maybe she just has a deep throat? it's always we welcome surprise

So both home prices and mortgage rates are pretty much in the toilet right now, and homes that were $700k to $900k range four years ago are in the $400-$500k range right now.

That's still a metric shitload of money, and it would mean taking out a loan (something I swore I'd never do again) but I'm becoming increasingly tempted by the idea...

*

The miata was driving weird on the way to the shop and when I got here I checked under the hood only to come up empty handed.

I started it back up looking for the usually problems, but found nothing. As I sat in the car I was playing with the heater control and found that with it on, it idles sloppy. So then I turned on the headlights to see if it made it worse and it almost died. lol

Battery is out being charged and I noticed the belt is super loose on the alternator. Hopefully a couple hours on the charger and tightening the belt is all that's wrong.

Going to look at a 2005 Legacy GT this weekend. Its the 1 color I didnt want, but if they'll cut me a deal I might just buy it. I really need a dependable DD again.

This is very true. At current rates, you can probably get a 30-year fixed mortgage for $400K for the price of a decent rental in Carlsbad. This is the logic that prompted me to buy a house last year.

Come join us, Joe. Sacrifice yourself to the gods of banking. Debt is good.

Embrace the suck.

That's kind of where I'm at right now.

Even I were to put only 20% down, the mortgage payment itself would still be less than the rent on my one bedroom apartment. Obviously you have to factor in taxes, HOA fees, Mello-Roos and whatnot, but a lot of that is deductible. So the first year, figure $10k in interest and $6k in taxes, written down at my 22% net personal rate (1040 only, I don't get to make deductions on schedule SE) and that's effectively $290 a month off the gross, which brings the bottom-line to just a few hundred more than rent.

Goddamn it. Fucking bullshit. I can't even get financing on a $4000 motorcycle, how the fuck am I supposed to buy a house like I plan in the next 2 years. I have awesome credit, but if I recall I have had people tell me in the past I don't have sufficient credit history, I make decent money, but not good at the moment. I drive a piece of shit car that is falling apart, I live with my dad, have bills out the ass... I just can't fucking get ahead or get on my own two feet. Unless my work allows me to go flat rate in the next few weeks I'm going to have to look elsewhere. I'm not being the shop bitch for 1/4 the money that some of the less experienced guys are making. It's goddamn bullshit, and I'm sick of not having anything, not being able to afford anything, and not being able to get credit for anything. I guess I'll be 30 in my dads house, with no wife of kids, because I refuse to have a relationship while I'm still in my dads house (at fucking 25). Oh well, enough of me bitching, I'm gonna scratch up enough money to at least go have a little fun and eat some sushi, before I have to get up and go to fucking work in the morning for my pitiful paycheck...

Uhm, yeah- I have no idea why you'd be having these problems.

I do have bills out of the ass, but they are not so much that I can't pay them. Just on my temporarily shit salary, they take up a large fraction of my check. They aren't even "good" bills, or nice things. Just doctor bills, student loans, cell phone, two credit cards.

I understand what you're saying. But when someone looks at a credit report, all they see is "Ah, this guy has this many open lines of credit, owes this much money, has had this many late payments, etc..."

In a perfect world, you will have only one credit card, with a $10,000 or so limit, have had it open for ten years, and have no balance on it whatsoever.

And you'd have a history of having had loans in the past (eg: student loan, car loan, etc) but of having paid them off quite a while ago, with no late payments whatsoever, and having not opened any new credit lines of any kind within the past few years.

That kind of history is how you get into the 800 club.

It's hard when you're young. Believe me, I remember. Not even Mark Zuckerberg had an "excellent" credit rating when he was 25, and he was already a billionaire.

Do they figure debt to income ratio into personal loans? Sounds like your cashflow is the issue, not your credit history.

If you borrow $300K, at about $1520/month P+I, that first year interest will probably be more like $13-14K.

I know utterly nothing about the market where you are, but I have a strong aversion to condo/HOA arrangements. We had a condo for quite some time, and I had to choose between selling for a loss and creating "Connecticut Man Kills 47 in Civic Improvement Attempt" headlines. Nothing like having your finances/future tied up with a bunch of feckless mouth-breathers.

One word: Equity.
Kinda got to agree with Joe here, you have to get your bills payed and move out before spending on a motorcycle, sry. I do see your point though.

An important disclaimer is that everything I wrote above refers merely to one's credit rating, which is only one factor that goes into a lender's decision-making process.

The credit rating itself does not consider debt:income ratio, since the credit-rating companies do not know what your income is. The only things they see are your credit accounts, which is everything from credit cards to car loans to mortgages.

To look at the specific example of a credit card, for instance, the factors they consider are:

• What is your credit limit, and relative to that, what is your average balance? You want the largest spread here possible. (eg: very high limit, very low average balance.) It doesn't matter if you make your monthly payments if you consistently have a $4k balance on a $5k card- that'd bad.
• Assuming you do carry a balance, do you have any late payments? It doesn't matter if you pay just the minimums or if you're actually paying down the balance, they just care about timeliness.
• How many credit cards do you have? More is not better.
• How old are your credit accounts? An account which you have had open for 10 years is better than an account that's only a year or two old.
• How recently have you applied for a new account? Recent activity is bad.

Now, the actual lender will of course take into account debt:income ratio. You could have a perfect 850 score, but if you're making $60k a year and applying for a $600k mortgage, that's probably not going to happen. Three years ago, yes. Today, no.



Before I moved to SoCal I'd have agreed with you. I grew up in a small town in FL where nobody even knew what an HOA was, and the very concept sounded evil. And even when I lived in Cinci, it was the sort of thing you only saw in gated communities.

Out here, however, an HOA is definitely your friend. North County is a massively polarized market, with amazingly sharp contrasts between the "nice" communities with HOAs, and the "other" communities where the houses are literally falling apart. I personally am not all that fanatical about whether my neighbor's lawn is 1.05" tall vs. 1", but in terms of appreciation and resale value, you need to be in an area with a strong HOA. Those were the ones that appreciated the fastest, and subsequently depreciated the least, over the past 10 years.



This is true.

The other thing about mortgage-funded housing (which I must admit, occurred to me only recently) is that you're betting with someone else's money.

I mean, let's say that I'm a day-trader with $250k in my account. For the most part, I'm limited to trading just that $250k. I could open a margin account obviously, however that's generally considered an unusual (and risky) proposition, generally reserved for the elite.

But within the housing industry? Hell, every single homeowner trades on margin. If I borrow $300k to buy a $450k house, I get to enjoy the appreciation not just on the $150k that I put down, but on the whole $450k.

(This presupposes, of course, that we are near the bottom of the market, which I believe we are.)

Even if I paid my bills off, I couldn't move out, unless I rented an apartment, and I almost refuse to pay for something I can never own, and will not enjoy living in. I only have about $3k in debt, excluding my $13k in student loans left. Only have two open credit cards, each only have around $600-$800 on them. I also have two retail store cards, Best Buy and Sears, each with around a grand on them. So I don't see how that little debt could really screw me that badly. My yearly income at the moment isn't impressive, so that may have a little to do with it too. But my credit score is in the mid 700's, so I was hoping that would be enough. I guess not. I'm going to open a savings secured loan ASAP and start building another credit line that I can make good payments on and pay off.

Too bad there aren't good faith loans. I will make all of the payments, since they would only be like $120 a month for 4 years, or $140 for 3 years. Even if I lost my job, I could scratch that little up from under a couch or skim from a washing well or something.

So you have four revolving credit accounts. Why so many? (I'm asking this from the perspective of a credit-rating agency.)

Also, it's not the actual amount on each account that matters, it's the average balance as a proportion of the limit. Carrying a $5,000 balance on an account with a $25,000 limit is not nearly as bad as carrying an $800 balance on a card with a $1,000 limit.

I thought more accounts would be better for building credit. Which I intended to keep them all paid off originally, but over time I have gotten them above 50% of the limit, which is a low limit, under $1000 on the two credit cards, and a little more on the retail cards. I guess that should really be my first target is getting them paid off, or at least to 25% or less. I do for sure need to pay off the Best Buy card with my TV on it. I intended to pay it off withing a few months, but it's been over a year now and I'm still only paying a little over the minimum. At which rate it'll be paid off in about 20 years...

I can see where that would look bad to someone loaning me money, even though my credit score is good, or well above average.

I need to get real with my budget. I'm slacking. I'm not buying anything anymore. Must SAVE!

does your current crib have a garage/shop? I'm just worried about your purty paint in de snowz.

RE credit and home ownership: when I bought my house, interest rates were way up. I got 9.something % variable. After a while, rates started dropping. Rather than take the difference and spend it, I still paid the same payment as before.

Rates continued to drop, but I kept up the payment as originally. Paid off a 30 year in just over 21, and we would have done it at 19 but the hospital bill put us a little behind the curve.

NA6C, pay off those damn cards, and stop buying toys. When you're all paid up, you can think about new stuff.