All Forum Posts by: Aaron Hunt

Guys, thanks a lot for the feedback.

 @Lien Vuong I am not paying for these points out of pocket (I am rolling it into the loan.), so technically, I cannot invest it anywhere else, tell me if I am incorrect in thinking but I am borrowing their money and lowering my rate.

@Jesse Rivera The way I am looking at it is, the lower interest rate is reducing the interest I am paying, so when I sell in about 10 years (if I sell) I would have ended up paying less interest. Does this not make sense ?

Guys

What am I overlooking in my calculations ??? Please help.

Question on wether I should buy points to lower my refinance rate OR not.

O/S Loan of $502705

I have two options:

Option 1 - Refi Rate: 2.375 (No points, all closing costs paid by lender)

The loan will be for $502705

Option 2 - Refi Rate: 2.125 (Points Cost $5676 + all closing costs to be paid by me)

I plan to roll in all the costs into the loan, the loan will be for $502705 + $5676 + $3000 = $511381

According to my math

For option 1 - Monthly payment is $1,953

For option 2 - Monthly payment is $1,922

And

over 10 years I pay lower interest by $9927

And if I end up keeping the property for 30 yrs

I end up paying lower interest by $20,011

There is no outflow from my pocket, Why would I not buy down the rate and pay for the points and save?

Real estate in Bay Area has always been an “local” phenomenon. I have lived in the Bay Area since 2000 and have seen the dot com boom and bust, the 2007 RE boom and bust and the unprecedented 2010 to 2020 bull run both in the RE and the stock market.

In my opinion, so far the Bay Area has been a juggernaut mainly due to the innovation and jobs, with Covid and many companies providing flexible/remote working options, the demand for housing “can” decrease a bit in the bay area but it is not fully clear yet by how much. I would not expect the prices to drop with any significance, in fact they have been going up in most Bay Area locations except SF (that I know of). In the short term, I am a bit bullish on the house prices in the Bay Area mainly because, of the low interest rates (easy money) have been driving the demand and this will most probably be the case for the next couple of years and mainly will drive prices up for the lower to mid level homes, the more affluent homes may see a bit of softness mainly because a good chunk of folks who usually buy those houses are tech and they are probably considering moving out of the bay area. In summary you can expect some softness in the upper tier houses in SF and increases in prices for the short term for houses in some specific Bay Area locations.

If I were in the market to buy a primary residence, where I plan to stay for the next 10 - 15 years and I have ascertained a location and my basic finances are in order, I would go ahead and buy. It is probably the most basic advice but in my opinion there is a higher probability that you will come out on the right side if you buy for the longer term, rather than not.

@Account Closed thanks, this is not in SF, it is in eastbay. Thanks for the tip, I plan on having a pet addendum and will make sure that I get specific about the pet related items. 

@Dustin Allen Thank you for the guidance, I meant It as only for informational purpose and not as a decision making criteria, thanks.

Hey Guys, I have a question.

I am renting my property for the first time and I have a decision to make.

The property is a well maintained, well appointed, desirable Single family 2Bed/1Bath house with a fenced backyard.

I have to choose between two tenants. Both are highly motivated to rent the house (12 month lease).

Tenant 1:

Pros:

• Two people renting
• Combined Income is about 4 x the rent,
• Good Credit and references
• No pets

Cons:

• One holds a job in the restaurant industry and the other is a hairstylist, so jobs can be impacted by this Covid economy

Tenant 2:

• Two people renting
  
• Individual Income (per person) is about 4 x the rent,
  
• Excellent Credit and references
• Stable jobs (One Works for the city, the other for an online company)

Cons:

• They have two medium sized dogs. (They say the dogs are house trained)

Now, I do not know how bad it can get if you have two dogs, so I am looking for guidance.

Thank you for taking the time.

Thank you @Peter Walther:

- So in essence would it right to say that the "title agent and a title underwriter" arrangement is similar to a Loan Broker and Lender (underwriter)?

- "a title policy does not guarantee you have a "clean title", it is a contract of indemnification where the underwriter agrees to reimburse the Insured ". Maybe I am confused here but this sounds so much like the "Owners Title Insurance" When you refer to "title policy" is it the same ?

@Dennis Maynard Sorry but when you say "Typically each party has a share of the title policy," Are you referring to  the lender and the buyer ?

@Maria D'Aura Thank you, yes, I do not plan on making any changes, just trying to understand. These things are so intertwined, it is hard as a laymen to know things no matter how much you read up. I am glad I am able to be educate myself. 

@Dennis Maynard Thank you, I have learnt so much on this topic :). 

A question that begs asking is, if the Title company guarantees no encumbrances on the property, then an owners title Insurance sounds superfluous... no ? 

I searched up on the forum and everyone recommends buying the owners title Insurance though? So, I am probably going to go ahead and do the same but, seems rather redundant if the title company is already charging you to do the verification.