on our wallets. The rest is history.
GlenHeadFred

Bronx, NY

|
Report Abuse
|
Judge it!
|
#45
Jan 7, 2008
 
Hey, big spenders! I just returned from the Outback Bowl in Tampa, FL and guess what? The housing market is in the dumper! Guess what else? The employment market is strong at the top/higher wage end! Whay are you paying $500,000 for a house that sold for less than half that amount only 5 years ago? Use your brain and relocate!
The scary thing

AOL

|
Report Abuse
|
Judge it!
|
#46
Jan 7, 2008
 
Roger wrote:
<quoted text>
Great post! My dad too worked a modest job. My mom stayed home and took care of my brother and I. We had a house in Amityville right off the bay, had a boat, went to the beach a couple of times per week, had barbeques almost every weekend, went on vacations - the works.
I also checked what the taxes were back then. No wonder we were able to live better on a fraction of the salaries we make now. Somewhere along the line, the teachers unions and special interest groups got their hands on our wallets. The rest is history.
is Dude .. how does this bode well going into the FUTURE !!??

When you think about .. it DOES NOT LOOK GOOD for LI or this country.

Let's face it .. it costs 2-3 times more in education to make a substandard living compared to our parents !!

Not to disrespect our parents .. but D-A-M-N IT .. it is the truth !!
Sean

United States

|
Report Abuse
|
Judge it!
|
#48
Jan 7, 2008
 
Yes, it is possible to get a lower rate of 6.625% if you put down what was a normal down payment until eight years ago or so. But you'd have to be OUT OF YOUR MIND to buy a house right now. The disparity between rents and home prices is the widest its been in US history. You can rent the same house that you can buy for half the mortgage payment, taxes and interest.

The downside risk to housing right now cannot be measured because there is too much hidden from the data being published right now. Nobody knows how many lied on stated income loans, how many appraisers lied about property values for cash out refis. It's completely impossible to know how far down this will go.

I do know that it is NOT a subprime problem. I've talked with people with credit scores above 700 making more than $100K a year (individual, not family) who are a month or two away from walking away.

It's not only impossible to know how far prices are going to drop, it's impossible to know where new foreclosures are going to appear and where neighborhoods are going to change for the worse. You could buy a place tomorrow and two months from now have four foreclosures within two blocks of you. Will they end up boarded up? Will they invite crime? Foreclosures are appearing in the million dollar range now and everybody stretched and took neg ams, I/Os and other risky loans to buy what they couldn't afford.

Buying now is so incredibly risky that I can't imagine why someone would do it. What do you think the risk is that prices are going to rise a lot? Okay. And now, what do you think the risk is that prices are going to fall a lot? If you believe the risk that prices are going to fall is bigger than the risk that prices are going to rise, then you would be OUT OF YOUR MIND to buy a house right now because the amounts of money are so big compared to real, after tax income at almost every income bracket (once you get to probably $2 or $3 million a year, this disparity drops).

"But I'm planning on living there a LONG TIME, so I don't care!" Do you care that you might be paying an additional $1,000 a month or more for a LONG TIME? If you buy a place for $750K and someone buys an identical tract house next door to yours for $500K in late 2009 and for the same down payment pays $1,250 a month less than you for a DECADE or TWO, is that going to be "no problem"?

The risk is intense. I suggest anyone who is going to get in now understand that it's like gambling against the odds, but without the big payoff. You have bad odds of prices going up and if they do go up, they aren't going to go up by much.

Please be careful. We already have enough foreclosures. There aren't enough people to process them already.
Winston Buttafuoco

United States

|
Report Abuse
|
Judge it!
|
#49
Jan 7, 2008
 
J U M B O
Sean

United States

|
Report Abuse
|
Judge it!
|
#50
Jan 7, 2008
 
Also, 70% of Americans believe that home prices are falling and will continue to fall. 85% of Americans believe that home prices will not fall where they live and 55% of Americans believe their home's price rose in the past 12 months.

I have nothing against Long Island. I spent a vacation there once in a beautiful house in the the Hamptons and it was very pretty and the restaurants were nice, but that does not matter at all.

The statistics above are an example of how these things play out. Everybody doesn't think it's going to happen. Then they think it's going to happen, but to everybody but them. Then, when it happens to them, they get it.

Everybody I've talked to in Los Angeles, San Francisco, Manhattan, Houston, really everywhere has told me, "Well, this downturn is probably going to be very bad, but it's poor people who should never have bought a house in the first place. Prices are not going to drop here because it is a highly desirable area."

What stunned me was that no matter where the person lived, they thought it was a "highly desirable area." In fact, they used the same term. Not, a nice place, a great, fun place, an expensive place, but "a highly desirable area." And that got me to thinking that real estate agents probably put that phrase in their heads.

The point is that no place is so desirable that a person with a brain and a calculator will over pay for real estate there. If your highly desirable area has sustained a 100% run up in prices over the past four years and it was highly desirable four years ago, you may expect prices to drop 50%.

Now I know the next thing people are going to do is say, "but my highly desirable area has become MORE desirable - I mean now it is really, very highly desirable and not longer merely highly desirable."

The writing is on the wall. This is the time to stay away from real estate and to start amassing wealth. That can be accomplished by saving 20% to 40% of gross income and using it to buy a combination of defensive stocks, bonds and even small bets on puts on carefully selected stocks (but small bets!!!).

There are millions of homes EMPTY right now. Even if prices weren't so very high, there are more houses - millions more houses - than there are families who want to live in them here in the United States. Look it up, you will be stunned. The US government has vacant homes in the US at the highest since WWII (and a lot of people were "away" during WWII).
John

Windsor, Canada

|
Report Abuse
|
Judge it!
|
#51
Jan 7, 2008
 
Question? If they cannot afford $4,600 a month how can they afford $3,000. Isn't this the same problem that the country is facing, people are getting in over thier heads. What if he or she loses a job and income, how will they be able to afford the mortgage.

You need at least $200,000 in savings to afford a $400,000 +home. How about buying a $200,000 dollar home or renting, would that would be asking to much? Why are Americans so willing to take on debt! Why do we need everything instantly?

Save money invest in real assets, use that money to buy land with timer, invest in oil, gold, wheat, commodities not an overpriced piece of wood.

We as citizens and as a country need to get it together before we are all homeless! Save more and spend wisely!
Say the Truth

Las Vegas, NV

|
Report Abuse
|
Judge it!
|
#52
Jan 7, 2008
 
Bill wrote:
Points are essentially prepaid interest. Paying points reduces the future interest rate over the life of the mortgage, but the points paid to the bank make up for that. The bank is not giving up anything when you pay points.
You do lose some advantage of refinancing since you are not getting what you paid for (reduced interest over the life of the mortgage), since the mortgage end prematurely. The bank keeps the points paid as a windfall.
Good 'points.' Also, not spending cash now on the pre-paid interest means you pay down the note with cheaper (inflation-adjusted) money.
Say the Truth

Las Vegas, NV

|
Report Abuse
|
Judge it!
|
#53
Jan 7, 2008
 
Roger wrote:
<quoted text>
Great post! My dad too worked a modest job. My mom stayed home and took care of my brother and I. We had a house in Amityville right off the bay, had a boat, went to the beach a couple of times per week, had barbeques almost every weekend, went on vacations - the works.
I also checked what the taxes were back then. No wonder we were able to live better on a fraction of the salaries we make now. Somewhere along the line, the teachers unions and special interest groups got their hands on our wallets. The rest is history.
You got it.
BBB

Salt Lake City, UT

|
Report Abuse
|
Judge it!
|
#54
Jan 7, 2008
 
Roger wrote:
<quoted text>
Great post! My dad too worked a modest job. My mom stayed home and took care of my brother and I. We had a house in Amityville right off the bay, had a boat, went to the beach a couple of times per week, had barbeques almost every weekend, went on vacations - the works.
I also checked what the taxes were back then. No wonder we were able to live better on a fraction of the salaries we make now. Somewhere along the line, the teachers unions and special interest groups got their hands on our wallets. The rest is history.
Just a note to let you all know that it is not "that way" all over the entire country...

I left LI 5 years ago in the exact same situation as you guys (educated, working 2 jobs, wife working full-time just to make ends meet and pay the mortgage on a small 1500 sq. ft. ranch house) and now have 1 job, wife stays home, have a huge house (almost 4K sq. ft) for less than half of what it would have cost on LI, plus about 1/9 the tax bill, 1/2 the electric, 1/2 the gas heat, 1/2 the water, etc etc etc...

Don't be afraid to leave and try somewhere else. Do your homework and it's really not all that hard. Don't believe the BS from those on LI who are too chicken to leave that "jobs in NY pay more" (sometimes but not always) or that you won't find as good a job elsewhere (that's just a flat out LIE)...

Looking back, as much as it seemed emotionally difficult at the time to leave the place I had grown up and spent my entire life (L.I.)--------

It was the SMARTEST thing I have ever done. No regrets, not ONE.

I would do it again in a heartbeat...

“www.longislandbu bble.com”

Since: Jan 07

Long Island

|
Report Abuse
|
Judge it!
|
#55
Jan 8, 2008
 
"If you're willing to take the risk that the house you want will be on the market for a few months, you can take that time to save additional bucks."

What risk? They reverse the truth!

It should be:

"If you are willing to take the risk by buying now when every single economic indicator, include experts such Robert Shiller have proven through research that house prices are going to fall by as much as 50% or more nationally"
kskmb ny

Baltimore, MD

|
Report Abuse
|
Judge it!
|
#56
Jan 8, 2008
 
Just buy a house you can afford? Have you seen what you can get out there in the 500's? Forget the 400's. Even if you A) are not wealthy or B) did not have the opportunity to buy before the bubble, you should still be able to buy a house for your family. I, frankly, think he should have held off for prices to come back down, but you're out to lunch if you think that there's anything fit to raise a family in lower than the price this poor dude is paying in the NY commuting area.
Tuma

Baltimore, MD

|
Report Abuse
|
Judge it!
|
#57
Jan 9, 2008
 
If you must go through the gimmicks of two loans, it means you can't afford the house. That simple. Buy what you can afford, people!!!!
kampa

Philadelphia, PA

|
Report Abuse
|
Judge it!
|
#58
Jan 9, 2008
 
BBB wrote:
<quoted text>
Just a note to let you all know that it is not "that way" all over the entire country...
I left LI 5 years ago in the exact same situation as you guys (educated, working 2 jobs, wife working full-time just to make ends meet and pay the mortgage on a small 1500 sq. ft. ranch house) and now have 1 job, wife stays home, have a huge house (almost 4K sq. ft) for less than half of what it would have cost on LI, plus about 1/9 the tax bill, 1/2 the electric, 1/2 the gas heat, 1/2 the water, etc etc etc...
Don't be afraid to leave and try somewhere else. Do your homework and it's really not all that hard. Don't believe the BS from those on LI who are too chicken to leave that "jobs in NY pay more" (sometimes but not always) or that you won't find as good a job elsewhere (that's just a flat out LIE)...
Looking back, as much as it seemed emotionally difficult at the time to leave the place I had grown up and spent my entire life (L.I.)--------
It was the SMARTEST thing I have ever done. No regrets, not ONE.
I would do it again in a heartbeat...
I always love to hear that other people got it too. Leaving L.I. 2 years ago was the best thing my family did.Some people are so brainwashed that they can't even consider thinking outside the box so they can't complain when they are paying every cent they have towards bills if they are not willing to open their minds.
BBB

Salt Lake City, UT

|
Report Abuse
|
Judge it!
|
#59
Jan 9, 2008
 
kampa wrote:
<quoted text>I always love to hear that other people got it too. Leaving L.I. 2 years ago was the best thing my family did.Some people are so brainwashed that they can't even consider thinking outside the box so they can't complain when they are paying every cent they have towards bills if they are not willing to open their minds.
And, better than that, they;ll turn around and tell YOU that your new location "isn't any better", or "you really aren't better off" or "really don't have a better house / job / quality of life"...or else they will say that you "left because you couldn't afford it (on LI)..."

Hell, I lived on the Island for almost 40 years; had a house, got married, had 3 kids - what was it that I "couldn't afford"?

All because they are locked into DENIAL of the fact that they are just too SCARED to take any risks whatsoever - so they just sit tight while everything gets worse, and try to convince themselves that people like you and I are just "making it all up" about finding a much better life elsewhere...
Jim

Hempstead, NY

|
Report Abuse
|
Judge it!
|
#60
Jan 15, 2008
 
Left LI wrote:
Just about all of Long Island is trash, and never more then 1 mile away from a ghetto. Enjoy your 2 mortgages, and corrupt local gov, school boards, oh yes and local water authority!! Have fun with that commute from Miller Place to NYC! Enjoy the LIRR....
Um...Staten Island reeks and at least we don't have to pay a toll just to get home.

Tell me when this thread is updated: (Registration is not required)

Add to my Tracker Send me an email

First Prev
of 3
Next Last
Type in your comments below
Name
(appears on your post)
Comments
Characters left: 4000
Type the numbers you see in the image on the right:

Please note by clicking on "Post Comment" you acknowledge that you have read the Terms of Service and the comment you are posting is in compliance with such terms. Be polite. Inappropriate posts may be removed by the moderator. Send us your feedback.

•••
•••

Woodbury News Video

•••
•••

Woodbury Jobs

•••
Enter and win $5000
•••
•••

Woodbury People Search

Addresses and phone numbers for FREE

•••

Woodbury News, Events & Info

Click for news, events and info in Woodbury
•••

Personal Finance

Mortgages [ See current mortgage rates ]
•••