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Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

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Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#151

Post by IMSAI8080 »

xyzzyz wrote: post #71
colinb wrote: post #50

Earlier quoted context omitted.

No. That’s not the case. I had a fixed rate mortgage in the UK. Now I have one in Ireland. Two of my colleagues have taken them in the last couple of months. They’re very common. But.. in both countries such terms are for a relatively short period. E.g 5 years fixed changing to SVR for the remainder of the loan. I haven’t heard of loans fixed for the entire duration. I would’ve got one if I had found it. I can’t spea…

That’s not what Americans mean by “fixed rate”. In US, that means 30, or more rarely 15 year mortgage, where the rate is fixed for entire duration. The mortgage where it’s only fixed for some initial period is called “adjustable rate mortgage”. Your comment just supported the person you replied to being correct, that fixed rate (in US sense) mortgage market is nonexistent in most of Europe.

They're often called "lifetime fixes" or "fixed for term" in the UK. You can easily get them. The term customers choose is typically 25 years rather than 30. However they are currently running at an interest rate of a little under 4% which is much higher than the rate offered on a typical 5 year year fix. This makes them unattractive when you can just perpetually keep re-mortgaging on 5 year fixes.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#152

Post by llampx »

cammikebrown wrote: post #15
theferalrobot wrote: post #6

Earlier quoted context omitted.

I’m seeing 5.0% most places (see ally bank). Still higher than its been but not pushing 6% by any stretch.

It's pushing 6% if you have worse credit (700-750). But don't worry about that, NINJA loans are back: https://i.redd.it/wnzuveooo5w81.jpg

No Income, No Job anything?

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#153

Post by peyton »

itsoktocry wrote: post #121
hans1729 wrote: post #96

Earlier quoted context omitted.

I did not miss those people, but my wording was loaded and so the point got lost in translation. I implicitly captured them under b) "[...] it's dumb to buy estates where the price is set by people and institutions that have n times your own income/net worth" , where dumb is a loaded term for your > "to the point where it no longer seems rational" . > But crucially, the presence of this group of people arguably turns…

> Going in debt for 30-40 years has zero appeal for me, it just seems like a terrible move. Buying a house isn't for everyone, sure. But this is a serious misunderstanding of what "going into debt" is. You're not buying a TV you'll throw out in 5 years, you're buying an asset class that has a history of appreciating in value over 100+ years that you can get incredible leverage on. In the US and Canada, at least, buyi…

Not sure I want to leverage up on housing through the boomer die-off. Plus, there are way better investments.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#154

Post by rco8786 »

JetAlone wrote: post #90

Buying a home mortgage is signing yourself over to a lifetime of servitude and uncertainty if you lose your income stream. Buy a property out of pocket to live in and make the most of a DIY life at a fraction of the cost and an odd stress differential, or just keep renting and be agile enough to roll with the punches.

This is objectively false.

The vast, vast majority of homeowners do not foreclose ever. It’s no more “servitude” than paying the person who holds the note to rent from them instead of holding the note directly.

You’re responsible for maintenance and upgrades. And it’s harder to move to a new place if you own vs rent. These things are true. But “lifetime of servitude” is comically hyperbolic and ignores all the positives of homeownership that historically vastly outweigh those negatives.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#155

Post by pooper »

ddorian43 wrote: post #143
pooper wrote: post #114

Earlier quoted context omitted.

A real estate investment newsletter suggests that for a successful real estate investment, as a rule of thumb you should be able to charge almost one percent of the cost of the house as rent because a rational investor shouldn't count on the value of the house going up. I am curious what you guys think of this statement. I think the idea is if the potential rent you get out of your investment is too much under one pe…

> A real estate investment newsletter suggests that for a successful real estate investment, as a rule of thumb you should be able to charge almost one percent of the cost of the house as rent because a rational investor shouldn't count on the value of the house going up. Does this have all taxes(property,rent,etc) included in the cost?

As far as I remember, no. This is just the sticker price. This is a conservative estimate for people who are not real estate professionals, probably looking to buy a house to rent for the first time. Based on the other comment reply, it sounds very conservative to dissuade people from making stupid decisions.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#156

Post by JackFr »

pjc50 wrote: post #105
hans1729 wrote: post #96

Earlier quoted context omitted.

I did not miss those people, but my wording was loaded and so the point got lost in translation. I implicitly captured them under b) "[...] it's dumb to buy estates where the price is set by people and institutions that have n times your own income/net worth" , where dumb is a loaded term for your > "to the point where it no longer seems rational" . > But crucially, the presence of this group of people arguably turns…

> Going in debt for 30-40 years has zero appeal for me Going into debt at the lowest interest rate you'll ever be offered to buy a leveraged asset that's likely to increase in price and reduce the overhead you pay on your largest expense, housing, and hedge against the risk of rent increases and security against the whims of landlords? > Germany Oh, Germany. Somehow Germany has escaped the constantly increasing house…

> Going into debt at the lowest interest rate you'll ever be offered to buy a leveraged asset that's likely to increase in price

To a large extent house prices are sensitive to interest rates. A bank will look to your income and say you can make a monthly payment of $X. At historically low interest rates that’s gonna mean a bigger loan. As everyone’s ability to borrow goes up, so do the prices. As rates rise, for the $X dollar payment, the ability to borrow declines, and that puts a down draft on house prices.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#157

Post by lmt55 »

peyton wrote: post #153
itsoktocry wrote: post #121

Earlier quoted context omitted.

> Going in debt for 30-40 years has zero appeal for me, it just seems like a terrible move. Buying a house isn't for everyone, sure. But this is a serious misunderstanding of what "going into debt" is. You're not buying a TV you'll throw out in 5 years, you're buying an asset class that has a history of appreciating in value over 100+ years that you can get incredible leverage on. In the US and Canada, at least, buyi…

Not sure I want to leverage up on housing through the boomer die-off. Plus, there are way better investments.

Doesn't the boomer die-off mean that the boomers' children will be inheriting, not just homes, but piles and piles of liquid assets, much of which they will use to get into the housing market?

After all the boomer generation, on average, has over-provisioned for old age, whereas millenials are still underhoused.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#158

Post by nemo44x »

JetAlone wrote: post #90

Buying a home mortgage is signing yourself over to a lifetime of servitude and uncertainty if you lose your income stream. Buy a property out of pocket to live in and make the most of a DIY life at a fraction of the cost and an odd stress differential, or just keep renting and be agile enough to roll with the punches.

Paying cash in a low interest world is a bad strategy for a number of reasons.

1) The cash is better used to diversify across other investments. These investments will likely out-earn the mortgage interest.

2) The government gives you tax write offs for mortgage interest. Not as beneficial for everyone as it used to be but there’s a good chance you will be able to deduct if your mortgage is in a high cost of living area. Up to $750k in mortgage debt.

3) A home is an illiquid asset. By borrowing the money and keeping your own money in liquid assets you gain flexibility and can jump on good opportunities.

Agreed though that having tons of runway is wise.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#159

Post by lmt55 »

celticninja wrote: post #137
lmt55 wrote: post #109

Earlier quoted context omitted.

I own a house in London. Its total value increase since I bought it 5 years ago is much less than my salary.

You bought near the peak of the market then. Definitely been some downward pressure on prices since covid as people sold up in London, took that premium price and moved to larger properties elsewhere. Not saying it was a bad investment, just that the return will take longer than it has in the past.

It doesn't matter where I bought. If I haven't made much money in the last 5 years, nor has anyone else (on average), regardless of how long they've owned their property.

The suggestion that 'the return will take longer than it has in the past' is a prediction with no evidential basis.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#160

Post by ssharp »

streblo wrote: post #134
JetAlone wrote: post #90

Buying a home mortgage is signing yourself over to a lifetime of servitude and uncertainty if you lose your income stream. Buy a property out of pocket to live in and make the most of a DIY life at a fraction of the cost and an odd stress differential, or just keep renting and be agile enough to roll with the punches.

Most people don't do the math and realize that over a long enough time horizon a 30 year fixed mortgage will cost you less than purchasing the home outright. This assumes you take the money you would have sunk into the home and instead invest it at a higher rate of return, which is an option available to most home owners.

Well most people aren't going to take the money and invest it at a higher rate of return, either.

With 30-year rates around 6% right now, the math becomes a lot tighter as well. Where are you going to find 6%+ investments right now?

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