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Balderdash. There are many people who can afford a home and not have 25% just hanging around for a downpayment. I can see the minimum of 10%. I think 25% is an excessive requirement to basically right the sinking ship.
If you have excellent credit you don't need 25%. If you have middling credit and don't have it, you probably can't afford the house. This is the big reason the housing crisis started. People think being able to pay the monthly is the same as being able to afford a house. It isn't.
What else would help? If there was a moritorium on residential construction in Austin, and in the U.S. for that matter. this country doesn't need any more new construction. New housing developments starting at 200K right next to existing 5-year-old neighborhoods with the same houses on sale for 180K is not helping anyone involved in that situation. There are housing starts all over south Austin right now, and the builders are selling the community down the river to squeeze out a slim profit margin. A large portion of the workforce has had to adapt and retool, and it's time the homebuilders did as well. I would like to see DR Horton et al stripped of their building permits, and forced to start applying to rehab houses urban neighborhoods instead.
interesting - my parents were just selling a vacation property and had a contract fall through because the bank demanded 25% instead of 20% at the last minute. I thought it was because it was a second home? Maybe the banks are tightening restrictions even more.
probably was due to it being a vacation or second home and the lender was a little slow to pick up on that fact -- tells me there are still some individual lenders that operate in a grey area ---
lenders will continue to tighten qualifying requirements by adjusting MI and FICO (now 640) but i doubt that FHA with 3.5% down will disappear (may go to 5%) -- doing so will completely freeze out the first time buyer and without them the move up market will disappear as well --
personally, i believe that "tranching" on the Credit Default Swap's is still taking place with the ultimate goal of re-balancing their value upwards thus making the system "whole" (or worth what they say they are) -- with the foreclosures being such a burden, this process will take awhile and the first time buyer plays key role in its success.
Regarding the Down Payment. Can someone post a link to an article or something that suggests that 25% is the new 20% down?
(btw...20% is the magic number to avoid paying "pmi" which could add $60-$300 per month depending on loan size & credit).
25% down is (pretty much) the down required for non-homestead purchases. (& i don't see a problem with this).
imo 10% should be the minimum down. If everyone (nationwide) had put 10% down (borrowing from a relative or whatever to get it). Then imo there'd be a miniscule number of foreclosures to deal with. (& my kid wouldn't have to be paying 10 years from now for the $$ (hundreds of billions) that the feds gave to the banks to write down their portfolios).
Quote:
Originally Posted by jobert
What else would help? If there was a moritorium on residential construction in Austin, and in the U.S. for that matter. this country doesn't need any more new construction. New housing developments starting at 200K right next to existing 5-year-old neighborhoods with the same houses on sale for 180K is not helping anyone involved in that situation. There are housing starts all over south Austin right now, and the builders are selling the community down the river to squeeze out a slim profit margin. A large portion of the workforce has had to adapt and retool, and it's time the homebuilders did as well. I would like to see DR Horton et al stripped of their building permits, and forced to start applying to rehab houses urban neighborhoods instead.
Jobert.....i'm speechless. We absolutely agree on something.
I have a different take on what needs to be done though.
I'm philosophically against a "moritorium".....but have no problem taxing (or call it a fee since "tax" is a dirty word) the Builders (on a federal, county, school district &/or city level) for the problems that they cause. Imo, a minimum 15K fee (& then another 3K per 100,000 or something) for each new rooftop.
If the crap builders can sell the 200K home for 218K then it's ok by me. (& at least they would be paying as much in taxes as my kid will pay in taxes in 2025 to help out the feds.....since they'll still be paying off the bank charity....er i mean write downs...of several hundred billion dollars, that took place between 2008-2012.) If the realtors can make 12K in skin off this transaction, so should the schools & govt. who'll actually have to service the residents of these crap homes.
lenders will continue to tighten qualifying requirements by adjusting MI and FICO (now 640) but i doubt that FHA with 3.5% down will disappear (may go to 5%) -- doing so will completely freeze out the first time buyer and without them the move up market will disappear as well --
How would that freeze out the first time buyer?
______
Requiring 20% down just makes good business sense for lenders. If a home owner buys a home on 0%, makes payments for a couple years then defaults they really have very little equity in the house. The lender now forecloses and needs to sell the house but now the value of the house has decreased and they can't even sell it for the loan amount.
Sure, big deal. An evil corporation had a loss to take away from their massive profits. However these corps losing doesn't help anyone. If they lose enough maybe your neighbor will lose his job. They won't have a position open that you may have applied for.
imo 10% should be the minimum down. If everyone (nationwide) had put 10% down (borrowing from a relative or whatever to get it). Then imo there'd be a miniscule number of foreclosures to deal with. (& my kid wouldn't have to be paying 10 years from now for the $$ (hundreds of billions) that the feds gave to the banks to write down their portfolios).
Yes, then no. 10% down is way better than 0% however if you got that 10% from a family member that doesn't make you any more suitable to purchase a house. You just have loans out from multiple places.
What else would help? If there was a moritorium on residential construction in Austin, and in the U.S. for that matter. this country doesn't need any more new construction. New housing developments starting at 200K right next to existing 5-year-old neighborhoods with the same houses on sale for 180K is not helping anyone involved in that situation. There are housing starts all over south Austin right now, and the builders are selling the community down the river to squeeze out a slim profit margin. A large portion of the workforce has had to adapt and retool, and it's time the homebuilders did as well. I would like to see DR Horton et al stripped of their building permits, and forced to start applying to rehab houses urban neighborhoods instead.
Hello....this is a free country with free enterprise.
interesting - my parents were just selling a vacation property and had a contract fall through because the bank demanded 25% instead of 20% at the last minute. I thought it was because it was a second home? Maybe the banks are tightening restrictions even more.
We have been looking at buying a second home for a few months, and were told back in November by several national lenders that you could not get a loan on a second home with less than 25% down.
Yes, then no. 10% down is way better than 0% however if you got that 10% from a family member that doesn't make you any more suitable to purchase a house. You just have loans out from multiple places.
I didn't explain myself well.
My point is 10% down period....no more 0% or 3.5% down.
If the borrower (first time homebuyer or fourth time homebuyer) wants to borrow for a home (& the govt. is backing it). Then 10% down.
If the parents want to provide an unsecured (that they can't foreclose on) loan for some or all of the 10% (you guys argue how much of the 10% can be borrowed from parents), then I (as a tax payer or a neighbor) really don't care. If the lenders say that none or some or all of the 10% could be borrowed (or given as a gift ).....then i really don't care. As long as someone that isn't me (or my govt) has some d*mn skin in the game.
IMO, if they....the homebuyer OR the parents of the homebuyer....have skin in the game, then it's less likely the home would go to foreclosure (& me & my kid won't have to bail them or the banks out).
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Jobert.....i'm speechless. We absolutely agree on something. 
).....then i really don't care. As long as someone that isn't me (or my govt) has some d*mn skin in the game.
