Author Topic: The Benefits of Home Ownership?  (Read 13749 times)

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Offline cramx3

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Re: The Benefits of Home Ownership?
« Reply #210 on: January 29, 2018, 12:58:22 PM »
PMI is a penalty you pay for not having a % as a down payment when buying a house.  I put down $11,000 when I bought my house, I needed 20% to not get charged the PMI which was $20,000 so i had to pay this tax.  It's bullshit that they get to do this but they do.  My PMI is up in 6 months and I will have an extra $81.00 a month in out pockets.

I'm not sure I agree with you on the bullshit part of this.  The PMI is not a tax, it's insurance from the lender that we pay so they feel comfortable giving a loan of money that we, at that point, showed we are not able to pay right then.  I think it's a fair way to get people to buy houses who otherwise would not have been able to.  LIke you said, it goes away once you get to 20%.  I'd be pissed if they kept it throughout the life of the loan.  I got another couple years before I reach that point, then $150 off my tab each month.

And Chino, I hear ya about the family part.   As a single guy (my brother lives with me) I have no issue with the small house that requires small maintenance.  I think I could only have one kid in this house before I'd want to move (its only 2 bedroom and 1.5 bath).  I just think it's more like I have zero kids than I have 2 kids hence why I can realistically see myself in the same spot for the remainder of my life.  I do have nice space in my basement though.  Honestly have put serious thought into building my laundry room into a studio for gaming and live streaming (aka going the full green screen and lighting route).  It's nice to have these options.

Tell me how many people have 20% to get a house for 1st time buyers?  It's another revenue stream for banks to make more money.

Well, also tell me, how many people who don't put down 20% foreclose and leave it to the bank?  I think it goes both ways here.  The banks take a risk on me, and I pay for it.  I am not trying to defend the banks (shit, I am paying them!) but I am just trying to look at it in a fair way.   I most certainly wouldn't of had a house if it weren't for this.  I would have been put into an apartment where I would struggle to save up that 20% and maybe could buy a house when I am 40.  Since it seems quite a few of us had/have FHA loans, I think we all benefitted from this program.  But also, luckily for this, I am now (slowly) building that home equity and next time I won't have to go the FHA route.

Offline axeman90210

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Re: The Benefits of Home Ownership?
« Reply #211 on: January 29, 2018, 12:59:47 PM »
Some of you guys are making me jealous with the cost of buying where you live. I'll probably be living at home for another two years while I save up for a down payment on a condo. There's a new condo unit under construction that I walk by every day, and while it's true this is going to be something of a luxury building, the banner on the site advertises that studio condos will start at 600K. Even an older 1 bedroom condo is going for at least 350K.
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Offline Cool Chris

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Re: The Benefits of Home Ownership?
« Reply #212 on: January 29, 2018, 01:09:59 PM »
Isn't a higher portion of "higher risk loans" going to be attached to minority borrowers, and this charging them a higher rate would be "racist?"
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Re: The Benefits of Home Ownership?
« Reply #213 on: January 29, 2018, 01:30:38 PM »
Equal housing lenders!  That term is everywhere when doing the paperwork.

Some of you guys are making me jealous with the cost of buying where you live. I'll probably be living at home for another two years while I save up for a down payment on a condo. There's a new condo unit under construction that I walk by every day, and while it's true this is going to be something of a luxury building, the banner on the site advertises that studio condos will start at 600K. Even an older 1 bedroom condo is going for at least 350K.

Well, you just need to get away from the city.  The burbs are where it's at.  The cost of living near the city is ridiculous if you ask me and I certainly don't make the kind of money to afford it either.  But I grew up here, I love it here, and I understand for some people, it's not even an option to move here just because of the city mentality.

Offline kingshmegland

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Re: The Benefits of Home Ownership?
« Reply #214 on: January 29, 2018, 01:36:14 PM »
PMI is a penalty you pay for not having a % as a down payment when buying a house.  I put down $11,000 when I bought my house, I needed 20% to not get charged the PMI which was $20,000 so i had to pay this tax.  It's bullshit that they get to do this but they do.  My PMI is up in 6 months and I will have an extra $81.00 a month in out pockets.

I'm not sure I agree with you on the bullshit part of this.  The PMI is not a tax, it's insurance from the lender that we pay so they feel comfortable giving a loan of money that we, at that point, showed we are not able to pay right then.  I think it's a fair way to get people to buy houses who otherwise would not have been able to.  LIke you said, it goes away once you get to 20%.  I'd be pissed if they kept it throughout the life of the loan.  I got another couple years before I reach that point, then $150 off my tab each month.

And Chino, I hear ya about the family part.   As a single guy (my brother lives with me) I have no issue with the small house that requires small maintenance.  I think I could only have one kid in this house before I'd want to move (its only 2 bedroom and 1.5 bath).  I just think it's more like I have zero kids than I have 2 kids hence why I can realistically see myself in the same spot for the remainder of my life.  I do have nice space in my basement though.  Honestly have put serious thought into building my laundry room into a studio for gaming and live streaming (aka going the full green screen and lighting route).  It's nice to have these options.

Tell me how many people have 20% to get a house for 1st time buyers?  It's another revenue stream for banks to make more money.

Well, also tell me, how many people who don't put down 20% foreclose and leave it to the bank?  I think it goes both ways here.  The banks take a risk on me, and I pay for it.  I am not trying to defend the banks (shit, I am paying them!) but I am just trying to look at it in a fair way.   I most certainly wouldn't of had a house if it weren't for this.  I would have been put into an apartment where I would struggle to save up that 20% and maybe could buy a house when I am 40.  Since it seems quite a few of us had/have FHA loans, I think we all benefitted from this program.  But also, luckily for this, I am now (slowly) building that home equity and next time I won't have to go the FHA route.

Well that was put in in the 90s after the banks went crazy on giving loans durring the 80s's period. They were Their Own Worst Enemy and now we pay for their gluttony.
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Offline cramx3

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Re: The Benefits of Home Ownership?
« Reply #215 on: January 29, 2018, 01:42:49 PM »
There's certainly lots of truth the to banks giving loans to people who shouldn't of gotten them.  I just look at it as I get something and they get something out of the deal, it's not really a one way street even if it works out better for the bank than me.  I am OK with that in this case.

Offline axeman90210

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Re: The Benefits of Home Ownership?
« Reply #216 on: January 29, 2018, 01:59:50 PM »
Some of you guys are making me jealous with the cost of buying where you live. I'll probably be living at home for another two years while I save up for a down payment on a condo. There's a new condo unit under construction that I walk by every day, and while it's true this is going to be something of a luxury building, the banner on the site advertises that studio condos will start at 600K. Even an older 1 bedroom condo is going for at least 350K.

Well, you just need to get away from the city.  The burbs are where it's at.  The cost of living near the city is ridiculous if you ask me and I certainly don't make the kind of money to afford it either.  But I grew up here, I love it here, and I understand for some people, it's not even an option to move here just because of the city mentality.

Even the burbs are getting crazy. My friend went through a several month hunt trying to find a house in the suburbs (happily enough ended up moving a little over a mile from where I currently am) and it was a nightmare of bidding wars. People offering way over asking price in cash and that kind of stuff. Makes me pray that Newark doesn't get the new Amazon office because I'd hate to see what adding 50k tech workers would do to the housing market.
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Offline cramx3

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Re: The Benefits of Home Ownership?
« Reply #217 on: January 29, 2018, 02:19:23 PM »
True, but the market is good now so competition is happening.  There was little to no competition 5 years ago for me.  I made a low offer (20k under asking price) and was accepted the same weekend.  Had some help with my sweet talking mother (she was my real estate agent, as that is her profession, and she really did work the old lady home owner into the price).  But still, there was no bidding war or anything.  However, my friend bought a house a year ago and said there was a lot of bidding and house hunting.  Definitely sounds like a headache.

Offline Cool Chris

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Re: The Benefits of Home Ownership?
« Reply #218 on: January 29, 2018, 02:29:51 PM »
Makes me pray that Newark doesn't get the new Amazon office because I'd hate to see what adding 50k tech workers would do to the housing market.

As someone who is seeing firsthand what this can do to a housing market, I support your praying. Amazon et al has turned Seattle in to the land of the million dollar 600 sf house. That's not to say there are only downfalls. But since this is a discussion about housing, yes wherever Amazon HQ2 sets up shop will see housing prices go berserk.
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Re: The Benefits of Home Ownership?
« Reply #219 on: January 29, 2018, 02:38:46 PM »
It's pure insurance.  PMI pays for all the people that default on their mortgage, and foreclosure losses.  It's no different than any other kind of insurance.  If you never have a car accident, then car insurance is bull-shit.  If you never get sick, than disability insurance is bull-shit.

If the insurance premiums were born 100% by the banks, then a shit-ton more high-risk people would apply for mortgages (ie, people who can't afford the premiums), and there would be a lot more defaults/foreclosures - raising EVERYONE's cost of borrowing.

Capitalism at it's finest.
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Offline kingshmegland

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Re: The Benefits of Home Ownership?
« Reply #220 on: January 29, 2018, 02:53:05 PM »
It's pure insurance.  PMI pays for all the people that default on their mortgage, and foreclosure losses.  It's no different than any other kind of insurance.  If you never have a car accident, then car insurance is bull-shit.  If you never get sick, than disability insurance is bull-shit.

If the insurance premiums were born 100% by the banks, then a shit-ton more high-risk people would apply for mortgages (ie, people who can't afford the premiums), and there would be a lot more defaults/foreclosures - raising EVERYONE's cost of borrowing.

Capitalism at it's finest.

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Offline Grappler

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Re: The Benefits of Home Ownership?
« Reply #221 on: January 30, 2018, 06:15:08 AM »
It's pure insurance.  PMI pays for all the people that default on their mortgage, and foreclosure losses.  It's no different than any other kind of insurance.  If you never have a car accident, then car insurance is bull-shit.  If you never get sick, than disability insurance is bull-shit.

If the insurance premiums were born 100% by the banks, then a shit-ton more high-risk people would apply for mortgages (ie, people who can't afford the premiums), and there would be a lot more defaults/foreclosures - raising EVERYONE's cost of borrowing.

Capitalism at it's finest.

I disagree.  It's bullshit that the banks take out the insurance policy and force the homeowners to pay for it, when it protects only the bank.  That was always my issue with it - why do I have to pay for your protection?

But I have no problem with the bank taking out that insurance - bad things can happen unexpectedly.  It's the reason that we have insurance.  Just because you've never been in a car accident or been ill doesn't mean that it won't happen eventually.  People can lose their jobs, take pay-cuts, and experience all sorts of financial issues that can lead them to defaulting on a mortgage.

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Re: The Benefits of Home Ownership?
« Reply #222 on: January 30, 2018, 07:27:29 AM »
It's pure insurance.  PMI pays for all the people that default on their mortgage, and foreclosure losses.  It's no different than any other kind of insurance.  If you never have a car accident, then car insurance is bull-shit.  If you never get sick, than disability insurance is bull-shit.

If the insurance premiums were born 100% by the banks, then a shit-ton more high-risk people would apply for mortgages (ie, people who can't afford the premiums), and there would be a lot more defaults/foreclosures - raising EVERYONE's cost of borrowing.

Capitalism at it's finest.
People can lose their jobs, take pay-cuts, and experience all sorts of financial issues that can lead them to defaulting on a mortgage.

I see your point, but I disagree.  It's economics.  If the banks had to bear that cost themselves, interest rates would go up.  All costs are eventually pushed down to the end consumer, or the last link in the value consumption chain.  Property/casualty insurance companies purchase insurance on the insurance they issue you (re-insurance).  You don't think you're bearing that cost in your car insurance premiums?
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Offline Stadler

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Re: The Benefits of Home Ownership?
« Reply #223 on: January 30, 2018, 07:54:29 AM »
Tell me how many people have 20% to get a house for 1st time buyers?  It's another revenue stream for banks to make more money.

I agree. Seems a bit steep and it's just another way for big money to hammer us. I get they need 'some' protection.....that protection should be them not lending the $$ or just charge the higher risk loans a higher interest rate. Nailing us to the tune of $100-$180 a month extra just because they can is BS.

But look at what you wrote:  if you're worried about "Big Money" (good tune, really hate the liberal descriptor "Big" before any institution they don't like.  Yes, I know you're not a liberal, but that's the origin of that terminology) why do you give them two options that actually make them the same amount of money but fuck over the little guy?  If they don't give YOU (the person without the 20% down), they WILL give it to someone else who does, meaning, they make their money and you don't have a house, or they charge higher interest, which  means they get their money and you still pay more?  Why wouldn't you take the PMI which actually also affords you some protection, and can fall off the note at the 20% equity point (a higher interest rate will not and would require you to pay additional closing costs, which is yet more money out of your pocket)?   

Offline Stadler

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Re: The Benefits of Home Ownership?
« Reply #224 on: January 30, 2018, 07:59:51 AM »
There's certainly lots of truth the to banks giving loans to people who shouldn't of gotten them.  I just look at it as I get something and they get something out of the deal, it's not really a one way street even if it works out better for the bank than me.  I am OK with that in this case.

This is to King as well, but whoa whoa - why is it the banks' fault that someone got in over their head?   Every President since Reagan, and I only stop there because that's as far back as my direct knowledge goes, has had some program or some initiative to get people into their own homes.  Perhaps the things you guys say aren't true if we don't accept that owning your own home is a good thing, a goal, and a positive for both the people and communities (roots, quality of life, condition of our neighborhoods).  How many of you live in a community and you can tell which houses are "owned" and which are "rented"?   

Having said that, when I got into a little financial trouble around the time of my divorce, it was on me.  I signed the papers, I agreed to the debt, not the bank.   To blame the banks when Joe Blow doesn't make a mortgage payment - or call the bank for a restructuring - is kind of "Bernie thinking".   

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Re: The Benefits of Home Ownership?
« Reply #225 on: January 30, 2018, 08:03:51 AM »
That's not the point.  it was the banks who wanted to give out loans like cigarettes to kids in the 50's.  If you were not financially well off to buy a house, then you can't get one.  No even though I was well enough to buy a house I was penalized because big banks saw an opportunity to make more money.  I paid more for their sins, not mine.
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Re: The Benefits of Home Ownership?
« Reply #226 on: January 30, 2018, 08:07:20 AM »
It's pure insurance.  PMI pays for all the people that default on their mortgage, and foreclosure losses.  It's no different than any other kind of insurance.  If you never have a car accident, then car insurance is bull-shit.  If you never get sick, than disability insurance is bull-shit.

If the insurance premiums were born 100% by the banks, then a shit-ton more high-risk people would apply for mortgages (ie, people who can't afford the premiums), and there would be a lot more defaults/foreclosures - raising EVERYONE's cost of borrowing.


Capitalism at it's finest.

I can't tell if you're being sarcastic or not, but it IS capitalism at it's finest.  The alternative is what was tried with the ACA; fuck those that are healthy (here, financially capable) and make them pay for everyone else.    I think some of you are missing that you don't HAVE to pay PMI forever.  If you get your loan restructured and your property value has risen, PMI bye bye!   It's not a tax that goes forever. 

Plus, think about  it:  the PMI is meant to protect the lender in the event of a foreclosure.  Let's say you lose your job and can't pay for a month or so.   There are times when the PMI company will bridge your loan in order to prevent foreclosure.   Typical losses on a foreclosure can be as much as 30% of home value, and that would all come right from the PMI provider.   Speaking of job loss, some PMI providers will cover temporary, unexpected job losses, again, to prevent a foreclosure they have to pay on.   

Offline Stadler

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Re: The Benefits of Home Ownership?
« Reply #227 on: January 30, 2018, 08:09:05 AM »
It's pure insurance.  PMI pays for all the people that default on their mortgage, and foreclosure losses.  It's no different than any other kind of insurance.  If you never have a car accident, then car insurance is bull-shit.  If you never get sick, than disability insurance is bull-shit.

If the insurance premiums were born 100% by the banks, then a shit-ton more high-risk people would apply for mortgages (ie, people who can't afford the premiums), and there would be a lot more defaults/foreclosures - raising EVERYONE's cost of borrowing.

Capitalism at it's finest.

I disagree.  It's bullshit that the banks take out the insurance policy and force the homeowners to pay for it, when it protects only the bank.  That was always my issue with it - why do I have to pay for your protection?

But I have no problem with the bank taking out that insurance - bad things can happen unexpectedly.  It's the reason that we have insurance.  Just because you've never been in a car accident or been ill doesn't mean that it won't happen eventually.  People can lose their jobs, take pay-cuts, and experience all sorts of financial issues that can lead them to defaulting on a mortgage.

See above; you DO get some protections from that insurance.  The insurance is against foreclosure.  They will often step in - to your advantage - when the outcome can prevent them taking a loss equal to 30% of the home value.

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Re: The Benefits of Home Ownership?
« Reply #228 on: January 30, 2018, 08:11:33 AM »
I was being 100% serious.  Charge what the market will bear.
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Re: The Benefits of Home Ownership?
« Reply #229 on: January 30, 2018, 08:15:15 AM »
That's not the point.  it was the banks who wanted to give out loans like cigarettes to kids in the 50's.  If you were not financially well off to buy a house, then you can't get one.  No even though I was well enough to buy a house I was penalized because big banks saw an opportunity to make more money.  I paid more for their sins, not mine.

I don't disagree, but "financially well off" is a subjective term, and it's not JUST "money for mortgage payment".   Compared with even 15 years ago think about all the monthly payments you have.  Cell phone. Spotify.  Cable.   Sirius.   Etc.  So the math that went into buying the house may or may not be valid now.   Plus if you're like my ex-wife, and a house isn't enough - got to furnish it! - buying the house may not be the problem; I may be able to afford the house, but once I take out an unsecured loan (credit card or otherwise) and now can't meet the payments on all of it, I'm fucked, but the bank had no part of that.   Why should they bear the risk of that?   They can't terminated the contract (that's what a mortgage is) except by following costly procedures.    Without PMI, foreclosures would be higher, which will also be spread out to the homeowner, so you're paying either way.   At least this way, there are at least some benefits for you the homeowner, and there's a way to avoid paying it.

Offline gmillerdrake

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Re: The Benefits of Home Ownership?
« Reply #230 on: January 30, 2018, 08:21:11 AM »
Tell me how many people have 20% to get a house for 1st time buyers?  It's another revenue stream for banks to make more money.

I agree. Seems a bit steep and it's just another way for big money to hammer us. I get they need 'some' protection.....that protection should be them not lending the $$ or just charge the higher risk loans a higher interest rate. Nailing us to the tune of $100-$180 a month extra just because they can is BS.

But look at what you wrote:  if you're worried about "Big Money" (good tune, really hate the liberal descriptor "Big" before any institution they don't like.  Yes, I know you're not a liberal, but that's the origin of that terminology) why do you give them two options that actually make them the same amount of money but fuck over the little guy?  If they don't give YOU (the person without the 20% down), they WILL give it to someone else who does, meaning, they make their money and you don't have a house, or they charge higher interest, which  means they get their money and you still pay more?  Why wouldn't you take the PMI which actually also affords you some protection, and can fall off the note at the 20% equity point (a higher interest rate will not and would require you to pay additional closing costs, which is yet more money out of your pocket)?

I don't have an issue with the banks making money on the loans they give out. They're the ones with the $$ to hand out so they should make money on it. But they are ALREADY making money on it with whatever interest rate they charge you. People with good credit get ___ interest rate, bad get ____....great gets ____. It seems simple enough and provides incentive for people to care about their decisions that could affect their credit scores. PMI or whatever loan insurance 'in case' the loan is defaulted on should be assumed by the banks and not by the borrowers.

Or, they could just lower the cost of PMI. Tacking on an additional $100+ to a house payment is brutal for most everyone. I know I could use an extra $100 a month.
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Offline lordxizor

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Re: The Benefits of Home Ownership?
« Reply #231 on: January 30, 2018, 08:24:36 AM »
If they didn't charge PMI, they'd just raise the interest rate by an equivalent amount. PMI sucks, but I don't get the backlash against it. The banks will get their money one way or another. And you can get rid of PMI after you have 20% equity in your home. It is my choice to buy a house with less than 20% down, so I chose to have PMI. If I din't like it that much I could have saved fora couple more years toward my down payment.

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Re: The Benefits of Home Ownership?
« Reply #232 on: January 30, 2018, 08:29:29 AM »
If they didn't charge PMI, they'd just raise the interest rate by an equivalent amount. PMI sucks, but I don't get the backlash against it. The banks will get their money one way or another. And you can get rid of PMI after you have 20% equity in your home. It is my choice to buy a house with less than 20% down, so I chose to have PMI. If I din't like it that much I could have saved fora couple more years toward my down payment.

Exactly, I get to live in a house where I otherwise wouldn't be able to for a bit longer.  I got to get in on a house investment in a down market.  It was to my benefit to get the PMI and live here.  It sucks, but it will go away when I meet the requirements and it's what both the bank and I agreed upon.  No one forced this, but I am happy I had this option.

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Re: The Benefits of Home Ownership?
« Reply #233 on: January 30, 2018, 08:34:04 AM »
If they didn't charge PMI, they'd just raise the interest rate by an equivalent amount.

And then EVERYONE would be "paying" for that cost (of insurance) for the entire life of the mortgage, not just until you have 20% of it paid off.
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Offline kingshmegland

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Re: The Benefits of Home Ownership?
« Reply #234 on: January 30, 2018, 08:41:18 AM »
If they didn't charge PMI, they'd just raise the interest rate by an equivalent amount. PMI sucks, but I don't get the backlash against it. The banks will get their money one way or another. And you can get rid of PMI after you have 20% equity in your home. It is my choice to buy a house with less than 20% down, so I chose to have PMI. If I din't like it that much I could have saved fora couple more years toward my down payment.

Before the late 80's I didn't have to worry about PMI.  You are forgetting how the banks mismanaged handing out loans causing them to add PMI to protect themselves from themselves. 
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Offline gmillerdrake

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Re: The Benefits of Home Ownership?
« Reply #235 on: January 30, 2018, 08:44:46 AM »
Before the late 80's I didn't have to worry about PMI.  You are forgetting how the banks mismanaged handing out loans causing them to add PMI to protect themselves from themselves.

This is the gist of it all.

Not arguing against this:

If they didn't charge PMI, they'd just raise the interest rate by an equivalent amount. PMI sucks, but I don't get the backlash against it. The banks will get their money one way or another. And you can get rid of PMI after you have 20% equity in your home. It is my choice to buy a house with less than 20% down, so I chose to have PMI. If I din't like it that much I could have saved fora couple more years toward my down payment.

or this:

Exactly, I get to live in a house where I otherwise wouldn't be able to for a bit longer.  I got to get in on a house investment in a down market.  It was to my benefit to get the PMI and live here.  It sucks, but it will go away when I meet the requirements and it's what both the bank and I agreed upon.  No one forced this, but I am happy I had this option.

but King's point is the source of the frustration. PMI is there because of the fault of the banking industry.....not the borrowers.
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Offline Stadler

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Re: The Benefits of Home Ownership?
« Reply #236 on: January 30, 2018, 09:41:53 AM »
Tell me how many people have 20% to get a house for 1st time buyers?  It's another revenue stream for banks to make more money.

I agree. Seems a bit steep and it's just another way for big money to hammer us. I get they need 'some' protection.....that protection should be them not lending the $$ or just charge the higher risk loans a higher interest rate. Nailing us to the tune of $100-$180 a month extra just because they can is BS.

But look at what you wrote:  if you're worried about "Big Money" (good tune, really hate the liberal descriptor "Big" before any institution they don't like.  Yes, I know you're not a liberal, but that's the origin of that terminology) why do you give them two options that actually make them the same amount of money but fuck over the little guy?  If they don't give YOU (the person without the 20% down), they WILL give it to someone else who does, meaning, they make their money and you don't have a house, or they charge higher interest, which  means they get their money and you still pay more?  Why wouldn't you take the PMI which actually also affords you some protection, and can fall off the note at the 20% equity point (a higher interest rate will not and would require you to pay additional closing costs, which is yet more money out of your pocket)?

I don't have an issue with the banks making money on the loans they give out. They're the ones with the $$ to hand out so they should make money on it. But they are ALREADY making money on it with whatever interest rate they charge you. People with good credit get ___ interest rate, bad get ____....great gets ____. It seems simple enough and provides incentive for people to care about their decisions that could affect their credit scores. PMI or whatever loan insurance 'in case' the loan is defaulted on should be assumed by the banks and not by the borrowers.

Or, they could just lower the cost of PMI. Tacking on an additional $100+ to a house payment is brutal for most everyone. I know I could use an extra $100 a month.

First, "insurance" costs what it costs.  It gets underwritten and is what it is.   A lesser premium WOULD be a tax or a penalty, because it wouldn't cover the risk.

Second, I respectfully think you're looking at this from the wrong direction.  Why would  the banks assume that charge?   They are going to put their money to work one way or another.  They are going to get their return.  If you, the potential homeowner, want a house, you have only so many options.   With the time value of money being what it is, it's almost NEVER more cost effective to wait until you've saved the 20%, or till your credit score is sufficient to get that extra 1% off your interest rate.   You end up paying more in the long run that way.   

So the option is, higher interest rate for the life of the loan, or PMI for a period of time (roughly ten years on a 250K loan with 3.5% down, FHA numbers).   Funny thing?  On a $250K loan for 30 years, the difference between a 3.75% interest rate and a 4.75% interest rate is.... wait for it Long Beach, wait for it!     Just over $100.   

Offline gmillerdrake

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Re: The Benefits of Home Ownership?
« Reply #237 on: January 30, 2018, 09:44:54 AM »
I respectfully think you're looking at this from the wrong direction.

I can almost guarantee that  :lol   I don't disagree with any of what you've replied/responded with. It's more of an emotional plea of there 'has' to be a better way.
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Offline Stadler

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Re: The Benefits of Home Ownership?
« Reply #238 on: January 30, 2018, 09:46:48 AM »

but King's point is the source of the frustration. PMI is there because of the fault of the banking industry.....not the borrowers.

And that's where we disagree.  I don't believe that at all.   The bank didn't force those people to buy those houses.  The bank didn't make the financial choices every month to pay for satellite dishes and iPhones instead of paying for the mortgage.   The bank didn't not call for a modification to the loan to make it possible to catch up (I know three people - personally - that got pushed into a foreclosure process.  Only one of them called and worked through the process of modifying the loan to avoid foreclosure; the other two just simply stopped paying.  Guess which one still owns the house to this day?)   

The note is held by the homeowner.  The homeowner is responsible for the terms of that note.  If the note is defaulted on, that is the responsibility of the homeowner.   

Offline Stadler

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Re: The Benefits of Home Ownership?
« Reply #239 on: January 30, 2018, 09:49:15 AM »
I respectfully think you're looking at this from the wrong direction.

I can almost guarantee that  :lol   I don't disagree with any of what you've replied/responded with. It's more of an emotional plea of there 'has' to be a better way.

I'm not sure I'd argue that point.  There probably is a better way. As a general proposition, I'm not the hugest fan of insurance, so I understand your point.  It's just the better of the two or three options we have right now.   I think my biggest issue isn't any of this stuff, but the post above.  I really have a hard time with any scenario that takes responsibility away from those in the position to make the decision or not.    The banks aren't forcing anyone to do anything with a gun to their head. 

Offline kingshmegland

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Re: The Benefits of Home Ownership?
« Reply #240 on: January 30, 2018, 10:01:00 AM »

but King's point is the source of the frustration. PMI is there because of the fault of the banking industry.....not the borrowers.

And that's where we disagree.  I don't believe that at all.   The bank didn't force those people to buy those houses.  The bank didn't make the financial choices every month to pay for satellite dishes and iPhones instead of paying for the mortgage.   The bank didn't not call for a modification to the loan to make it possible to catch up (I know three people - personally - that got pushed into a foreclosure process.  Only one of them called and worked through the process of modifying the loan to avoid foreclosure; the other two just simply stopped paying.  Guess which one still owns the house to this day?)   

The note is held by the homeowner.  The homeowner is responsible for the terms of that note.  If the note is defaulted on, that is the responsibility of the homeowner.

While i understand this, it's the bankers who guide the homebuyers on how much they can afford and not guide them into a mortgage that the homebuyer has little understanding.  For example while it was new the adjustable load rates was a bad idea.  People after a year could not handle the loans when it skyrocketed higher than excepted.  It's not that the buyers were dumb, just not full informed by those handing out these new style loans.

In the end it is on the buyer but at that time, they were mislead leading to all the foreclosures.
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Offline Stadler

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Re: The Benefits of Home Ownership?
« Reply #241 on: January 30, 2018, 10:19:13 AM »
We'll have to respectfully disagree.  We may be talking more philosophy here, but a base assumption of my world view is that if I'm underinformed, it's no one's responsibility but my own.    Doesn't mean I'm right and you're wrong, it just means we're operating under different assumptions.

Offline kingshmegland

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Re: The Benefits of Home Ownership?
« Reply #242 on: January 30, 2018, 10:21:23 AM »
Now we are better educated.  That onslaught in the 80's with all the new and different loans people were not and then banks walking them into bad loans.   The banks were not straightforward then.
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Offline jingle.boy

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Re: The Benefits of Home Ownership?
« Reply #243 on: January 30, 2018, 10:30:35 AM »
I don't think that because some group got a better deal in the past than you (royal 'you') are getting today means you're entitled to that deal.  Yeah, the banks over-extended themselves, and adjusted.  Just because someone got a better-than-they-deserved deal doesn't mean you're getting screwed.

Another point... the banks are pushing the cost of mitigating the risk of default to the party that would ultimately be responsible for the default.  I really don't see a problem in this.

I would compare it to the landlord that offers rent + utilities vs rent with utilities included.  You think it's the same rent?  Hell no... they are passing the cost of the utilities down to their customer - either discretely, or embedded into the price of the main 'product'.
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Offline Implode

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Re: The Benefits of Home Ownership?
« Reply #244 on: February 02, 2018, 12:38:08 PM »
I was looking for the thread a while ago and couldn't find it. Not to interrupt the discussion, but I just closed on my first home on Wednesday. It's just a 1500 sqft townhome, but I'm still really excited about it.