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Published on 11/21/08
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HOUSE HUNTER
CASSIE BISSELL
By day, 29-year-old Bissell works as a printer’s receptionist, which allows her to pursue her true passion: acting. Her boss lets her set her own schedule to accommodate auditions and rehearsals; in exchange, she works for an hourly wage without full benefits.
Bissell doesn’t think she can afford to buy right now. “I don’t have any money to put down, and my income is variable.” However, despite earning only $27,000 in 2007, she’s managed a feat few Americans can boast: She has no debt. She’s even socked away $1,300 in an Individual Retirement Account. Bissell says her credit score is probably excellent. “I pay off my credit cards in full every month and have never been late on payments.”
She wonders if her responsible fiscal habits could possibly earn her a mortgage large enough to purchase a one-bedroom condo. She’s hoping for an old building with some architectural charm and wants to avoid high-rises—she has outdoor cats. Bissell can be flexible in terms of neighborhoods since she has a car, but the suburbs are out.
Expert opinions
Chaz Walters
“With no money down, Cassie could qualify for up to $150,000 through a Federal Housing Administration–insured mortgage. I’m sure we could find her a condo for $150,000 or less, and with the tax breaks that are available to home owners, she may have more money to work with than she thinks.”
Gisella Tomasio
“Right now is not the time. She doesn’t have any cash reserves and should have at least three to six months’ worth of living expenses saved on top of money for a down payment.”
Judge Mathis
“Even though Cassandra is debt-free and has money saved in an IRA, she isn’t accounting for life events that may be out of her control. Those can prove costly. My opinion is [she ought] to wait a few more years.”
VERDICT:
Alex
Mon, Mar 24, at 10:44am
I'm a Realtor and find myself embarrassed by Chaz's advice. Low income? Buy. Huge debt? Buy. No savings? Buy. Seriously, Chaz, step away from the kool aid.
jswede
Fri, Mar 21, at 12:31pm
hey about telling the whole story Chaz? "With 100% financing he/she could afford a $_____ house. Of course, he/she would also a have to pay huge sums in yearly property taxes, monthly assessments, take on market risk that may bottom out down another 10-15% from here, leaving the buyer in $25-100k of debt should they be forced to sell. Which they likely will have to, because they have no savings. It's all good though, because I got paid a commission." ****ing sick slimeball
jswede
Fri, Mar 21, at 10:45am
Lastly, in case anyone else was still listening to these idiots: Let's look at a 30yr amortizing loan. Which is what most people will get into (after this interest-only debacle anyway): lets say a 30yr 6% loan for $500k. You'll pay $3k monthly. $36k a year. After 5 years, you've paid about $180k. Of that $180, ~85% has been interest. You've paid off only about $30k of the house. Great way to become a home "owner", huh?
jswede
Fri, Mar 21, at 10:37am
and Gisella -- as an advisor -- how about levelling with people? Why not tell them the difference between renting and "buying" (with no/little money down using a mortgage)? It's about as simple as this: when you rent, you pay someone for the use of their property; when you "buy" with a mortgage, you pay some one for the use of their money. You're not an "owner" with no money down. Not even with 20% down. Oh, and also, when you buy you take market risk and pay huge taxes/assessments
jswede
Thu, Mar 20, at 09:09pm
Chaz says: "With 100% financing, he/she could afford a $______ house"
jswede
Thu, Mar 20, at 09:03pm
let's see.... "no money down" is a recommendation - with no disclaimer - just as long as Chaz gets paid. if your subjects take that advice there's a chance each of them will not get out of debt for decades.
jswede
Thu, Mar 20, at 08:59pm
It's nice to see that TimeOut has learned nothing in the last few years. (and that Chaz from the billboards is as big of a slime-ball as I always thought he'd be)
benjamin
Thu, Mar 20, at 12:00pm
Great - ask a real estate agent (who makes something like 5% of the purchase price) if someone should buy or rent - no chance of a bias there!
