IHB News 12-11-2010 | Irvine Housing Blog

HELOCs were often used to pay off credit cards. It seems logical to pay off high interest debt with low interest debt, particularly when you get a tax deduction on the low interest debt as well. Unfortunately, any way you look at it, Ponzi borrowing is stupid. Does it make sense to pay for consumer goods with 30-year debt? That is the net effect. When you think about it, does it make sense to finance any kind of consumer debt? I don't think so.

The owner of today's featured property has owned it for almost 20 years. She only sipped kool aid during the bubble, but she still managed to pull out nearly $100,000 for purposes unknown.

This property was purchased for $142,000 on 1/25/1991. The original mortgage information is not available, but it was likely a $113,600 first mortgage and a $28,400 down payment.

On 3/28/2002 she refinanced with a $125,000 first mortgage.

On 8/5/2002 she refinanced again with a $133,750 first mortgage.

On 10/20/2004 she refinanced with a $151,577 first mortgage.

On 1/25/2007 she obtained a stand-alone second for $50,000.

Total property debt is $201,577.

Total mortgage equity withdrawal is $87,977.

By Irvine standards, taking out less than $100,000 makes her a responsible homeowner — which says something about how low the bar is here.

Irvine Home Address … 195 BRIARWOOD Irvine, CA 92604

Resale Home Price … $339,990

Home Purchase Price … $142,000

Home Purchase Date …. 1/25/1991

Net Gain (Loss) ………. $177,591

Percent Change ………. 125.1%

Annual Appreciation … 4.5%

Cost of Ownership

————————————————-

$339,990 ………. Asking Price

$11,900 ………. 3.5% Down FHA Financing

4.71% …………… Mortgage Interest Rate

$328,090 ………. 30-Year Mortgage

$68,092 ………. Income Requirement

$1,704 ………. Monthly Mortgage Payment

$295 ………. Property Tax

$0 ………. Special Taxes and Levies (Mello Roos)

$57 ………. Homeowners Insurance

$308 ………. Homeowners Association Fees

============================================

$2,363 ………. Monthly Cash Outlays

-$277 ………. Tax Savings (% of Interest and Property Tax)

-$416 ………. Equity Hidden in Payment

$21 ………. Lost Income to Down Payment (net of taxes)

$42 ………. Maintenance and Replacement Reserves

============================================

$1,734 ………. Monthly Cost of Ownership

Cash Acquisition Demands

——————————————————————————

$3,400 ………. Furnishing and Move In @1%

$3,400 ………. Closing Costs @1%

$3,281 ………… Interest Points @1% of Loan

$11,900 ………. Down Payment

============================================

$21,980 ………. Total Cash Costs

$26,500 ………… Emergency Cash Reserves

============================================

$48,480 ………. Total Savings Needed

Property Details for 195 BRIARWOOD Irvine, CA 92604

——————————————————————————

Beds: 3

Baths: 1 full 1 part baths

Home size: 1,135 sq ft

($300 / sq ft)

Lot Size: n/a

Year Built: 1978

Days on Market: 40

Listing Updated: 40492

MLS Number: S636940

Property Type: Condominium, Residential

Community: Woodbridge

Tract: Vg

——————————————————————————

Probably the nicest 3 bedroom upper unit ever offered in Woodbridge's Village Green. Beautifully remodeled kitchen with nice appliances and fixtures, plus lots of tile and designer carpets, fresh paint, new mirrored wardrobe doors, etc.

Probably the nicest 3 bedroom upper unit ever offered in Woodbridge's Village Green? Probably the dumbest realtor comment ever written in the MLS….

2 thoughts on “IHB News 12-11-2010”

newbie2001 December 12, 2010 at 12:43 am

Other than older major urban area, today’s “home” would qualify as poor people’s housing in 80% of the US.

Due to the demand, the lower end has dropped to a new equilbrum. The higher end has a long way to go. One govt program to keep the high-end up can be to allow crime to increase in the lower to middle end which can also be use to support a tax increase. Killing two birds with one stone.

Govt intervention in the market is so pervasive that it is part of the forces at work in the market.
Anonymous December 13, 2010 at 12:07 pm

Home seller love letters advised in the WSJ
Desperate Times, Desperate Measures
How do you sell a house in this market? By being really creative.

http://online.wsj.com/article/SB10001424052748703572404575634710688904310.html?mod=WSJ_newsreel_personalFinance

Comments are closed.