Rocket Mortgage to trim 8% of workforce as home-loan market shrinks • Hacker News Board

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

#261

Post by [deleted] » Thu, Apr 28, 2022, 1:57 PM UTC

smugma wrote: post #247

Beldin wrote: post #129

Earlier quoted context omitted.

Around here, monthly rent is as high as or higher than mortgage payments. With mortgage payments, you accrue ownership (for the "standard" mortgages around here). If you expect house prices to remain stable or increase during your residency in a property, ownership financially makes more sense.

Most places in the US, a mortgage from 5-10+ years ago will be less than renting an equivalent place, but a recent mortgage will be higher because prices have gone up so much. This is generally true because prices generally go up. My brother almost bought a $200K condo in SF 30 years ago but it was slightly out of reach on his $60K Sun micro income, and his $500 room for rent was cheaper. The condo has gone up about…

[deleted]

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

#262

Post by snarf21 » Thu, Apr 28, 2022, 1:58 PM UTC

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.

I disagree completely. You are trading risks and the government protects you in buying. The big problem is that people want to buy a 5 BR / 4 Bath that is the max they can afford so they do get stuck in that cycle. I didn't grow up poor by any means but today's kids need a 12x12 BR and sometimes on suite. We had 2 bunk beds and four teenage boys in a 10x10. People would be better served by buying the cheapest and smallest house that will actually function for them, make small upgrades over time and then play the upgrade game. Doing so by only moving to a bigger and nicer house when they can keep their payment and mortgage end date the same.

You can't control rent prices any more than you can employment. At least with buying, you will likely have some appreciation eventually. The government gives you back the interest you pay. You have an asset you can borrow against in bad times. You are paying the future's housing bill at today's prices. Inflation is your fried after you have bought your house. A house is the best way 90% of Americans have to build equity. Additionally, with all the NIMBYism everywhere, the likelihood of appreciation is almost guaranteed (outside of dead towns)

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

#263

Post by lmt55 » Thu, Apr 28, 2022, 1:59 PM UTC

mring33621 wrote: post #254

lmt55 wrote: post #91

Earlier quoted context omitted.

I think you have missed a source of demand, and I think it's important. As housing became more and more expensive to young professionals, some people in this group have worked harder and harder to buy property, even to the point where it no longer seems rational. For example, parents taking a lot of wealth out of their retirement savings or their own homes to assist children in buying. Professionals are working more…

Thank you for your comment. I think this is interesting: "Higher rates will make current prices unsustainable. As soon as they correct to the point where monthly payments are back to what they were last year, there will be buyers, only too happy to overextend themselves to get out of renting." So, higher rates are effectively a transfer of wealth from homeowners to banks? How does this serve to combat the current inf…

I don't understand how you draw this conclusion from what I said.

Regardless of high or low rates, banks borrow low and lend high, and live on the difference.

High rates, if you want to express yourself in those terms, a transfer of wealth from people with debt to people with assets.

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

#264

Post by almost_usual » Thu, Apr 28, 2022, 2:00 PM UTC

antiframe wrote: post #229

Beldin wrote: post #129

Earlier quoted context omitted.

Around here, monthly rent is as high as or higher than mortgage payments. With mortgage payments, you accrue ownership (for the "standard" mortgages around here). If you expect house prices to remain stable or increase during your residency in a property, ownership financially makes more sense.

Why do people compare monthly mortgage amount and rent? It misses several big elements to housing costs: taxes, maintenance, closing costs, realtor costs, and opportunity cost of the money tied up. Renting vs buying comparisons need to account for lot more than those two numbers but that's all I see posted most of the time.

You can write off a good chunk of the interest paid on a mortgage come tax season. Saved me thousands of dollars in taxes this year.

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

#265

Post by havelhovel » Thu, Apr 28, 2022, 2:02 PM UTC

JohnWhigham wrote: post #242

streblo wrote: post #134

Earlier quoted context omitted.

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.

Don't forget to factor in all the maintenance costs that one doesn't have to worry about when renting.

You’re responding to a comment discussing the CBA of getting a mortgage vs paying all cash, not buying a house vs renting.

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

#266

Post by sokoloff » Thu, Apr 28, 2022, 2:12 PM UTC

tannedNerd wrote: post #249

sokoloff wrote: post #240

Earlier quoted context omitted.

Exactly. If I had a choice to invest at arms-length at a company who had good underwriting standards but loaned only based on liquid assets and W-2 income or in a company who very carefully underwrote loans by looking in careful detail at every applicants’ unique situation, I’m more inclined to invest in the former.

And now your company you invested is worth half because they were too strict on loaning and have entered the death spiral where they aren’t bringing enough new loans in and fold or get bought out for much less then your original stock price.

That requires the profit from the number of loan originations to non-W2 workers to be enough higher than the costs and errors produced by detailed human underwriting (against adversarial applicants, which both W2 and non-W2 applicants are, but W2s are harder to fudge).

It’s surely possible for that assumption to be true, but I start out skeptical.

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

#267

Post by coredog64 » Thu, Apr 28, 2022, 2:13 PM UTC

redshirtrob wrote: post #237

Has anyone actually used Rocket? Every time I (or a friend) have looked at them they have higher closing costs and wanted multiple points to close the mortgage. I was able to do way, way better by going with a local bank, as did my friends. The only thing I can figure is they are better for folks with "good" (not "excellent") credit and can maybe close the loan faster.

Something to note about your local bank/CU. They might originate the loan, but as sure as water is wet they’re going to sell it to someone else for service.

If you have a good working relationship that you can used for good terms, then go for it. But don’t go with a local bank because you think you’ll continue to work with them.

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

#268

Post by onlyrealcuzzo » Thu, Apr 28, 2022, 2:14 PM UTC

bitexploder wrote: post #184

onlyrealcuzzo wrote: post #173

Earlier quoted context omitted.

How soon? If trends continue, prices will start falling. You might be able to offer under asking, too. I bought 15% under asking in October of last year. Chicago didn't really go crazy like Phoenix or Palm Springs...

Most of Denver region had been hot as well.

Basically everywhere beside Chicago and NYC went up >10%.

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

#269

Post by tristor » Thu, Apr 28, 2022, 2:20 PM UTC

simulate-me wrote: post #239

nsteel wrote: post #228

Earlier quoted context omitted.

As I understand it, it's this refinancing that leads US citizens in the UK ending up with a surprising US capital gains bill after they re-mortgage their UK property. And we also (normally) have ERCs in the UK so as usual, the rest is the worst of both worlds. Ideally one could renounce the citizenship, oh wait...

The IRS does not consider a refinance (even a cash-out refinance) to be a capital gain. The IRS also allows for 250K (500K if married) of tax-free capital gains on the sale of a primary residence. Maybe you misunderstood your friends’ situations.

This is only true for a primary residence located in the US. If it’s a foreign asset, it’s taxed normally. The IRS deeply screws expats.

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

#270

Post by webinvest » Thu, Apr 28, 2022, 2:28 PM UTC

xwdv wrote: post #178

ssharp wrote: post #160

Earlier quoted context omitted.

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?

You don’t actually have to invest at all. Over time inflation makes your payments cheaper and cheaper. By the time you reach the end of your 30 year fixed mortgaged in the year 2052 you’re still paying in 2022 dollars which is probably less than half of what the average mortgage in 2052 is. If you invest on top of that and get some small decent return you come out even more on top.

If you aren’t going to invest your principal in something that will earn a higher interest rate than the loan interest rate on your house, then taking a loan and giving away more money to your bank is not logical or smart.

A $300,000 home with a 20% down payment and 80% borrowed at 5.0%* will cost you __$523,813.88__ over the 30 year life of the loan.

Logically, cash just sitting in the bank 1% or less in interest should go towards your loan costing more than 1% or towards avoiding $5k-$8k of closing costs on a mortgage.

*Today’s interest rates are 5.125% for a 30 yr fixed rate mortgage.