double post

[AllyandJack]

Ameriquest Mortgage tried to charge a $4000 fee on top of all the other closing costs. They hid it in the final paperwork and we kept trying to find what it was that was causing the final mortgage balance to go up so high. They kept telling us that it was standard for refinancing and that you get penalized for doing so. We had almost 20% in equity in our home and after refinancing, we would have had none. We found another company that just did the 1% origination fee and our balance barely went up at all - like $2000 or something.

That's what these people did! It was Champion Mortgage. I got all the paperwork and saw "Loan Origination Fee: $12,000". I nearly passed out.

I refinanced with Lenox National and paid no closing costs at all - just some escrow money that we paid with our escrow from the previous company. We even got the appraisal fee back at closing. It was a great experience.

I started thinking about all the people who just say, "OK!" to these places. Granted, everyone has a responsibility to educate themselves or consult with someone, but when you REALLY want the house or REALLY need to refi, it's hard to say no.

 

[aprincessmom]

How do home builders justify charging inordinately high prices (and rising by the week) in areas where the economy doesn't support the prices

The biggest cost in housing is the land costs. It's becoming increasingly harder to buy and develop land. When your average cost per lot is over $100K before development, you can't just swallow that cost.

Here in MA, the average cost per lot to develop is well over $250K in many communities, closer to $350K/lot in the more desirable communities before you add in what communities demand on top of that to be allowed to develop the land -- i.e., provide the funds to build a playground at a school or provide monies to fund town studies on growth or fund additional emergency equipment for fire and police departments -- all things my father has been asked to do when approaching a town with a development plan (he does affordable housing, typically developments of 15 lots or fewer). So the builder is working with a substantial per lot cost before he even sells you a house. Add in the materials (typically a 5-10% markup for builder profit) and you have the cost of your house.

 

[chrissyk]

The biggest cost in housing is the land costs. It's becoming increasingly harder to buy and develop land. When your average cost per lot is over $100K before development, you can't just swallow that cost.

Here in MA, the average cost per lot to develop is well over $250K in many communities, closer to $350K/lot in the more desirable communities before you add in what communities demand on top of that to be allowed to develop the land -- i.e., provide the funds to build a playground at a school or provide monies to fund town studies on growth or fund additional emergency equipment for fire and police departments -- all things my father has been asked to do when approaching a town with a development plan (he does affordable housing, typically developments of 15 lots or fewer). So the builder is working with a substantial per lot cost before he even sells you a house. Add in the materials (typically a 5-10% markup for builder profit) and you have the cost of your house.

We're originally from MA, and I get what you're saying. Don't forget the lovely "snob zoning" laws that cause so many issues in the Commonwealth as well. The cost of developing land in MA is out-of-control (that is, when there is actually any land left to develop...). OK, off my soapbox, LOL!

Even if the builder pays a high per-lot cost and a high per-home impact fee, how do they justify raising the prices on these to-be-built homes on a monthly basis? Do their costs go up monthly as well? I just don't see it, at least in my area. There is PLENTY of land here (enough to be building this new community for another 20 years!). The jobs here just don't support those kinds of housing costs. In MA, the jobs DO support those kinds of housing costs. I'm talking MA-like housing costs in a more-or-less average part of FL...it just doesn't jive.

 

[chrissyk]

That's what these people did! It was Champion Mortgage. I got all the paperwork and saw "Loan Origination Fee: $12,000". I nearly passed out.

I refinanced with Lenox National and paid no closing costs at all - just some escrow money that we paid with our escrow from the previous company. We even got the appraisal fee back at closing. It was a great experience.

I started thinking about all the people who just say, "OK!" to these places. Granted, everyone has a responsibility to educate themselves or consult with someone, but when you REALLY want the house or REALLY need to refi, it's hard to say no.

Can you say "loan to own"??? That's what I always think of when I hear "Ameriquest" or "Champion Morgage". I read a GREAT book about these types of lenders a while back, but I can't remember what it was called for the life of me. They target the people who can't get loans elsewhere, or who are not educated about the process in general...so sad

 

[AllyandJack]

Can you say "loan to own"??? That's what I always think of when I hear "Ameriquest" or "Champion Morgage". I read a GREAT book about these types of lenders a while back, but I can't remember what it was called for the life of me. They target the people who can't get loans elsewhere, or who are not educated about the process in general...so sad

That's probably why they were shocked when we told them to go rot. They solicited us with a really great rate. So, we called them....it was an insane deal. A ONE YEAR ARM.

I don't have my name on the loan, but DH makes over 6 figures and has a credit rating of over 750. They told us his credit rating was 624. We couldn't believe it. There was no way. They told us all sorts of stories about how we'd never get approved anywhere else.

When we went with Lenox, they told us his credit rating was 753 and gave us the same rate, fixed.

They're liars and they try to convince you that you can't do any better....sort of like an abusive boyfriend.

Thankfully, we knew enough not to fall for it. They kept calling....for months after that....I finally told them if they didn't leave me alone, I'd report them for predatory lending practices. I told them if they stopped calling, I'd forget this ever happened. Haven't heard from them since.

 

[chrissyk]

Sadly, you are far sharper than the average consumer who falls for their predatory lending practices Most people would not realize that the fees were not normal, and they would believe their "abusive boyfriend"-type lies There is a website out there with HORROR stories of people who did use Ameriquest to refinance/get a mortgage. I read through it a while back, and it was just very sad. People need to educate themselves, but some people just don't have the wherewithall to understand that not every lender is going to be up-front with them.

 

[SeeDisney]

Makes me sad what our children are going to live in???

A two bedroom home for $400K???

It's crazy.

 

[kasar]

I know so many people that are selling their houses here and moving to other places in the country. In some cases, they are able to pay cash for those homes and take an early retirement or find a job that doesn't pay as much because they don't have a mortgage. That may be some of what you're seeing but I agree with you, there are lots of people in WAY over their heads and I worry about what the ripple effect of all those forclosures will be on the rest of the population.

In some cases, people don't need all that house but for some reason the old "starter house" has become a 4 bedroom colonial on an acre lot. That used to be what people aspired to and saved up for. Now, it's first time homebuyers. Just because you CAN qualify for a half-million dollar loan doesn't mean you HAVE to have one. I don't know either, maybe that's just my own insecurities - I was scared to death to buy our first home (at a whopping $98,000). Maybe these people have the right idea - stretch yourself when you're young and stupid and then coast for the rest of your life? Somehow I don't think that's what's happening.

 

[Toby'sFriend]

I'm talking like 0% down, interest-only, negative-amortization, etc. kinds of mortgages

the creative financing has gotten very scary. I have a friend who is a Director at a Mortgage Broker. He told me over the summer that everytime he thinks he has seen it all, somebody comes up with a "new product" that pushes people even further out onto a financial ledge. With interest rates poised to rise over the next couple of years, alot of people are going to get a huge wake-up call.

I drove through a new "Planned Community" the other day. All these people in huge houses ... and from the looks of it, none of them could afford Furniture or Curtains.

 

[Miss Jasmine]

I don't know how anyone already living here can afford a house here, I really don't. I would not be able to afford my house right now. It's scary and sad. I can't imagine how people are getting mortgages unless they are exoctic ones.

 

[AllyandJack]

I know so many people that are selling their houses here and moving to other places in the country. In some cases, they are able to pay cash for those homes and take an early retirement or find a job that doesn't pay as much because they don't have a mortgage. That may be some of what you're seeing but I agree with you, there are lots of people in WAY over their heads and I worry about what the ripple effect of all those forclosures will be on the rest of the population.

In some cases, people don't need all that house but for some reason the old "starter house" has become a 4 bedroom colonial on an acre lot. That used to be what people aspired to and saved up for. Now, it's first time homebuyers. Just because you CAN qualify for a half-million dollar loan doesn't mean you HAVE to have one. I don't know either, maybe that's just my own insecurities - I was scared to death to buy our first home (at a whopping $98,000). Maybe these people have the right idea - stretch yourself when you're young and stupid and then coast for the rest of your life? Somehow I don't think that's what's happening.

DH and I are MA-abandoners. In 2002, when we were looking for a house, we couldn't fathom spending $350,000 on a crapshack with no land. On a whim, we went north....bought 5 acres and built a big house for $260,000. Now....the property was appraised for over $400,000. The new homes in my community are going for well over $400,000. It's having an effect on NH's market and, I'm sure, ME and RI, as well. Pretty soon, there won't be anywhere to go and escape.

We just had our assessments done, too....the assessed value went up over $200,000! I don't even want to see my property tax bill in December.

 

[chrissyk]

I don't know how anyone already living here can afford a house here, I really don't. I would not be able to afford my house right now. It's scary and sad. I can't imagine how people are getting mortgages unless they are exoctic ones.

Yeah, no kidding! DH's friend told him that it cost him like $80/sq. ft. to build here 3 years ago, and now it's like $200+ sq. ft. I know that that doesn't probably sound bad to people in other parts of the country, but it's not sustainable for this area.

Maybe we are missing something here, though? Are there great, high paying jobs that make these housing prices make sense for some people? I was thinking that maybe that new health park that they are going to build is going to bring in high-income people. Still, though, my gut is telling me to wait it out for 2-3 years and then we'll have our pick of loads of houses in that particular area for firesale prices. They are building a LOT of houses in that community for 700K+, and I just don't see the jobs here sustaining those kinds of prices. Here is the REALLY sad thing. The "average annual household income" of this county is 20K HIGHER than the average annual household income of my old town in MA, and MA housing prices are even wilder.

 

[chrissyk]

DH and I are MA-abandoners. In 2002, when we were looking for a house, we couldn't fathom spending $350,000 on a crapshack with no land. On a whim, we went north....bought 5 acres and built a big house for $260,000. Now....the property was appraised for over $400,000. The new homes in my community are going for well over $400,000. It's having an effect on NH's market and, I'm sure, ME and RI, as well. Pretty soon, there won't be anywhere to go and escape.

We just had our assessments done, too....the assessed value went up over $200,000! I don't even want to see my property tax bill in December.

Us too, but we left New England completely for the reasons that you note. Where were we really going to go Sorry, but your property taxes in NH are frightening, and there is no cap on them. At least we can cap ours in FL. NH used to be the place to go to get a better house for cheaper than MA, but the property taxes in NH just about negate that benefit IMHO.

 

[Miss Jasmine]

As far as I know there are SOME higher paying high-tech jobs coming to the area, but I don't think there are that many new jobs for all this development. And yes the medical field is always expanding here because of our ummm retired population. However, I think even higher paying jobs are less here than in most places in the country, and I don't see how even how well-paid workers here could afford a $700,000 mortgage.

 

[Ted and Holly]

In the community that we are building, prices have gone up considerably and they are just building. The reason is pure and simple. Demand. The first 10 houses went on sale for the community and it was not advertised. But they sold them in one day. The next 27 were sold at an increase of $10k in two weeks. When the next (and last) 25 go on sale, I would imagine another increase and a comparable time frame.

Many of our neightbors are going to be from various places "Up North". People all over the Northern part of the country are selling their houses and literally paying cash for (or financing a small amount) their houses here.

We waited a year to buy our house. That year cost us close to $80k for a comparable house.

Ted

 

[mrsltg]

I drove through a new "Planned Community" the other day. All these people in huge houses ... and from the looks of it, none of them could afford Furniture or Curtains.

I don't see a problem with this. You don't have to have furniture immediately in every room, and maybe you get cheap window treatments. When I bought my home we went from a 1600 sq. ft. townhouse to a 3000 sq. ft. single family. I didn't have furniture for a formal living room as well as family room. I also didn't want to buy throw-away furniture as I preferred to just save the money until we could afford what we wanted. A bedroom sat empty for 2 years until the baby arrived. I had curtains and blinds from Penney's that are finally being replaced with wood blinds this Friday - again, had to save to get what I wanted. The point that I'm trying to make is not to assume that people can't afford their home because they don't furnish every room immediately or put up custom window treatments. The house is the big purchase. Everything else is gravy.

Erin

 

[chrissyk]

As far as I know there are SOME higher paying high-tech jobs coming to the area, but I don't think there are that many new jobs for all this development. And yes the medical field is always expanding here because of our ummm retired population. However, I think even higher paying jobs are less here than in most places in the country.

There are definitely a fair number of engineering jobs here that pay the same amount as in other parts of the country. However, most of the engineers that I've met so far don't want to live out there and commute on 95. The jobs are closer to the coast. I was wondering if perhaps they are targeting the folks in the medical field here...maybe that's truly what it is.

BTW, if you haven't gone to the model homes in the nicest part of that new development, go...it's worth it for a laugh. I've never seen houses like this in all of my life. I felt like I was on an episode of "Cribs" or something Oh, and the houses were RIGHT up against 95...so close, you can hear the traffic from your pool...LMAO!!

 

[AllyandJack]

Us too, but we left New England completely for the reasons that you note. Where were we really going to go Sorry, but your property taxes in NH are frightening, and there is no cap on them. At least we can cap ours in FL. NH used to be the place to go to get a better house for cheaper than MA, but the property taxes in NH just about negate that benefit IMHO.

They are pretty scary, but to have 5 acres and a 3,000 sq ft house in MA, my property taxes would probably be the same in MA and the house would have cost me over $800,000. I have relatives in Lynn (City of Sin) who have a house that is about 800 sq ft and they have a lot that's smaller than my house (about 2,400 st ft). Their property taxes are exactly half of what I pay. So, when I think about that, I don't get too upset.

But, December is always scary...December is when they "make up" the full tax bill since June's is set at the previous year's amount. That's the worst....if it was quarterly, it might be better, but to have that BIG bill in December is just frightening.

 

[The Mystery Machine]

That has happened in parts of TX, and I feel like it could happen here. Maybe I'm wrong, though.

Yes, in Frisco TX that is happening. Although I will admit while the traffic totally stinks, the area is very nice. I drive there to shop sometimes.

Crazy, huh? I don't know how builders are allowed to get away with it?

This house was overpriced by 80,000....Just have to be smart enough not to pay it.

 

[Miss Jasmine]

There are definitely a fair number of engineering jobs here that pay the same amount as in other parts of the country. However, most of the engineers that I've met so far don't want to live out there and commute on 95. The jobs are closer to the coast. I was wondering if perhaps they are targeting the folks in the medical field here...maybe that's truly what it is.

BTW, if you haven't gone to the model homes in the nicest part of that new development, go...it's worth it for a laugh. I've never seen houses like this in all of my life. I felt like I was on an episode of "Cribs" or something Oh, and the houses were RIGHT up against 95...so close, you can hear the traffic from your pool...LMAO!!

Well true the engineering jobs are going to pay close to other parts of the country because of recruiting factors. Have you read the articles lately about not being able to sustain a young professional population since this place is boring. Money is important because of this.

Hmm I haven't gone in that development for some time even though we are only two developments south. I'll have to go check it out this weekend.