[Xenocide]

How long did it take you to get a decision from the bank on your offer??

I made an offer last Wednesday on a property. Bank came back on Thursday saying they had multiple offers and request my highest and best, to which I submitted the exact same number. Hoping my offer looks attractive to the bank since I have no other liabilities contingent on closing this property, and I put down 2% in earnest money.

Still haven't heard back, realtor says there is nothing we can really do since it is on the bank's timeline. I understand that, but it is a lot of cash to have hanging out there.

[Wathnix]

I think the timeline is going to be different with every bank and maybe every case. You are going to have to chillax on this one. Personally I would not have put down more than maybe a grand for the earnest money, you don't want the bank to hold more than what you can comfortably do without for a few months.

I'm guessing that what you are offering is substantially less than what the bank is owed on this property, so they will be in no great hurry pull the trigger on this, since they are unlikely to recover the difference from the previous owner.

[Mr. Roboto]

I've been in the market for a house for the last 6 months or so. Bank owned properties are a funny thing. Around here, it used to regularly take 30+ days to hear back from the bank. However, they just passed a law that said banks need to get back to all offers within (I believe) 10 days. Basically, there's nothing you can do but sit tight. As far as the deposit goes, I never put more than 1k down. Also, they don't take your money until your offer is accepted. When I put an offer in on a house, my realtor held my check until i heard back from them. They accepted another offer, so she gave me my check back, but had they accepted mine, they would need the deposit money within 48 hours. Is this not the case with you?

[Xenocide]

I put down a few grand, the realtor just holds it in earnest.

Its not like I need the money, if I needed it, I wouldn't have put it down If putting down 20% for earnest gave me a leg up, I would have even done that.

[Niku-Sama]

holy crap 20% is alot.

any way is what you guys say is true about the banks now have a limite and need to get back within 10 days then thats cool. we're still cruising for the right loand and realator right now. having a hard time finding people who arent scum bags but at the same time finding alot of people that wont even give us the time of day.

you'd think after increasing our income over 50% in a year have awsome credit scores and a decent ammount of money readily available some one might work with us but NoooooOOOOooooo......

[Quigsby]

Originally Posted by Niku-Sama

you'd think after increasing our income over 50% in a year have awsome credit scores and a decent ammount of money readily available some one might work with us but NoooooOOOOooooo......

Yeah, banks are odd. They want your money but don't even want to work for it now. The lender I just refi'ed through was pretty great and last week I referred two co-workers to her.

[Mr. Roboto]

I am in the opposite situation... been preapproved and I have a good realtor... I just cant find the right house!

[Niku-Sama]

well so your not quite to that situation, if your talking about buying a house from a bank the time frame for them to get back to you with an acceptance or counter offer is what we are talking about

[gregmacknass]

Once they have your money, you're bent over the fence (if you end up buying the property or not). Banks are never in a hurry to give money back when it is owed, only to take it when it is owed to them. The way I have looked at possessions (be it a house or other goods) is if you can't pay for it in cash, then you can't afford it at all. If you think about the fact that a house that costs $100,000 with a standard 30 year loan will cost you about $300,000 in the long run, you'd have to be crazy to get a loan. If you save $1000 a month for 8 years, you could pay for it in 8 years, instead of being in debt for 30. But this is just my opinion, and take it as you may.

[madhatter256]

Originally Posted by gregmacknass

Once they have your money, you're bent over the fence (if you end up buying the property or not). Banks are never in a hurry to give money back when it is owed, only to take it when it is owed to them. The way I have looked at possessions (be it a house or other goods) is if you can't pay for it in cash, then you can't afford it at all. If you think about the fact that a house that costs $100,000 with a standard 30 year loan will cost you about $300,000 in the long run, you'd have to be crazy to get a loan. If you save $1000 a month for 8 years, you could pay for it in 8 years, instead of being in debt for 30. But this is just my opinion, and take it as you may.

Unfortunately 99% of the population doesn't have that kind of money.

[PanteraGSTK]

Originally Posted by gregmacknass

Once they have your money, you're bent over the fence (if you end up buying the property or not). Banks are never in a hurry to give money back when it is owed, only to take it when it is owed to them. The way I have looked at possessions (be it a house or other goods) is if you can't pay for it in cash, then you can't afford it at all. If you think about the fact that a house that costs $100,000 with a standard 30 year loan will cost you about $300,000 in the long run, you'd have to be crazy to get a loan. If you save $1000 a month for 8 years, you could pay for it in 8 years, instead of being in debt for 30. But this is just my opinion, and take it as you may.

Yeah...if only it were actually that easy. You are correct, but I'd like to own a house before I turn 40.

[gregmacknass]

Originally Posted by PanteraGSTK

Yeah...if only it were actually that easy. You are correct, but I'd like to own a house before I turn 40.

I was just giving rough figures. If you are really serious about buying a house with cash, you could do it in 5-6 years taking that same amount and investing it properly (but at higher risk to your money). This way you will own a house by 40 instead of "own" a house (more like a mortgage), not to mention paying 1/3 the cost using a mortgage.

[PanteraGSTK]

Originally Posted by gregmacknass

I was just giving rough figures. If you are really serious about buying a house with cash, you could do it in 5-6 years taking that same amount and investing it properly (but at higher risk to your money). This way you will own a house by 40 instead of "own" a house (more like a mortgage), not to mention paying 1/3 the cost using a mortgage.

True, but think of it this way. Say a person pays $1000 per month for rent, and is able to save an extra $1k per month for a house. Instead of that $1k for rent literally going nowhere you could get a 30 year mortgage that has that same $1k/mo payment as your rent, but instead of saving $1k/mo to buy a house, you just double your payment.

That seems like a much better way of paying off your house quickly.

[Seebs]

Originally Posted by PanteraGSTK

True, but think of it this way. Say a person pays $1000 per month for rent, and is able to save an extra $1k per month for a house. Instead of that $1k for rent literally going nowhere you could get a 30 year mortgage that has that same $1k/mo payment as your rent, but instead of saving $1k/mo to buy a house, you just double your payment.

That seems like a much better way of paying off your house quickly.

There are programs that work exactly like this... Instead of making one monthly payment; some people (that have the means) get on a "bi-weekly" plan where they make mortgage payments every two weeks (not twice a month - every two weeks is 28 payments in a year whereas twice a month is only 24 payments in a year) and from those two payments, one goes towards the normal payment schedule and the second one goes straight towards the prinicipal... They lower the principal faster and therefore the interest accrued is less and the total debt is paid in less than half the time it would take with normal payments.

[Mr. Roboto]

Originally Posted by gregmacknass

Once they have your money, you're bent over the fence (if you end up buying the property or not). Banks are never in a hurry to give money back when it is owed, only to take it when it is owed to them. The way I have looked at possessions (be it a house or other goods) is if you can't pay for it in cash, then you can't afford it at all. If you think about the fact that a house that costs $100,000 with a standard 30 year loan will cost you about $300,000 in the long run, you'd have to be crazy to get a loan. If you save $1000 a month for 8 years, you could pay for it in 8 years, instead of being in debt for 30. But this is just my opinion, and take it as you may.

300K?? it would cost you about 155K with a conventional 30 year loan at the current fixed rates. Plus the money you are throwing away every month renting can be applied to the mortgage. If you rent for 8 years at 1000 a month, you will spend 96K just in rent alone. so 96K + 100K to buy a house cash (assuming you can save that much) and you are in to the house for 196K (essentialy, since you wasted 96K renting. Or, you could buy it today and only be into it for 155K if you carry your loan to term. Plus, around here, there's no way you're buying a house for 100K. An average home in MA is around 300K, so you will be saving an awful long time to save up to buy a house cash here. Unfortunatley, for most people, financing is a necessary evil when it comes to home ownership.

The best thing you can do is throw an extra 100 bucks a month at your mortgage payment, since it all goes to the principal. You pay a 30 year loan off in 25 years or soby doing this, and you will save tens of thousands.

[gregmacknass]

Originally Posted by Mr. Roboto

300K?? it would cost you about 155K with a conventional 30 year loan at the current fixed rates. Plus the money you are throwing away every month renting can be applied to the mortgage. If you rent for 8 years at 1000 a month, you will spend 96K just in rent alone. so 96K + 100K to buy a house cash (assuming you can save that much) and you are in to the house for 196K (essentialy, since you wasted 96K renting. Or, you could buy it today and only be into it for 155K if you carry your loan to term. Plus, around here, there's no way you're buying a house for 100K. An average home in MA is around 300K, so you will be saving an awful long time to save up to buy a house cash here. Unfortunatley, for most people, financing is a necessary evil when it comes to home ownership.

The best thing you can do is throw an extra 100 bucks a month at your mortgage payment, since it all goes to the principal. You pay a 30 year loan off in 25 years or soby doing this, and you will save tens of thousands.

What really matters is the interest rate that you get for you your loan, and not just the standard interest rate but the compound interest period (ie monthly, quarterly, twice yearly, or yearly). You can convince yourself that the extra 1200 a year is going to make a difference in the long run, but it is more like a 1-2 year difference vs. a 5-10 year difference in your loan duration (and many low interest loans penalize overpayment/early payment). If an average house is 300k in your area, then the cost of living is very bloated and I suggest that you relocate. If you are paying $1000+ for rent, then you are either living in a nice house or painfully holding your ankles in an apartment/condo. And to be quite frank in the matter, if you don't have $1000/month disposable income, then you really cant afford a house anyways.

[Mr. Roboto]

Originally Posted by gregmacknass

What really matters is the interest rate that you get for you your loan, and not just the standard interest rate but the compound interest period (ie monthly, quarterly, twice yearly, or yearly). You can convince yourself that the extra 1200 a year is going to make a difference in the long run, but it is more like a 1-2 year difference vs. a 5-10 year difference in your loan duration (and many low interest loans penalize overpayment/early payment). If an average house is 300k in your area, then the cost of living is very bloated and I suggest that you relocate. If you are paying $1000+ for rent, then you are either living in a nice house or painfully holding your ankles in an apartment/condo. And to be quite frank in the matter, if you don't have $1000/month disposable income, then you really cant afford a house anyways.

I wasn't speaking to my situation, but rather generalizing. And as far as interest rates, I ran all my numbers with current rates I was approved for with accurate compounding. All of the standard mortgage calculators will do this for you in great detail.

Where are you from? You seem to be shoehorning your advice based on prices wherever you live, and dismissing everywhere else. Home prices vary a great deal across the country, as do tax rates, so what works for you may not work elsewhere. And why should I relocate? I have grown up my entire life in new england, have a great job, and am surrounded by family and friends. If I move for the sole reason of saving money, then I am not living life the way I intend to.

And if you don't believe me about the extra 1200 a year thing, play with this calculator:
http://www.dcu.org/onlineserv/calcul...=www.dcu.org_1
I entered a 200K loan with a 3.85% conventional 30 year loan. An extra 100 a month will enable you to pay off your loan 4 years 11 months early, and will result in a $25,500 savings. So yes, I'd venture to say measly 1200 a year extra in payments makes a substantial difference. And no conventional loan will penalize for early repayment. Yes, some of the specialized loans will, but these are designed for people who can't come up with an adequate down payment or closing costs.