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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

#311

Post by rchaud »

hans1729 wrote: post #96
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…

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…

> With that kind of money, you can buy three small companies in Germany, or stop worrying about retirement, etc.

What are the closing costs of purchasing a whole company? How much would you pay for an accountant to go over the books and a lawyer to go over the forms?

I don't know how much homes cost in Germany, but surely if people have 600k to spend, they would buy companies too, would they not? Why do they buy homes instead?

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

#312

Post by hnuser847 »

gadflyinyoureye wrote: post #206

I use to be a shareholder of Rocket. Then I tried to get a mortgage with them. I'm self-employed. I make about 200k/year. I had 0 debt (I paid off my house the prior year). I had 20% for up to 350k. I had an 812 credit score. When I applied they asked for my P&R statements for 2 years. The current year showed a $400 deficit (which was due to charitable giving). They said that I was losing money.Therefore I was too gr…

Rocket mortgage is a Fannie/Freddie mortgage mill. If the mortgage doesn't tick all the conventional mortgage boxes and can't be instantly sold the government, they won't write it. You're much better off working with local banks or credit unions, who may be willing to keep the loan on their books.

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

#313

Post by rchaud »

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.

Many banks set up blended payments so your mortgage payments include property tax. Closing costs occur at the time of purchase and are one-time fees, not recurring. As for the opportunity cost, it's only relevant if your mortgage+taxes are higher than what you were paying in rent.

The big unpredictable element is home repair costs.

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

#314

Post by jjav »

IMSAI8080 wrote: post #151
xyzzyz wrote: post #71

Earlier quoted context omitted.

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.

> 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.

Renewing after 5 years will presumably get you whatever rate is then? Which might be much higher.

It's always better to get a fixed rate (for the life of the loan) mortgage. If rates go up, you're protected. If rates go down, you can refinance to cheaper rates.

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

#315

Post by dominotw »

Raed667 wrote: post #5
alexb_ wrote: post #4

Earlier quoted context omitted.

"Cracking down on Airbnb"... you say this as if Airbnb is a horrible thing or something LOL

Airbnb is a horrible thing if you (like me) live in a tourist city and making rent inaccessible to the local residents

why do you live there though. Can't you ask your employer to match the deficit.

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

#316

Post by dominotw »

jimbob45 wrote: post #74
alexb_ wrote: post #4

Earlier quoted context omitted.

"Cracking down on Airbnb"... you say this as if Airbnb is a horrible thing or something LOL

Think about a hypothetical city where 100% of the properties are AirBNBs. There will be no source of employees for any local businesses because there are no long-term residents. There is no vested interest to improve the city via taxes and volunteerism, because no one truly lives there. No one will move to that city because the property rates are so absurdly inflated thanks to AirBNB rates. It’s an absurd example but…

this is basically all mountain towns now.

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

#317

Post by MarketingJason »

Just closed financing on a home. Rocket had a comparable rate but the real no-go for us was their very-limited rate-lock option. With interest rate trends what they are right now, we really needed a 200 day + rate lock with a float-down in case things changed. Other lenders (builder, ownup options, local banks) offered those and the option to buy points and apply them if we were able to float down. Rocket seemed very slow to adjust to the market forces with competitive options.

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

#318

Post by jjav »

oliwarner wrote: post #55
cammikebrown wrote: post #2

Seems like the bubble burst is going to be more sudden than we thought. 30 year mortgages are suddenly at nearly 5.5-6%, listings are sitting on the market for longer, and multiple cities are cracking down on Airbnb.

Whole-term-fixed rates are pretty uncommon in Europe. Fixes of 2, 5 sometimes 10 years are products most providers offer, but as the term increases, the rate shoots up, to offset rate uncertainty. My question is: why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty? Remortgaging every couple of years takes a bit of time, and shopping around, but is much cheaper.

> why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty?

At least in the US it is always better to get a fixed rate loan (meaning fixed for the life of the loan, typically 30 years).

This means your mortgage payment can never go up no matter how high rates climb in the market.

But if rates go down, you can always refinance to a lower rate and ratchet your payments down and lock them there.

It's as close to a free lunch as thing come. Your housing payment can never go up but can only go down.

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

#319

Post by Dave3of5 »

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.

It's very hard to compare some of those things as they differ from home to home and country to country. Here in the UK most landlords will do extreme minimal maintenance and taxes on the house are paid directly by the tenant and not included in your rent.

"Realtor costs" are again different some estate agents in the UK charge a % of the sale price others a minimal fixed cost.

I'm sure that these things differ massively in different countries as well so it's hard to put an average number on that.

In terms of opportunity cost of the money again it depends on how you would invest that money you could put it in something very high risk and show a huge imbalance in buying a home vs investing in crypto or something like that. In the UK most low risk savings accounts will track lower than inflation on a property only the stock market will track higher but again that's higher risk and so not comparable. Also most savings accounts in the UK are capped at a max amount that can be saved per year.

As I said though if you try to compare mortgage vs something like stock market it's not really comparable. Also to note the large index funds in the USA track much higher on average than most other countries.

I've seen people use the S&P as an example that house prices don't track to the same amount and that you can compound any gains to make large sums of money. What's interesting about this is that the reason you make so much money with that model is that compound interest is non-linear in growth which means over say 40 years you make most of the growth at the end of the period (Literally in the last 20%). This also means that if the end of your growth curve ends on a bad few years for the S&P you'll do much worse than the average so the risk is still very high on even index funds.

Overall though my current mortgage cost is 2.5 x lower than rent for a comparable property. So you'd have to factor in the opportunity cost of that extra per month I save not paying into rent into your equation as well.

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

#320

Post by conanbatt »

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…

> buy a leveraged asset that's likely to increase in price and reduce the overhead you pay on your largest expense

Oh boi. When you buy this you are giving all this benefit to the seller that takes these into account. You are not making a profit off of it unless the value increases more than the market expectation for it.

So its a leveraged bet that it will be better than expected by the market, and if it goes the other way you are toast.

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