unless you actually want to find a house... Most folks don't want to "settle". That means you're either increasing your budget or lowering your expectations. Honestly, the agent doesn't care. Most of them are just trying to help you find a house that you want to buy.
What sucks about the market right now is most people are forced to take a big gamble one way or another. Option 1: over extend your budget to “date the rate” and get into a house at the risk of being house poor. Option 2: Continue to rent while hoping for prices to go down. This creates the risk that prices continue to go up and you’re never able to buy. Pick your poison. Neither choice is right or wrong, but it’s tough to accept those are the only options for most people.
Never makes sense to rent, always makes sense to buy. Current rental: $2200/month Buying the exact same house at today's interest rates: $5080 month after $90,000 down payment and $12,000 in closing costs. And only $500/month of that PITI goes towards principle. $4500 is lit on fire in interest, insurance, taxes, and mortgage insurance. Not to mention maintenance and repairs. Renting is looking pretty good.
And u save and invest those 3000 dollars a month difference + 100k of the down payment. After 10 years you got more than 700k. A big downpayment that would allow u to pay cash for a house ( or a big downpayment when interest rates are lower for lower monthly payment)
I got in an argument with a real estate agent about “date the rate”. I told him you’re guaranteeing people that their home value will rise over the next few years and considering how overpriced homes are now thats not very likely.
@@Hammer.J.Helmer because nobody in America will be able to afford a home the entire industry will die. Do you really think $450k is a reasonable price for a 1300 sq ft rancher that needs repairs? Are you like 19 or something??
@@eyeinsee What I think doesn't matter. The market dictates prices - supply and demand. The bottom line is that there is no influx of supply on the horizon. The number of transactions is way down, but that only adds to the supply issue. Somebody is buying the homes.
Kinda hard to look at house prices since forever in the US and see that they have only gone up over time and think that they’re gonna go down. Also with high interests rates the government can’t stay being the government.
it's thrown around because it's true. This guy is honest... honestly wrong. He believes what he says, but it doesn't mean he's right. Rates will fall again - and home prices will go up when they do.
@@candelariaw1668 people were going over asking price because demand far outstripped supply when rates were low. That will happen again as rates fall, but hopefully not as severe.
Thank you for being sensible. I think people often forget that real estate agents are sales people. They will tell you anything to sell you a house. A car salesman can quite literally lie to you about anything regarding a car to sell you it, and it's protected by law. Missouri real estate agents lost against a billion dollar lawsuit for fraudulent practices. People need to be very careful about the information they take in and believe. Even though I fully preach and believe the same thing you say, it's still wise to shop around for information elsewhere.
When we did new construction at the end of 2020 into 2021… we kept our design selections minimal to avoid over inflating the final cost of the home in case another 2008 housing crash occurred!!
And you can wear an aluminum foil hat to block the brain reading waves. We absolutely will not see 2008 happen again, we are in a totally different market and economy.
It is very expensive to refinance and the cost will take you years to break even. You essentially pay all those closing cost twice. And paying for a 2-1 buy down is foolish. If the seller is offering it to you, use that amount off the purchase price so your amount financed is lower. You will have more equity if you are able to refinance.
@@drwayne_carter9115 Yep sinking you back into the fact that if you don't stay at least another 7+ years you're just burning far more money than you would've renting.
@Hammer.J.Helmer those that are buying these properties way above where they should be will eventually run out of money if their intention is to just resell. Look at what happened to Opendoor and Zillow.
@@dsc-nr5zy you don't get it - they are not buying "above where they should be'. There is a housing shortage, an inventory shortage, and no reason AT ALL that prices will drop over the next 5 years. These are the prices. And that makes them exactly where they should be. Thank your gov't for driving them up so quickly with the reaction to the pandemic... what should have taken a decade took less than 3 years. But now that they are here, they are here to stay.
Really where are investors putting their cash? Isn’t it crazy how mortgage rates continue to rise with higher imports and declining exports, but the FED is yet to lessen cost. Something will eventually break if they keep raising interest rates and quantitative tightening.
I concur with your comment, personally I've avoided drawbacks of uncertain times by simply following guidance from a reputable advisor, and have been able to increase my savings by at least 300% since late 2019, just before rona out-break, summing up nearly $1m after subsequent investments to date. I'm semi-retd now, and only work 7.5 hours weekly.
Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
@@Pamela.jess.245 that has got to be the worst attempt do people actually fall for this like you are both Total strangers and someone who invest only has CZcams accounts for 4 months
I remember my parents taking out a HELOC around 2005. I was just a college kid and I asked what they needed the money for. They couldnt tell me lol. When the recession hit things got really bad. I learned a lot from their mistakes
You are the only real estate agent that is honest. I think this going to bring you lots of business! I will hit you up when I'm ready to buy in east phx
Please make an episode on what it exactly means to refinance, and when is it a good time to refinance, and if you refinance can you refinance again if the rates go down again or do you have to wait like a year or so ?
Refinancing is basically trading in your current mortgage for a new mortgage but with the latest interest rates and updated value of your home. The only limit to refinancing is banks won't allow you to refinance until you have at least 20% equity built up in the home. So it makes sense to refinance if rates are at least 1.5-2% lower than your current mortgage and if you have 20% equity in the home. You can refinance many times but keep in mind every time you refinance you have to re-pay closing costs.
Biggest reason not to buy home is when you buy home then its highly likely your home will be far from your work locaton and you need to drive miles and miles every day to visit office. Non of the jobs are stable and there will be better pay at different location. You can change rented apt from one location to another just like that and can stay very near to work location. You can save tons and tons of time and get peace of mind and apt people will take care of everything for your residence. At least you will have contact with human when you live in apt but independent houses are like living in desert area.
Then you are renting a property that is way below what you are considering buying. Do you think that landlords lose money on properties? That they subsidize you and they pay the taxes and interest so you don't have to? Yeah...
@@InternetUser._ he's definitely losing money. See, that's how money works. If he is renting it to you at 20% below market average, he's losing that 20%.
The one that got me was that my mortgage lender said they service 99% of their residential mortgage loans and that within 5 years they will waive fees for refinancing if rates drop. My mortgage got sold to another company before I made my first payment.
It's a tough call when it comes to when to buy a house because with rates "high" (which is relative to what you're used to) the payment on the home is higher BUT when rates are very low home prices tend to go up. This means property taxes go up and so does the insurance bc of replacement value. BUT (again) this is a cost that can be written off on taxes. Whereas your mortgage cannot. So, what's better to do. Well, always run the numbers because refinancing costs money and you have to be sure you'll qualify when you go to do that! I think I'd rather pay a little more for the house and write off the taxes etc bc as rents go up and houses cost more in the long run it'll pay off. That's just my take on it. - I bought a home for 390k in 2001 after 20 yrs it sold for $950k I put maybe 50k into it over the course of 20 yrs. I'd say it was a good investment even though at the time it was priced high during that market.
I just bought a house. 340k with a 6.125% interest rate. We intend to pay it off early, but if we paid the full 30 years, the total cost would be almost 900k
Same thing happened in around 05 and 06. Nobody thought the party would end on home appreciation. They said the same stuff as they're saying now. Obviously nobody knows the future, but the affordability issue will resolve one way or another and it's hard to imagine that housing will become even more unaffordable in real terms.
Yes, hard to imagine houses going up continually still and becoming even more unaffordable for average people stuck earning median income, or often below that median, as there won't be enough people who can qualify to buy all the homes that will increase invemtory, as the number of people who may not want to sell if that means buying at a new higher mortgage rate, but will have no choice do to some life happening forcing their sale, like divorce, job move, inherited but not wanted house... Unfortunately, though, huge investment companies who have realized they can often rent out single family houses for a decent profit, just like apartments, will continue to buy varying amounts of available housing they see they can make a profit, so they will scoop up those houses most of us average earners won't be able to afford, and we will be forced to be renters, even after the economy corrects itself and renting is once again much more expensive, and so profitable for the investor/owner companies, as it the usual circumstance.
@@user-sd5ow2lz9othis is exactly what I been saying. These investors buying up all the houses not to sell but to rent. Buyers who want to buy won’t be able to buy because most houses will be rental properties.
yes, I worked for Lennar during that time... the only person who saw it coming was my boss (the broker) everyone else didn't believe her. if affordability continues to get worse I fear homelessness will be ten times worse than it is right now
Once you close on that house, that is your financial responsibility. The agents don't care and are not around. a 30-year financial commitment is not to be taken lightly. Buy what you can afford.
I’ve been watching your videos and it seems like your the only agent who is honest! I’m always second guessing my instincts but guess I’m not wrong. All your videos really help me make my own decisions and not let agents pressure me. All them agents who try to helped me buy a home tells me the opposite of what you are saying! Keep them video coming and thank you!
I just signed to extend my lease for another year for this reason. To your point, the variables are too much of a risk for me. I’d rather rent and have a stable housing rate for another year. The loan officer tried to sell me on the whole refinancing and investing into my future bit, no thanks. I do not want to take on a mortgage hoping that the value property increases, that my taxes and insurance don’t increase, and that the interest rate will decrease. It’s way too much of a gamble for the level of home I can comfortably afford.
Just bought a house only because I got a 5.875% rate and the house was under listed by about $30,000 I was fully prepared to just rent for awhile, but the stars aligned
My family is looking to sell our house this year and move to northern Florida. Lol after researching the area and current pricing it’s feels like a trap… it really is a crazy time right now.
Wife and I have been in the market for 4 years and we probably should have bought after we got married but we wanted to save more and put more down. We've done that but in So Cal the houses went from $800k to almost $1.2 million now. I go through phases on whether we should buy or not. But the last open house we went to the realtor was so pushy about buy now and refi later. Problem is that the house was $1.2 and even with 20% down the monthly was about $7,700. Yeah no thanks.
We got pre-approved today. The mortgage broker started with the max they could approve us for, then when they told us what our monthly payment would be, I almost puked. Always remember they approve on gross income. Be conservative and base it on net in my opinion. We ended up giving her the payment we're comfortable with, she re-worked the numbers, and although it's considerably less, we know we'll be able to buy a home very easily
Thank you for being honest! All of these other CZcams realtors will push you to buy regardless of what’s happening. It makes it so difficult to make an informed decision when everything is so obviously biased
Rent goes up. The price you paid for the house isn't going to go up. If you can have a ten year plan to keep the house it's pretty hard to justify renting. Land lords are cashflowing rentals while paying a mortgage. Yeah it might make sense to rent if you're going to be leaving the area but I think the take home message here is to avoid being house broke. Keep in mind your house is a liability because it doesn't make you money
Date the rate marry the house works you just can’t overextend on the rate you’re dating.😂 I know so many ppl that are “waiting for rates to come down” and it’s like dude if you can afford it just go for it and hold
My dad rented for 300 a month in rural my whole life (25 years) and is still broke. I wonder if he has an income problem. His rent recently increased to 450
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I got my inheritance early so it was a cash buy so it was a good time to buy. I agree about the inspections. The seller had no ground attached for the meter and needed minor roof repair. The foundation was ok but needed to be checked. Great vid.
i doubt most homes won't gain value if the rate goes from 7% 5.5-4%. prices are only gonna go up. when prices drop, they eventually go back up, just like the stock, just be prepared to play the long game.
I had the worst realtor last year while looking for a house. She would show up late to house tour. Can’t make it out on days we want . She only wants to sell house and not look out for the buyer
If you buy a Starbucks, are you paying their mortgage? Yes! If you buy something at Walmart, arent you paying their mortgage? So, “you are paying someone elses mortgage makes no sense”!!!!
Yeah but you can't get the money back for rent. You will throw away more money from rent than you ever will from maintenence. Unless you are someone who doesn't know how to do anything, then renting should be the only thing they should do. For me, I can fix anything as I'm an engineer.
Ya I was more careful when selecting my 3rd property and I just rented out the other 2 houses. I got 3.5% interest so it was a no brainer. I remodeled the property after I bought it using money I earned from renting out my other 2 houses.
I think larger cities in the US are underpriced. I’ve been to many European and Asian cities and the prices are twice as expensive per sq feet. If the US really is the richest country then I would say the US is also the most affordable comparably. The problem is most US citizens want a 2000+ sq ft home which is rather large compared to the rest of the world. If Americans would accept 1000 sq ft then most would be living in a place they own by now.
Hello, when you say 25-30% of your net income towards your monthly payment are you including taxes and insurance or just the mortgage payment? Thann you
You say when the rates go down, the home prices go up. But you gave the 7.5-6.5% example and said your house could go down and not up. Can you explain this to me please? It seems like if the rates go down then price will go up, giving some equity
I think he means that it’s no longer a given that your house will be worth more than what you bought it for. Maybe the price of your house goes up a bit when rates come down, but what if your house depreciated more than rate prices are going up? You’re still underwater
NGL you really should be careful throwing out "advice", my family got our house in 2005, yikes, but 18 year of home ownership taught us a few things basically the state payed for our 3.5% down-payment so it did it zero down. This is not advice just some perspective. First, off real estate math is really hard and complex its somehow both cheaper and more expensive then you think it is, a 6% interest rate is actually only a 3-4% interest rate because the liability(your loan) is a depreciating asset, this is why banks lost their shirts in the pandemic from sky high inflation, nominally its the same but its worth less then the year before, this is also why no raise at work is a -2.5% paycut. People get hung up on the fact that you only paying 1.18% of your loan in the first year but your loan also got 2-3% cheaper so on a 400k loan you pay about 4600 but you also get a 8k-12k break. The part where its more expensive is the total cost of ownership like maintenance but... If you actually look at the CPI Shelter is listed as two thing rent and maintenance. In the eyes of the Fed a homeowner is the landlord and the tenant there no inflation on a mortgage because is just an accounting trick to make large cost more palatable. This mean you get hit twice from inflation in increase renting cost the average rent inflation has been outpacing the average currency inflation by 1.27% since 1980, that rate is 3.18% per year and keep in mind that takes into account the 2009-2012 crash. So while your mortgage remain nominally the same rent marches higher until about even at a 50% difference with a 30 year compare to 10 years. A side note is that this is the reason why housing becomes unaffordable over and in my opinion Keynesian economics is terrible. You can still ask your boss for a 2-3% cost of living adjustment raise when you are sheltered a bit from inflation. You "don't pay more on a mortgage" forever and you don't have to completely pay off the house and the discount on your "renting to yourself" at a discount is not income to be taxed. You can also look at renting as borrowing land and a house, you're still borrowing a asset worth hundreds of thousands if not over a million dollar. Except, that loan is an appreciating assets and you're only paying interest. A house is an appreciating asset, there are few guarantees in investing, and you generate little returns from taking no risk. Land and house is a stable product, its a commodity, its like gold, if you bought it outright for cash its saving not an investment it grows at 4% per year just like gold which when you account for maintenance mean it doesn't go up at all. Except, you can live in it and if you put 20% down, its 5x leverage and its expected return is amplified to a 20% return, and if you leverage 30x with 3.5 percent ooh boy. Yes, there closing cost and PMI. Just think about it this way, do you think a $500,000 house will be worth $400,000 in 30 years? In 15 years or 7 years. At 20% it twice as good as stocks and derisks over time. But look if you were buying live and not rent it to people being underwater just mean you can't refinance or HELOC your equity. Home ownership is the only investment where you can 30x your leverage, have the market crash, and be OK. Rental is another thing. The worst thing that can happen to your Home is that the neighborhood gets worst but the worst thing that can happen in a rental is that it get much nicer, then the rent becomes too damn high and you're gentrified out of our home. So you get 1.18% from paying your principal the first year, more each year, 2-3% break from less from a depreciating liability, and a projected 20% ROI on a 20% down-payment. In 30 years with an interest rate of 6% for a 400k loan you would have paid $863,352.76 but your house is worth 1.6million from an initial $500,000 home. People were paying $2500 to rent it then in the 30 years about $7600. If property taxes were 1% you would save 6k in "rent" per month. As for "if houses jump so much" sure it will come down right. Well, that what people thought in 2021 and didn't get in before rates jump from 0-6%. I would argue that a huge part of the price increase is the new normal because everyone makes more money now, the USD is worth 30% less so it make sense houses are 30% more nominally.
I will say it again. If you can afford to pay the mortgage comfortably. Always buy. It doesn't matter if the home doesn't appreciate or even go down. It will always go back up. Period. If your rent per sqft is more than the interest payment for your mortgage, buy. You are literally giving the money away already. The only thing rent has over buy is maintenance and that's even debatable. Renting costs you in terms of moving (buying temporary things are costly, sometimes parking fees, towing etc... the crazy thing is money loses value over time, rent will most likely go up. You will never have long lasting permanent home items. You can't fix your car in your apartment parking lot. That's lost of money. If you have animals, they're gonna rob you blind. You cant park your unused vehicle without a tag in your apartment parking space. Most home owner don't do any maintenance for years lol. If you are handy, even better. Just don't buy a lemon house
Only if you plan to stay in the home for at least 7yrs and not move somewhere else. Otherwise, if the market goes down in a year and you have to move you'll be selling at a greater loss than if you just rented. Also, staying for more than 7yrs justifies paying $10k+ in closing costs. Otherwise, you could've just rented for 7yrs for the same price you paid in closing costs.
@@drwayne_carter9115there's literally no place in the US you would spend in rent what you would've spent in the 10k+ closing costs over 7 years🤦♂️ what kind of BS statement is that? Average cost to rent a 2 bedroom in the US is $1317 a month that would be over $110k in 7 years given that rate never increases.
@@drwayne_carter9115 you are correct. I couldn't cover all the circumstances but yes buying is not for everybody at all ages. But when you feel like you want a home. Buy the earliest you can. People that brought in 05 and keep their deflated homes are still better off today
Agree with many points except that buying isn't an investment and renting is better in certain circumstances. Buying is still an investment if you have some equity and even sell at the purchase price. With rent, you get $0 back every time. Also, most leases come with an early termination clause that makes you pay the remaining months you're vacating. So if you've got more than 3 months remaining and need to break your lease, you're looking at at least $5,000 loss PLUS cost of moving out. Imo, the only benefit of renting is having a maintenance team.
You give a lot of bad advice in this video. It's pretty sad that so many people will listen to you. I'd be glad to do a live discussion/debate on why you are wrong and put my money where my mouth is.
@@candelariaw1668 Yeah, it looks to me like Javier is smart enough to make a lot more money on CZcams than he does selling real estate. Doom n' gloom gets clicks.
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Also, don’t let an agent tell you to raise your budget because you got approved for more than the range you’re actually looking in.
unless you actually want to find a house...
Most folks don't want to "settle". That means you're either increasing your budget or lowering your expectations. Honestly, the agent doesn't care. Most of them are just trying to help you find a house that you want to buy.
What sucks about the market right now is most people are forced to take a big gamble one way or another.
Option 1: over extend your budget to “date the rate” and get into a house at the risk of being house poor.
Option 2: Continue to rent while hoping for prices to go down. This creates the risk that prices continue to go up and you’re never able to buy.
Pick your poison. Neither choice is right or wrong, but it’s tough to accept those are the only options for most people.
This is a really good comment and often not accounted for, but super spot on.
Total agree.
Never makes sense to rent, always makes sense to buy.
Current rental: $2200/month
Buying the exact same house at today's interest rates: $5080 month after $90,000 down payment and $12,000 in closing costs. And only $500/month of that PITI goes towards principle. $4500 is lit on fire in interest, insurance, taxes, and mortgage insurance. Not to mention maintenance and repairs.
Renting is looking pretty good.
Completely agree and it's drastically cheaper to rent right now in most places in the US.
Untill in 20 years rent is 6000🤣🤣🤣
@@EAster33
And the mortgage payment will be $10,000!!!
And u save and invest those 3000 dollars a month difference + 100k of the down payment.
After 10 years you got more than 700k. A big downpayment that would allow u to pay cash for a house ( or a big downpayment when interest rates are lower for lower monthly payment)
2200 rent, maybe 3500 mortgage, still better to buy.
Man, to be honest, you're the best real state agent youtuber in all of AZ. You always keep it honest.
I got in an argument with a real estate agent about “date the rate”. I told him you’re guaranteeing people that their home value will rise over the next few years and considering how overpriced homes are now thats not very likely.
you have no idea what you're actually talking about. Why do you think prices are overpriced now? Why don't you think they will go up?
@@Hammer.J.Helmer because nobody in America will be able to afford a home the entire industry will die. Do you really think $450k is a reasonable price for a 1300 sq ft rancher that needs repairs? Are you like 19 or something??
@@eyeinsee What I think doesn't matter. The market dictates prices - supply and demand. The bottom line is that there is no influx of supply on the horizon. The number of transactions is way down, but that only adds to the supply issue.
Somebody is buying the homes.
Corporate is buying the homes😂
Kinda hard to look at house prices since forever in the US and see that they have only gone up over time and think that they’re gonna go down. Also with high interests rates the government can’t stay being the government.
I appreciate your honesty man. Date the rate is getting thrown around a lot. I wish you success with your honesty in this crazy market.
it's thrown around because it's true. This guy is honest... honestly wrong. He believes what he says, but it doesn't mean he's right. Rates will fall again - and home prices will go up when they do.
It’s not about the rates… the houses are to much. People buy over the selling price and that’s where they encounter problems.
@@candelariaw1668 people were going over asking price because demand far outstripped supply when rates were low. That will happen again as rates fall, but hopefully not as severe.
@@Hammer.J.HelmerI agree. I brought last year and glad I didn’t wait until this year.
Thank you for being sensible. I think people often forget that real estate agents are sales people. They will tell you anything to sell you a house. A car salesman can quite literally lie to you about anything regarding a car to sell you it, and it's protected by law. Missouri real estate agents lost against a billion dollar lawsuit for fraudulent practices. People need to be very careful about the information they take in and believe. Even though I fully preach and believe the same thing you say, it's still wise to shop around for information elsewhere.
When we did new construction at the end of 2020 into 2021… we kept our design selections minimal to avoid over inflating the final cost of the home in case another 2008 housing crash occurred!!
And you can wear an aluminum foil hat to block the brain reading waves. We absolutely will not see 2008 happen again, we are in a totally different market and economy.
BRO IS SPITTING REALISTIC FACTS . THIS IS AN AWESOME VIDEO JAVIER. ALWAYS THE REALIST REALTOR ALIVE !
It is very expensive to refinance and the cost will take you years to break even. You essentially pay all those closing cost twice. And paying for a 2-1 buy down is foolish. If the seller is offering it to you, use that amount off the purchase price so your amount financed is lower. You will have more equity if you are able to refinance.
Not to mention when you do refinance the loan gets re-amortized. Taking you even longer to pay off the principal
you have absolutely no idea what you are talking about.
@@drwayne_carter9115best to refinance if you’re at least 1 year in.
@@drwayne_carter9115 Yep sinking you back into the fact that if you don't stay at least another 7+ years you're just burning far more money than you would've renting.
Refinancing is free for me. Lol.
The inventory in places like New York is so scarce I can’t imagine the value dropping much no matter what happens
“Date the rate, marry the house”. Terrible saying for so many reasons.
A house in NJ just sold for $115k over asking price…it’s not even a great town and needs work…DOOMED
which is why the idea that home prices are going to fall is so stupid.
@Hammer.J.Helmer those that are buying these properties way above where they should be will eventually run out of money if their intention is to just resell. Look at what happened to Opendoor and Zillow.
@@dsc-nr5zy you don't get it - they are not buying "above where they should be'. There is a housing shortage, an inventory shortage, and no reason AT ALL that prices will drop over the next 5 years.
These are the prices. And that makes them exactly where they should be.
Thank your gov't for driving them up so quickly with the reaction to the pandemic... what should have taken a decade took less than 3 years. But now that they are here, they are here to stay.
@@Hammer.J.Helmer bro it’s a frenzy and you are frenzied too. It makes no logical sense. When others are greedy be fearful.
@@KhanJoltrane I'm not frenzied, I'm a pro in the industry and just see what I see.
Really where are investors putting their cash? Isn’t it crazy how mortgage rates continue to rise with higher imports and declining exports, but the FED is yet to lessen cost. Something will eventually break if they keep raising interest rates and quantitative tightening.
I concur with your comment, personally I've avoided drawbacks of uncertain times by simply following guidance from a reputable advisor, and have been able to increase my savings by at least 300% since late 2019, just before rona out-break, summing up nearly $1m after subsequent investments to date. I'm semi-retd now, and only work 7.5 hours weekly.
That's fascinating. How can I contact your Asset-coach as my portfolio is dwindling?
Aileen Gertrude Tippy'' is her name. She is regarded as a genius in her area and works for Empower Financial Services
Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
@@Pamela.jess.245 that has got to be the worst attempt do people actually fall for this like you are both Total strangers and someone who invest only has CZcams accounts for 4 months
I remember my parents taking out a HELOC around 2005. I was just a college kid and I asked what they needed the money for. They couldnt tell me lol. When the recession hit things got really bad. I learned a lot from their mistakes
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hope that freshman has a parttime job too
You are the only real estate agent that is honest. I think this going to bring you lots of business! I will hit you up when I'm ready to buy in east phx
Please make an episode on what it exactly means to refinance, and when is it a good time to refinance, and if you refinance can you refinance again if the rates go down again or do you have to wait like a year or so ?
Refinancing is basically trading in your current mortgage for a new mortgage but with the latest interest rates and updated value of your home. The only limit to refinancing is banks won't allow you to refinance until you have at least 20% equity built up in the home. So it makes sense to refinance if rates are at least 1.5-2% lower than your current mortgage and if you have 20% equity in the home. You can refinance many times but keep in mind every time you refinance you have to re-pay closing costs.
@@drwayne_carter9115how much are closing costs typically?
@@drwayne_carter9115I walked in with 26K of equity, now I’m waiting for the rates to drop. But most won’t walk in with equity.
@@drwayne_carter9115couldn’t have explained it better myself.
Biggest reason not to buy home is when you buy home then its highly likely your home will be far from your work locaton and you need to drive miles and miles every day to visit office. Non of the jobs are stable and there will be better pay at different location. You can change rented apt from one location to another just like that and can stay very near to work location. You can save tons and tons of time and get peace of mind and apt people will take care of everything for your residence. At least you will have contact with human when you live in apt but independent houses are like living in desert area.
What??? You must love noise.
I heard a builder tell someone " buy the house now and date the rate" so you don't miss out on your dream house. This is 2024!
The rate ain’t the problem
Interest and property taxes alone > rent = I’ll keep renting and stacking my chips.
Then you are renting a property that is way below what you are considering buying. Do you think that landlords lose money on properties? That they subsidize you and they pay the taxes and interest so you don't have to?
Yeah...
If you can but most people rent is high and they can’t even save no money.
@@Hammer.J.Helmer My rent is 20% below market average because my landlord inherited it free and clear, bub’
Obviously he’s not losing money 🥱
@@InternetUser._ he's definitely losing money. See, that's how money works. If he is renting it to you at 20% below market average, he's losing that 20%.
@@Hammer.J.Helmer No, my boy. You don’t raise rent on good tenants because that’ll result in vacancy that will result in a greater net loss overall. 🥱
The one that got me was that my mortgage lender said they service 99% of their residential mortgage loans and that within 5 years they will waive fees for refinancing if rates drop. My mortgage got sold to another company before I made my first payment.
Thank you for putting out great information as always! I am hoping to buy my first house in SoCal in the next 1-2 years.
Best of luck!
I always hear this from my realtor: you can always refi". I already drop 2 but it seems like each one is like a talking parrot >.>
It's a tough call when it comes to when to buy a house because with rates "high" (which is relative to what you're used to) the payment on the home is higher BUT when rates are very low home prices tend to go up. This means property taxes go up and so does the insurance bc of replacement value. BUT (again) this is a cost that can be written off on taxes. Whereas your mortgage cannot. So, what's better to do. Well, always run the numbers because refinancing costs money and you have to be sure you'll qualify when you go to do that! I think I'd rather pay a little more for the house and write off the taxes etc bc as rents go up and houses cost more in the long run it'll pay off. That's just my take on it.
- I bought a home for 390k in 2001 after 20 yrs it sold for $950k I put maybe 50k into it over the course of 20 yrs. I'd say it was a good investment even though at the time it was priced high during that market.
I just bought a house.
340k with a 6.125% interest rate.
We intend to pay it off early, but if we paid the full 30 years, the total cost would be almost 900k
Still better than dumping 340k into it, park the rest of the money somewhere better
Same thing happened in around 05 and 06. Nobody thought the party would end on home appreciation. They said the same stuff as they're saying now. Obviously nobody knows the future, but the affordability issue will resolve one way or another and it's hard to imagine that housing will become even more unaffordable in real terms.
Yes, hard to imagine houses going up continually still and becoming even more unaffordable for average people stuck earning median income, or often below that median, as there won't be enough people who can qualify to buy all the homes that will increase invemtory, as the number of people who may not want to sell if that means buying at a new higher mortgage rate, but will have no choice do to some life happening forcing their sale, like divorce, job move, inherited but not wanted house... Unfortunately, though, huge investment companies who have realized they can often rent out single family houses for a decent profit, just like apartments, will continue to buy varying amounts of available housing they see they can make a profit, so they will scoop up those houses most of us average earners won't be able to afford, and we will be forced to be renters, even after the economy corrects itself and renting is once again much more expensive, and so profitable for the investor/owner companies, as it the usual circumstance.
@@user-sd5ow2lz9othis is exactly what I been saying. These investors buying up all the houses not to sell but to rent. Buyers who want to buy won’t be able to buy because most houses will be rental properties.
yes, I worked for Lennar during that time... the only person who saw it coming was my boss (the broker) everyone else didn't believe her. if affordability continues to get worse I fear homelessness will be ten times worse than it is right now
Once you close on that house, that is your financial responsibility. The agents don't care and are not around. a 30-year financial commitment is not to be taken lightly. Buy what you can afford.
I’ve been watching your videos and it seems like your the only agent who is honest! I’m always second guessing my instincts but guess I’m not wrong. All your videos really help me make my own decisions and not let agents pressure me. All them agents who try to helped me buy a home tells me the opposite of what you are saying! Keep them video coming and thank you!
I just signed to extend my lease for another year for this reason. To your point, the variables are too much of a risk for me. I’d rather rent and have a stable housing rate for another year. The loan officer tried to sell me on the whole refinancing and investing into my future bit, no thanks. I do not want to take on a mortgage hoping that the value property increases, that my taxes and insurance don’t increase, and that the interest rate will decrease. It’s way too much of a gamble for the level of home I can comfortably afford.
Just bought a house only because I got a 5.875% rate and the house was under listed by about $30,000
I was fully prepared to just rent for awhile, but the stars aligned
You still got taken.
@@michaelwool5960 You don’t even have all the info but are already convinced lmao
How were you able to get that rate?
@@Bella_0303 By having an 803 credit score and using a mortgage broker. I paid like $250 in points
@Bella_0303 buy down from builder or VA loan probably. Price is still to high.
My family is looking to sell our house this year and move to northern Florida. Lol after researching the area and current pricing it’s feels like a trap… it really is a crazy time right now.
Wife and I have been in the market for 4 years and we probably should have bought after we got married but we wanted to save more and put more down. We've done that but in So Cal the houses went from $800k to almost $1.2 million now. I go through phases on whether we should buy or not. But the last open house we went to the realtor was so pushy about buy now and refi later. Problem is that the house was $1.2 and even with 20% down the monthly was about $7,700. Yeah no thanks.
Glad you said no.
We got pre-approved today. The mortgage broker started with the max they could approve us for, then when they told us what our monthly payment would be, I almost puked. Always remember they approve on gross income. Be conservative and base it on net in my opinion. We ended up giving her the payment we're comfortable with, she re-worked the numbers, and although it's considerably less, we know we'll be able to buy a home very easily
Thank you for being honest! All of these other CZcams realtors will push you to buy regardless of what’s happening. It makes it so difficult to make an informed decision when everything is so obviously biased
Why would you make a decision off of what someone else is saying?
Rent goes up. The price you paid for the house isn't going to go up. If you can have a ten year plan to keep the house it's pretty hard to justify renting. Land lords are cashflowing rentals while paying a mortgage. Yeah it might make sense to rent if you're going to be leaving the area but I think the take home message here is to avoid being house broke. Keep in mind your house is a liability because it doesn't make you money
Keep it up Javier!
Date the rate marry the house works you just can’t overextend on the rate you’re dating.😂 I know so many ppl that are “waiting for rates to come down” and it’s like dude if you can afford it just go for it and hold
A house is just a place to keep your tv dry. Don't pay too much for it.
My dad rented for 300 a month in rural my whole life (25 years) and is still broke. I wonder if he has an income problem. His rent recently increased to 450
The essence of wealth, to me, lies in attaining freedom. In my mind, the ideal figure is $5 million by the age of 65, ensuring worry-free living. Would it be more advantageous for me to invest a significant portion of my income in stocks or real estate to reach this objective?
Diversifying income streams is prudent, particularly when coupled with living within one's means. While my net worth stands at $2 million, I manage my expenses comfortably without living extravagantly. I harbor no grievances about this approach.
Financial guidance is subjective, as what proves effective for one individual may not necessarily yield the same results for another. Nonetheless, it's prudent to strategize and plan ahead. I consider myself fortunate to have been introduced to personal finance at a young age. I began working at 19, purchased my first home at 28, and faced a layoff at 36 during the COVID outbreak. Promptly, I sought the assistance of an advisor to manage the growth of my finances. Presently, I am only 25% away from achieving my $1 million goal, thanks to subsequent investments.
Thank you! At 56, I inherited money from a childless relative, allowing me to travel overseas and marry a woman nearly my age. However, my primary concern now is how to safeguard and expand my wealth in preparation for retirement. Could your advisor assist me with this matter?
I got my inheritance early so it was a cash buy so it was a good time to buy. I agree about the inspections. The seller had no ground attached for the meter and needed minor roof repair. The foundation was ok but needed to be checked. Great vid.
Thanks for being real we all made mistakes
A house is not a prize just for the few. And never think you can refinance later it's way to risky.
i doubt most homes won't gain value if the rate goes from 7% 5.5-4%. prices are only gonna go up. when prices drop, they eventually go back up, just like the stock, just be prepared to play the long game.
simple but very informative video. 2024 a fresh start, we should be aware of these bad but claimed to be “practical” advices lol
Thank you for the helpful videos, God bless you and yours
I had the worst realtor last year while looking for a house. She would show up late to house tour. Can’t make it out on days we want . She only wants to sell house and not look out for the buyer
At the end of the day I really enjoyed this video thanks Javier
When you buy home at a high rate you get the home for cheaper. When rates go down prices will go up. So you end up spending more for the house.
Main that home refinance advice was nice to hear. Thanks
Great video and even better advice. Love how you keep it really real. Keep the honesty coming because we need it. Thanks!
Javier! I appreciate you so much! Always real and from the heart
RIP to the housing market
This is what I needed to hear 🙌🏽 hope the baby is good 🙏🏼
Great point towards the end regarding refinancing and the value of your home.
Don’t forget closing cost for a refinance
This is completely realistic and great advice for people. Thank you!
I don't like, "Your paying some one else's mortgage"
If you renting you are.
You might not like it but it's true lol
@@fabbz94 Yup, didn't say it wasn't true. I don't use it as a selling point
@@candelariaw1668 so true
If you buy a Starbucks, are you paying their mortgage? Yes! If you buy something at Walmart, arent you paying their mortgage? So, “you are paying someone elses mortgage makes no sense”!!!!
Yeah but you can't get the money back for rent. You will throw away more money from rent than you ever will from maintenence. Unless you are someone who doesn't know how to do anything, then renting should be the only thing they should do. For me, I can fix anything as I'm an engineer.
Ya I was more careful when selecting my 3rd property and I just rented out the other 2 houses. I got 3.5% interest so it was a no brainer. I remodeled the property after I bought it using money I earned from renting out my other 2 houses.
He kicked some facts.
Thanks for the info.
How about becoming a real estate agent in 2024?
I think larger cities in the US are underpriced. I’ve been to many European and Asian cities and the prices are twice as expensive per sq feet. If the US really is the richest country then I would say the US is also the most affordable comparably. The problem is most US citizens want a 2000+ sq ft home which is rather large compared to the rest of the world. If Americans would accept 1000 sq ft then most would be living in a place they own by now.
House values will rise tho if rates fall?
Hello, when you say 25-30% of your net income towards your monthly payment are you including taxes and insurance or just the mortgage payment? Thann you
35% of PREtax income
You say when the rates go down, the home prices go up. But you gave the 7.5-6.5% example and said your house could go down and not up. Can you explain this to me please? It seems like if the rates go down then price will go up, giving some equity
I think he means that it’s no longer a given that your house will be worth more than what you bought it for. Maybe the price of your house goes up a bit when rates come down, but what if your house depreciated more than rate prices are going up? You’re still underwater
@@PansyFanGirlthe longer you stay in your home that will rebound.most folks always want the better best and stay in their homes for less than 5 years.
NGL you really should be careful throwing out "advice", my family got our house in 2005, yikes, but 18 year of home ownership taught us a few things basically the state payed for our 3.5% down-payment so it did it zero down. This is not advice just some perspective.
First, off real estate math is really hard and complex its somehow both cheaper and more expensive then you think it is, a 6% interest rate is actually only a 3-4% interest rate because the liability(your loan) is a depreciating asset, this is why banks lost their shirts in the pandemic from sky high inflation, nominally its the same but its worth less then the year before, this is also why no raise at work is a -2.5% paycut. People get hung up on the fact that you only paying 1.18% of your loan in the first year but your loan also got 2-3% cheaper so on a 400k loan you pay about 4600 but you also get a 8k-12k break. The part where its more expensive is the total cost of ownership like maintenance but...
If you actually look at the CPI Shelter is listed as two thing rent and maintenance. In the eyes of the Fed a homeowner is the landlord and the tenant there no inflation on a mortgage because is just an accounting trick to make large cost more palatable. This mean you get hit twice from inflation in increase renting cost the average rent inflation has been outpacing the average currency inflation by 1.27% since 1980, that rate is 3.18% per year and keep in mind that takes into account the 2009-2012 crash. So while your mortgage remain nominally the same rent marches higher until about even at a 50% difference with a 30 year compare to 10 years. A side note is that this is the reason why housing becomes unaffordable over and in my opinion Keynesian economics is terrible.
You can still ask your boss for a 2-3% cost of living adjustment raise when you are sheltered a bit from inflation.
You "don't pay more on a mortgage" forever and you don't have to completely pay off the house and the discount on your "renting to yourself" at a discount is not income to be taxed.
You can also look at renting as borrowing land and a house, you're still borrowing a asset worth hundreds of thousands if not over a million dollar. Except, that loan is an appreciating assets and you're only paying interest.
A house is an appreciating asset, there are few guarantees in investing, and you generate little returns from taking no risk. Land and house is a stable product, its a commodity, its like gold, if you bought it outright for cash its saving not an investment it grows at 4% per year just like gold which when you account for maintenance mean it doesn't go up at all. Except, you can live in it and if you put 20% down, its 5x leverage and its expected return is amplified to a 20% return, and if you leverage 30x with 3.5 percent ooh boy. Yes, there closing cost and PMI. Just think about it this way, do you think a $500,000 house will be worth $400,000 in 30 years? In 15 years or 7 years. At 20% it twice as good as stocks and derisks over time. But look if you were buying live and not rent it to people being underwater just mean you can't refinance or HELOC your equity. Home ownership is the only investment where you can 30x your leverage, have the market crash, and be OK. Rental is another thing.
The worst thing that can happen to your Home is that the neighborhood gets worst but the worst thing that can happen in a rental is that it get much nicer, then the rent becomes too damn high and you're gentrified out of our home.
So you get 1.18% from paying your principal the first year, more each year, 2-3% break from less from a depreciating liability, and a projected 20% ROI on a 20% down-payment. In 30 years with an interest rate of 6% for a 400k loan you would have paid $863,352.76 but your house is worth 1.6million from an initial $500,000 home. People were paying $2500 to rent it then in the 30 years about $7600. If property taxes were 1% you would save 6k in "rent" per month.
As for "if houses jump so much" sure it will come down right. Well, that what people thought in 2021 and didn't get in before rates jump from 0-6%. I would argue that a huge part of the price increase is the new normal because everyone makes more money now, the USD is worth 30% less so it make sense houses are 30% more nominally.
I will say it again. If you can afford to pay the mortgage comfortably. Always buy. It doesn't matter if the home doesn't appreciate or even go down. It will always go back up. Period. If your rent per sqft is more than the interest payment for your mortgage, buy. You are literally giving the money away already. The only thing rent has over buy is maintenance and that's even debatable. Renting costs you in terms of moving (buying temporary things are costly, sometimes parking fees, towing etc... the crazy thing is money loses value over time, rent will most likely go up. You will never have long lasting permanent home items. You can't fix your car in your apartment parking lot. That's lost of money. If you have animals, they're gonna rob you blind. You cant park your unused vehicle without a tag in your apartment parking space. Most home owner don't do any maintenance for years lol. If you are handy, even better. Just don't buy a lemon house
Only if you plan to stay in the home for at least 7yrs and not move somewhere else. Otherwise, if the market goes down in a year and you have to move you'll be selling at a greater loss than if you just rented. Also, staying for more than 7yrs justifies paying $10k+ in closing costs. Otherwise, you could've just rented for 7yrs for the same price you paid in closing costs.
@@drwayne_carter9115there's literally no place in the US you would spend in rent what you would've spent in the 10k+ closing costs over 7 years🤦♂️ what kind of BS statement is that?
Average cost to rent a 2 bedroom in the US is $1317 a month that would be over $110k in 7 years given that rate never increases.
@@drwayne_carter9115 you are correct. I couldn't cover all the circumstances but yes buying is not for everybody at all ages. But when you feel like you want a home. Buy the earliest you can. People that brought in 05 and keep their deflated homes are still better off today
Sadly, that uncle with the terrible advice represents a lot of people who think the same way 🙈
could you make a video on choosing roommates? i know that’s not really in your realm, but i’m on the market for people aka roommates, not a home 😅
Agree with many points except that buying isn't an investment and renting is better in certain circumstances. Buying is still an investment if you have some equity and even sell at the purchase price. With rent, you get $0 back every time. Also, most leases come with an early termination clause that makes you pay the remaining months you're vacating. So if you've got more than 3 months remaining and need to break your lease, you're looking at at least $5,000 loss PLUS cost of moving out. Imo, the only benefit of renting is having a maintenance team.
I’m emotionally unstable😅
Double like at 7:11
It’s me, I’m emotionally unstable 😅
Javier. I would love to get your thoughts on an email I sent you on Wed. Let me know what you think.
Homeowners have a 40x net worth on average .😂
Spit it out Bro nobody got that much time
❤❤❤
Do you speak Spanish Javi?
So if a house is only for people who have strong financials then the advice shouldn’t be to get ur finances strong ? This video itself is bad advice
First to comment! Hi Javier!👍🏾
You give a lot of bad advice in this video. It's pretty sad that so many people will listen to you. I'd be glad to do a live discussion/debate on why you are wrong and put my money where my mouth is.
You can already put your money where your mouth is! Just buy up all the available inventory you can on the market at current market prices.
Just make a response video
@@X11CHASE that's a good idea, I think I will. I just have to figure out how LOL...
It’s call doom n gloom.
@@candelariaw1668 Yeah, it looks to me like Javier is smart enough to make a lot more money on CZcams than he does selling real estate. Doom n' gloom gets clicks.
4:58 but as an owner with rental properties, aren't you just trying to get potential tenants? Goes both ways Javi
*We need a complete overhaul of our Government, This administration putting so many families into difficult situations low income people are suffering to survive! I appreciate Fx Ellen, Imagine investing $1000 and receiving $10,450 in 3days.* 💚🦋