[Poll] Mini bubble deflating?

[bones]

Fyij

 

[Irvinecommuter]

What I don't get is why would they even bother with buyers who could only afford 10% down?  It is not as easy getting a loan now.  Any insights?

Maybe young dual-income couples I'm guessing?

My two friends, a married physician couple, fit this bill. They're one year out from completing their medical training. Both are in surgical subspecialties. Because it's only been one year, they have a small downpayment but their combined income is >600k.

At $50k/mo they can swing a Trevi plan 3. 

Unfortunately, these professional's income most likely are W2 and almost half of it goes to tax.  After tax, student loan etc, their net is still high but not as high as it seems to be.

Yeah it must suck netting 600K a year.

Most likely netting 300K a year off 600K gross. How would you feel about being in that situation.

Pretty darn good.

 

[paperboyNC]

Most likely netting 300K a year off 600K gross. How would you feel about being in that situation.

Like I'd have over 100K/yr tax-free to spend than I do now. Oh yea - and I could put money into plenty of things to get a tax break like a 401(k), mortgage interest, student loan interest, etc.

 

[nyc to oc]

Most likely netting 300K a year off 600K gross. How would you feel about being in that situation.

Like I'd have over 100K/yr tax-free to spend than I do now. Oh yea - and I could put money into plenty of things to get a tax break like a 401(k), mortgage interest, student loan interest, etc.

you lose almost all tax breaks at that level. forget about mortgage interest deduction, property tax deduction, student interest deduction, even dependent children's exemption and your own personal exemptions.

another reason why it makes little sense to borrow a big mortgage at that income level. you don't get the tax breaks. 

 

[Rice Vino]

I would expect to see those condo/townhomes drop in price first.. then the smaller SFRs.

Condo/townhomes + smaller SFRs... that's, what, 50%+ of Irvine's housing stock?

 

[Paris167]

What I don't get is why would they even bother with buyers who could only afford 10% down?  It is not as easy getting a loan now.  Any insights?

Maybe young dual-income couples I'm guessing?

My two friends, a married physician couple, fit this bill. They're one year out from completing their medical training. Both are in surgical subspecialties. Because it's only been one year, they have a small downpayment but their combined income is >600k.

This is a prime example, we've been there personally at one point. This is why there are many banks that offer physician loans with 5% down.

And people wanting a lower down payment doesn't mean they cannot afford it by any means. At 4.5% interest rate why would you want to sink all your cash capital into a home when it can be used elsewhere giving you a higher rate of return? There are people that have no problem paying $8k to $10k mortgage a month but they'd rather invest their $300k elsewhere like in the market or on a business.

 

[Paris167]

What I don't get is why would they even bother with buyers who could only afford 10% down?  It is not as easy getting a loan now.  Any insights?

Maybe young dual-income couples I'm guessing?

My two friends, a married physician couple, fit this bill. They're one year out from completing their medical training. Both are in surgical subspecialties. Because it's only been one year, they have a small downpayment but their combined income is >600k.

At $50k/mo they can swing a Trevi plan 3. 

Unfortunately, these professional's income most likely are W2 and almost half of it goes to tax.  After tax, student loan etc, their net is still high but not as high as it seems to be.

Not if you own your own practice, are an independent contractor or are a partner in a practice.

I agree - all tax benefits tend to be unreachable for most physicians. It's why working under a W2 is like simply handing half of your pay in taxes

 

[bones]

Fhnn

 

[Irvinecommuter]

Most likely netting 300K a year off 600K gross. How would you feel about being in that situation.

Like I'd have over 100K/yr tax-free to spend than I do now. Oh yea - and I could put money into plenty of things to get a tax break like a 401(k), mortgage interest, student loan interest, etc.

you lose almost all tax breaks at that level. forget about mortgage interest deduction, property tax deduction, student interest deduction, even dependent children's exemption and your own personal exemptions.

another reason why it makes little sense to borrow a big mortgage at that income level. you don't get the tax breaks. 

Does anyone get student loan deduction in Irvine?  Isn't the phase out pretty low?  I remember I couldn't even deduct it first year out of college.  Haven't bothered since.

IRS says $75,000 for individual and $155,000 for married couples...so probably not.

 

[usctrojancpa]

Most likely netting 300K a year off 600K gross. How would you feel about being in that situation.

Like I'd have over 100K/yr tax-free to spend than I do now. Oh yea - and I could put money into plenty of things to get a tax break like a 401(k), mortgage interest, student loan interest, etc.

you lose almost all tax breaks at that level. forget about mortgage interest deduction, property tax deduction, student interest deduction, even dependent children's exemption and your own personal exemptions.

another reason why it makes little sense to borrow a big mortgage at that income level. you don't get the tax breaks. 

Maybe so but you can put the funds in relatively safe investments and get a return that is higher than the interest rate on the loan.  Mortgage debt is one of the cheapest debt out there and if used responsibly can benefit the borrower. 

 

[jmoney74]

What I don't get is why would they even bother with buyers who could only afford 10% down?  It is not as easy getting a loan now.  Any insights?

Maybe young dual-income couples I'm guessing?

My two friends, a married physician couple, fit this bill. They're one year out from completing their medical training. Both are in surgical subspecialties. Because it's only been one year, they have a small downpayment but their combined income is >600k.

At $50k/mo they can swing a Trevi plan 3. 

Unfortunately, these professional's income most likely are W2 and almost half of it goes to tax.  After tax, student loan etc, their net is still high but not as high as it seems to be.

Yeah it must suck netting 600K a year.

Most likely netting 300K a year off 600K gross. How would you feel about being in that situation.

I've succeeded in life and made the folks proud.