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My First Place (HGTV)


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#31

Bitterswete

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Posted Jul 24, 2007 @ 2:42 PM

Hey, I found an update at HGTV.com.

Michanda just earned her MBA with honors and is interviewing for her dream job in event planning or marketing. The search for her first place resumes once her new career is in place and she's more than ready, thanks to the incredible real estate education she got through her first house hunt!
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#32

BambiJo

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Posted Jul 25, 2007 @ 2:47 PM

Okay, I'm really loving this new format of this show. It's better than House Hunters, I think. But I swear, I could KILL the next person who says, "As a first time home buyer..." AAAAAAAAAAAAAAAAAAAAAHHHHHHH!!!!! I was ready to gouge my eardrums out after Michanda said that for the 4567th time. Seriously. Who says that?
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#33

tootietata

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Posted Jul 25, 2007 @ 3:55 PM

I could KILL the next person who says, "As a first time home buyer..." AAAAAAAAAAAAAAAAAAAAAHHHHHHH!!!!! I was ready to gouge my eardrums out after Michanda said that for the 4567th time. Seriously. Who says that?


I know! It's totally the producers fault. They're probably phrasing every question like "As a first time home buyer, how does it feel to....?" which encourages the interviewee to throw the question back in the answer.
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#34

Lordloveaduck

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Posted Aug 15, 2007 @ 12:23 AM

I saw this tonight, with the young couple where the guy is just finishing up his M.B.A. It wasn't clear what his girlfriend/fiance does.

They picked a nice house, seemed a decent price at $232,900. But there was one point where John said "I've saved up a good down payment, about $60,000, because I always knew I wanted to buy a house as soon as possible." But then when he was signing the papers, he said "we decided to go with 100% financing."

Say what? What kind of sense does that make? I could see scaling down if they realized they'd need money for furniture and everything, but he still could have put 20% down and had some left over.

And what kind of sense does it make to buy a house before the wedding? I hope everything works out for them but usually that's a very, very bad idea, for all sorts of reasons. He also made a face when she said something about "and now we can get married!" Hmmm.....

Beautiful house though, and the backyard backed into a small lake. They might not be thrilled with that once they have little kids, but they were talking about putting in a fence for the sake of their dog, so maybe that would take care of it.
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#35

xsandlapper

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Posted Aug 15, 2007 @ 12:50 AM

I caught that 100% comment too. What???

And the stobs at the end in the backyard. Wouldn't the lot have been surveyed before the purchase? That made no sense either.
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#36

Lordloveaduck

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Posted Aug 15, 2007 @ 4:47 PM

A lot of times a lot is not specifically surveyed on a transfer sale like this. It would be for the first owner, but typically the markers are wood, unless you pay extra for the metal rods, and of course wood disintegrates over time. If a lot backs up to parkland, like this one did, I could understand that the seller possibly didn't even know for a fact exactly where the rear boundary was, if the seller had never wanted to put a fence in and if the seller was not the original owner of the home.

As a buyer, I'd be pretty ticked, but it happens. If the buyers didn't request a survey -which they could have - they really have only themselves to blame.
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#37

twinks

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Posted Aug 15, 2007 @ 7:25 PM

They also could have measured the lot themselves to get an idea. I thought that was odd though. The house was nice; hope the area doesn't flood. It was pretty close to the water. I wondered how they could afford the mortgage.
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#38

Lordloveaduck

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Posted Aug 15, 2007 @ 8:08 PM

He's about to get his MBA. I suspect he'll be fine. That was a very modest price for a nice home. Did they say where it was? Where I live, a house like that would be easily $600,000 or more.

Still, strange he didn't put money down since he had it saved up. He must have done an 80/20 mortgage, and the rate on the 20% part would be higher. That didn't make sense to me, but he must have had his reasons.
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#39

Alyce

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Posted Aug 22, 2007 @ 4:42 AM

Okay, who saw the couple buying the house in the mountains?? They really bugged me!! The people who live in their area probably are happy that they are living out in the wilderness now!! What about their "movin' to the mountains' dance" when they heard their offer was accepted?? rolls eyes . . .

And you would think that considering that they have always lived w/roommates they would have been able to save up some $$. But at the closing, the loan officer said they were getting an interest-only adjustable rate mortage at 6.875 AND they were financing 100%!!! YIKES!!

An adjustable rate at 6.875% -- heck you should be able to get a regular fixed rate for 30 years at that rate!! And interest only!! What were they thinking!!

Wonder if they are going to run out and charge up a hot tub from the deck & a whole house-full of furniture?? Then when the rate adjusts, the bank will be foreclosing on their house like they are so many here in CA!
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#40

xsandlapper

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Posted Aug 22, 2007 @ 9:25 AM

But at the closing, the loan officer said they were getting an interest-only adjustable rate mortage at 6.875 AND they were financing 100%!!! YIKES!!


I heard that but didn't she say something about "5 years"? I wondered what that meant. And no down payment is not good.

Another thing I don't get is the "have to get a hot tub" so many people think is a necessity.
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#41

MittenGirl

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Posted Aug 22, 2007 @ 2:49 PM

Have we seen any of these homebuyers put down a down payment? Remember the women with the 40 year mortgage - it will take her years to have any equity at all.

Colorado couple said they had to have roommates in order to afford the rent on a house. How are they going to afford a $1400 mortgage payment, not to mention the taxes and inevitable repairs? The women said she was an aeronautical enigineer, so I would think she makes decent money; didn't catch what he did, something about dinosaurs?

I heard that but didn't she say something about "5 years"? I wondered what that meant.


I believe she said something about refinancing the house then. Assuming they haven't lost it, of course.
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#42

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Posted Aug 22, 2007 @ 2:49 PM

I've only been able to catch this show a few times--naturally I only run across the episodes I've already seen--and I don't think I've seen a single one have a downpayment/not use an ARM. I realize these were shot last year, but I'll be very interested to see next season--if they can find any participants!

I understand the young single mother not having a downpayment, or the young person still in college, but these couples with decent jobs? Not even a token down? Your closing costs? How does anyone expect to meet the expenses of home ownership when you can't even scrap a few thousand together?

That CO couple totally bugged. "I don't want to be ripped off!" They sure were trying to drive that price down to 200K, after bragging about being qualified for 300K.

I heard that but didn't she say something about "5 years"? I wondered what that meant. And no down payment is not good.



I assume that's referring to the 'adjustable' part. In five years, their payment will go up 50% or something insane. But no! They're have better jobs, or be ready to sell anyway, so it's no problem! That's what everyone being foreclosed right now thought too. I just saw that why we're seeing this big wave of foreclosures is they're the first group of adjustables coming due. Hundreds of thousands all bought at the same time, thinking the same thing: when the payment goes up, you'll either refinance using the equity in the home, or sell. The first is dependent on the house value going up, which they're now dropping, the second dependent on there being buyers. Oops.
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#43

buyitnow

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Posted Aug 22, 2007 @ 7:33 PM

The CO mountain house couple bugged me too, why would she need a hot tub if she had a giant multi-jet bathtub? How much do hot tubs cost to fill with hot water and run? For being an "aeronautical engineer" she didn't seem to have much sense... and where is hubby going to put all those bones? She was so bossy he might be fed up with her in five years, unless he likes someone telling him what to do all the time.

In the furniture reveal at the end the HGTV crew had taken it upon themselves to paint the pine paneling, which is something that the couple had liked about the house, its "mountainy" feel. They painted all the walls a feeble yellow and red couch and chair? It looked like a dorm room rather than a mountain cabin-house. IIRC, the kitchen was in green tones, which matched the original living room furniture, so the living room didn't even go with it.

Edited by buyitnow, Aug 22, 2007 @ 7:39 PM.

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#44

Seecreature

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Posted Aug 23, 2007 @ 8:40 AM

They painted all the walls a feeble yellow and red couch and chair? It looked like a dorm room rather than a mountain cabin-house. IIRC, the kitchen was in green tones, which matched the original living room furniture, so the living room didn't even go with it.


Yeah, I thought the same thing. The couple seemed immature and the look of the doom room probably was a good fit.
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#45

xsandlapper

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Posted Aug 23, 2007 @ 1:53 PM

Now that's it's been almost 2 days since I saw the mountain couple it's starting to seem like they were actors.
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#46

IsThisIt

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Posted Aug 25, 2007 @ 7:20 PM

I've just started watching HGTV and I was shocked to see the CO couple get an interest only loan. I honestly thought only people in the flipping business got those.
If that's the best you can do shouldn't that be a clue that you aren't ready to buy? Don't these people have a family or someone else on their side to help them through the home buying process?
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#47

ibkc

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Posted Aug 25, 2007 @ 9:32 PM

I thought the same thing, IsThisIt. They went through all that to and wound up with 100% financing and a 5-year ARM? Cripes - who was advising them?
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#48

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Posted Aug 28, 2007 @ 9:18 PM

Caught an episode I hadn't seen previously: Denver couple who'd lost out on house previously due to a bidding war. The couple was alright, their dog was adorable, but they too went for an interest only loan with a second mortgage near 9% AND had the sellers pay their closing costs. I can understand not having a huge downpayment, I bought my first place with only 5% down, but to have absolutely nothing, no skin the game whatsoever? How in world can they afford to maintain a home? What happens if the furnace goes out? I'd never even heard of having the sellers pay the closing costs until watching this show.
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#49

MittenGirl

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Posted Aug 29, 2007 @ 12:39 AM

In the Denver episode tonight, the couple who had lost out on a previous house, the female HO said something about why they went with an interest-only load. Something about "experts" (didn't say who they were) told them they would be better off investing the money that would have been going to the higher payment. At least I think that it what she said, she spoke rather quickly. Does her reasoning make sense to anyone? Wouldn't building up equity in their home be a pretty good investment?

Do you think they will ever show a buyer put down a down-payment?

Dare I hope that the days of wall-to-wall home buying/selling/flipping shows are ending, and networks will have to come up with some new show concepts?
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#50

darwin

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Posted Aug 29, 2007 @ 2:25 AM

Something about "experts" (didn't say who they were) told them they would be better off investing the money that would have been going to the higher payment. At least I think that it what she said, she spoke rather quickly. Does her reasoning make sense to anyone? Wouldn't building up equity in their home be a pretty good investment?


Well, they would have to be earning more than 9% (or whatever the interest rate on their 2nd mortgage) on their investments to come out ahead, which would have been likely a decade ago, but not so likely today. This is why you are almost always better off paying down high-interest debt (like credit cards) if you have the cash.
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#51

Honey Wheeler

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Posted Aug 29, 2007 @ 6:35 AM

It boggles the mind. And they went interest only for the first ten years. Yikes! I can't imagine shelling out around 1800 a month and not getting any equity. I don't know what rents go for around there, but for that much you might as well pay rent and have less responsibility. I guess they will walk away with any increase in value the house might have, but even that is a dicey proposition right now.

Edited by Honey Wheeler, Aug 29, 2007 @ 12:32 PM.

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#52

twinks

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Posted Aug 29, 2007 @ 8:04 AM

Paying interest has tax benefits. They may have money in the bank and want to save it *in case* they do have an emergency, like the furnace. Still I can't imagine buying without a downpayment.
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#53

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Posted Aug 29, 2007 @ 11:26 AM

It's wacky reasoning to me, too, to buy with absolutely nothing down, especially for a place you plan to live in and make your home. Real estate investing is a different matter and that's where possibly it might make sense to buy with nothing down, improve it, and sell it fairly quickly.

But these folks didn't intend to do that, right? I think they got very bad advice from their financial planner. Their plan was to put the "extra money" that would have been equity into investments. It's true that if you don't accelerate payments, you barely get any equity anyway in the first few years. BUT - just doing the math, with a $279,000 mortgage at 7% that amortizes normally, after 10 years they would have paid down about $40,000 on the mortgage, and would have had a payment of $1995 a month.

Didn't the show say that their payment was around $1890, if I'm remembering correctly? So for the sake of $100 a month lower payment, they're giving up building any equity at all.

Makes no sense to me, unless they figure that their salaries will increase and they can start making extra principal payments soon, but still have a little breathing room in the lower payments if necessary. Otherwise they are really at the mercy of whatever the rates might be 10 years from now - and considering they're young, they're likely to have little kids by that time and even more demands on their budget.

Very short-sighted in my opinion, but hey, I'm not them. Maybe they've got a Plan B ready to go.
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#54

Alyce

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Posted Aug 29, 2007 @ 11:49 AM

Plan B - Foreclosure
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#55

EmbiggenedSoul

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Posted Aug 29, 2007 @ 4:21 PM

Hi all, since I'm in the process of buying my first place, HGTV has become my new crack, and this show in particular. I alternate between excitement at what I got for the money I'm planning on paying, and despair at what I got for the money I'm planning on paying. I guess it all really is location, location, location.

I also saw that episode yesterday with that couple and was completely shocked at the 100% financing, interest only, and what a super high interest rate they were paying on that 2nd loan. I wonder if they had really high credit card debt that they were hoping to pay down? Or maybe the guy fancies himself a day trader who can beat the market by a mile? I guess I'm either just super risk-averse or old-fashioned, because I'm putting 10% down and getting a good old fixed-rate mortgage. Sounds like I'm the only one, based on this show.

I also liked the episode with the bachelor guy in Boston who was super-picky and had been looking for 2 years. I was a little surprised that he went with the unfinished place, but it was a great choice for him because he could get what he wanted, and ended up with a really great location and cool pad. Loved the exposed brick and beams. His analness was pretty funny.

Edited by EmbiggenedSoul, Aug 29, 2007 @ 4:23 PM.

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#56

Maddog1219

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Posted Aug 29, 2007 @ 4:33 PM

Glad you all are as boggled as I am on the whole interest only thing. I had to rewind the TiVo to make sure I heard it all right. I know little about this but it just seems like an excuse to get in over your head. Doesn't anyone put the traditonal money down and get a regular fixed interest mortgage? Seems like there's too much wheeling and dealing going on! Even going with less money down and paying PMI for a while seems like a better way to go, but I am no professional. I agree with everyone that $1800 a month for the home and not getting any equity seems like throwing money out the window. Not sure what "investments" they had. The graphic said interest only loans were for very disciplined financial managers. Hope they are. They seemed like a nice couple that was ready to settle down so I wish them the best. Mr. Maddog and I bought our second house a year ago with 20 pecent down with equity from the first...excellent fixed rate for the next 30 years. With all the maddness in the market right now, makes me feel great. I am house poor right now, but I know it's going to get better. They aren't house poor right now and they have no idea what will come.

Edited by Maddog1219, Aug 29, 2007 @ 4:36 PM.

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#57

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Posted Aug 29, 2007 @ 6:02 PM

I would bet any money (well, not the mortgage ;-) ) that the "financial planner" who recommended the interest-only mortgage is also going to be the one handling their "investments."

The first house always seems like a whopper of loan. My parents' first house, post-WWII, was something like $5,000, and they thought that was SO much! I happened to look up that house on a real estate site - it's now worth in the neighborhood of $450,000 or so.

My first condo was $60,000. Sold it years ago; condos in that neighborhood are now selling in the upper $300,000s. We've been in our current house for about 18 years, and it's roughly 2 and 1/2 times what we paid for it, which seemed so high at the time.

If you hang in there, and buy a well-constructed house in a good location, and keep paying down that principal and don't treat your house like a piggy-bank with constant re-financing, you'll do fine. People who remember that their house is supposed to be the roof over their heads, not a constant money machine, generally come out all right financially.
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#58

Alyce

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Posted Aug 29, 2007 @ 7:51 PM

I guess I'm either just super risk-averse or old-fashioned, because I'm putting 10% down and getting a good old fixed-rate mortgage. Sounds like I'm the only one, based on this show.


Good for you EmbiggenedSoul! You are smart!! You might want also want consider taking a 2nd mortgage for the other10% so you don't have to pay PMI. You will benefit because you can write off the interest payments on the second mortgage. (You cannot write off PMI.) That is what I did because I only had about 14% to put down when I bought my condo. At the time (1998), the mortgage companies had just started doing the second mortages so you didn't have to pay PMI and they wanted you to do 15-year interest-only loans. I figured that it would only cost me a dollar or so more for principle & interest insisted that I be allowed to pay principle AND interest. Make sure you insist on paying both -- the difference will only be a few dollars!

They agreed to let me do this. Since the 2nd mortgage you take is a couple percentage points higher than your main mortgage, I have been paying extra on this whenever a have any extra money. And I will be lucky to have this paid off soon. But if I would have went with interest-only (like they wanted me to, I would have had a the ENTIRE LUMP SUM to pay off in 2013!!)

These people on this show get the worst financial advice ever!! I hate would to see these people in five or ten years! I fear the mortgage people are only pushing what is making them the biggest commisions and not looking out for the client's best interests!

Remember that girl that they told her if she used their mortgage company she would get a FREE washer/dryer, and refrigerator. Then it ended up that she had to do a 40-year mortgage, and all kind of other bad stuff. She thought she made out like a bandit w/that free stuff. Poor thing doesn't realize how much they REALLY cost her!!
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#59

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Posted Aug 29, 2007 @ 7:55 PM

I figure that the "experts" the HO's are getting their advice from are either A) something they read on the internet, B) something they saw on TV or C) a brother-in-law, best friend, uncle, co-worker, or old college roommate. You know, really reliable sources for financial wisdom.
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#60

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Posted Aug 29, 2007 @ 8:13 PM

All of the buyers getting 100% financing the past few years are one of the reasons for the horrible problem with mortgage companies right now. They financed the entire purchase for a home with an over inflated purchase price and now they are upside down in the mortgage(s).

With the housing market being the worst in twenty years these folks have little chance of selling these heavily mortgages homes and can't even refi the darn things.

Makes me happy I didn't jump on that bandwagon.
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