Submitted by KindaEgotistical t3_10ko116 in Connecticut
Striking-Trainer8148 t1_j5ryjh2 wrote
As a recent homebuyer who just moved here, I apologize for the following harsh truth.
Average home price in the us is $500,000 right now. (Source: https://www.statista.com/statistics/240991/average-sales-prices-of-new-homes-sold-in-the-us/)
We are one of the more expensive states. (#13 including DC ahead of us according to here: https://worldpopulationreview.com/state-rankings/median-home-price-by-state)
300k is well below average for this area.
You’re better off putting your down payment into a 6% CD and waiting 2-3 years for rates to drop. The current rates either need to change or prices need to drop. This is not a good time to buy in, because you’ll have to refinance in a few years to get out from your terrible rate. Refinancing will force you to pay closing costs again. So essentially you can take the 30k you’d have to pay towards your refinance and pay rent for a little bit instead, and probably come out ahead.
phunky_1 t1_j5tcpuj wrote
The cost to refinance is nowhere near 30k. I think I paid like 5k to refinance around a 330k loan, and they can just roll the closing costs in to the loan of you don't have the cash.
How much money will they piss away on rent in 2-3 years?
The refinance would pay for itself vs a few months of renting.
silasmoeckel t1_j5s6xr9 wrote
Problem is rents have factored that in, try renting a house even something small is 3k a month.
Striking-Trainer8148 t1_j5s70lz wrote
Don’t rent a house.
silasmoeckel t1_j5s98oh wrote
Don't compare apples to oranges. Would say most people looking to buy a house need a house. Cramming a typical family of 4 into an apartment is not always practical.
Your still looking at 2k or more for a tiny 3br apartment and thats going to be in a neighborhood you would not want to send your kids to school in.
Striking-Trainer8148 t1_j5sa4lh wrote
Wow sounds like OP can’t afford to start a family i guess. 🤷🏻♂️
silasmoeckel t1_j5seh7s wrote
Not like anywhere else is particularly better.
Suck it up and pay the PMI on a FHA if they can afford the monthly.
phunky_1 t1_j5td7um wrote
Don't get a FHA.
They changed the rules so you can never get rid of PMI now.
You can get a conventional loan for only 5-6% down and PMI goes away once you get 20% equity.
Morendhil t1_j5tw4yo wrote
Torrington Savings Bank will do a conventional for 10% down with no PMI if you have good enough credit.
silasmoeckel t1_j5tk1f6 wrote
Same difference, point being dont need 20% down
secretmuffinsauce t1_j5tin1v wrote
Bold of you to assume any seller will work with FHA financing
silasmoeckel t1_j5ttzrk wrote
Thats never seemed to be a problem sellers dont want to give back deposits.
secretmuffinsauce t1_j5vxeb5 wrote
What? Has nothing to do with deposit. Sellers take conventional and cash offers allllllllll day over FHA and VA. sellers don’t want to fix anything and FHA appraisals more often than not require repairs or adjustments.
silasmoeckel t1_j5x04sh wrote
Cash only is cash only and even then some types of loans considered good as cash.
Nothing stopping you from getting conventional approval and switching to a FHA. They want to back out post deposit thats up to them but they have lost time/opportunity at that point. After all you can get approved for some very bad coventialy loans and horrid DTI, does not mean it makes sense to buy a home with them.
1234nameuser t1_j5tdt6n wrote
Even if rents are up 1000/mo above normal (they're not) that's still just 12k/yr. Everyone expects New England to fall around 10% in 2 years time.
Even with a $300k home that means it's better to rent at excessive prices for 3yrs in order to buy once prices / interest rates have aligned.
Date the rate, marry the house. Inventory is what matters most though to ensure a good purchase and there's simply not enough around to bother.
BubbaKushFFXIV t1_j5tfy56 wrote
Where are you getting an apartment for $1000/mo?
1234nameuser t1_j5tgm36 wrote
rent + $1000
Reference to that even if rents are escalated right now, they're still no worse than buying a house at current inventory levels.
silasmoeckel t1_j5tl0pv wrote
Sure, they want to start a family the realy means they need to figure out where they are living for the next 5 years at least to get a good preschool lined up.
Paying a premium on the house price is not a huge issue it's step one to starting a family and putting down roots. All that matters is that you can pay your monthly today stop thinking of it as an investment. Figure it's the 13 years of your kids schooling.
The uncertainty of apartments so you hopefully save a bit in a few years on the house price is not worth putting off starting a family.
Warpedme t1_j5tgiuh wrote
Lol at a rent for only $1000 a month. I can't even find a tiny one bedroom for under $2000 that isn't a complete shithole.
johnsonutah t1_j5tblo6 wrote
Carve out Fairfield County from the CT’s average and see what it is - guarantee it’s a lot lower. Every house south of Monroe is close to a million or more. Central CT is a lot more affordable
1234nameuser t1_j5te1df wrote
"low ball, reject counteroffer, walk away"
this should be everyone's playbook for the next 12 months, prices would quickly fall
ellemenopeaqu t1_j5tg52u wrote
Too bad people need places to live?
Delicious_Score_551 t1_j5tprjt wrote
I think this method can work out if you already own a home/condo and are looking to upsize.
For people with an immediate need .. I agree with you - probably not so much.
It is a viable strategy though, especially in a tough market where people are reluctant to buy/sell .. as in .. now. I'll also note that your Realtor is NOT going to advise you to do this as .. they make money if you buy at a high price.
The--Marf t1_j5vxhho wrote
Refinancing doesn't always cost out of pocket money. No cost refinances have been around for ages.
A simple cost benefit analysis will determine if you're better off keeping your rate or refinancing. Math isn't that hard.
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