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Berry- that is amazing to me! Seems w/ all the debt out there . . . lenders would need an infusion of cash and so would start requiring larger downpayments.
Appears they are compensating w/ higher interest rates and additional points . . . I am thinking the rates are going to keep going up . . . and lenders are going to require larger downpayments.
Thanks for the links, QCM!! I just wonder how this is going to translate to actual lending practices . . . I can't believe it is going to continue to be "business as usual."
It's unrealistic to require 20%...heck, even 10% down. Do the math...10% on a typical $200k home is $20,000...20% is $40,000!!! Who has that sitting around and who can save it up?
It's unrealistic to require 20%...heck, even 10% down. Do the math...10% on a typical $200k home is $20,000...20% is $40,000!!! Who has that sitting around and who can save it up?
Tell me about it. That is how our parents and many of us who are older had to finance our first several homes. Programs came into existence along the way for first time home buyers . . . but basically . . . that is how most people got a loan - w/ 20% down - and high interest rates, at that. People waited for many years to get a home, unless they qualified for a special plan or FmHA, for ex.
Appears they are compensating w/ higher interest rates and additional points . . . I am thinking the rates are going to keep going up . . . and lenders are going to require larger downpayments.
Someone forwarded me an article the other day...closely related to this reply...
It talked about bank's shifting weight to other departments within to compensate for the slumping mortgage market to keep their wallets fat. The shift is to fees...specifically adding more, raising existing, and sticking to it when they are assessed.
I just experienced this firsthand with BofA, and it's resulting in us taking our business elsewhere. We're closing all of our accounts (several checking, savings, and credit card) with BofA and switching to SunTrust. I was assessed multiple (I emphasize MULTIPLE) overdraft fees for something I did not cause on my bank account...which a manager at BofA basically summed up as my hard lesson learned and would not remove the fees. This is what led to the article being forawrded to me by a co-worker after they heard me gettign irrate witht he bank on my phone!
Someone forwarded me an article the other day...closely related to this reply...
It talked about bank's shifting weight to other departments within to compensate for the slumping mortgage market to keep their wallets fat. The shift is to fees...specifically adding more, raising existing, and sticking to it when they are assessed.
I just experienced this firsthand with BofA, and it's resulting in us taking our business elsewhere. We're closing all of our accounts (several checking, savings, and credit card) with BofA and switching to SunTrust. I was assessed multiple (I emphasize MULTIPLE) overdraft fees for something I did not cause on my bank account...which a manager at BofA basically summed up as my hard lesson learned and would not remove the fees. This is what led to the article being forawrded to me by a co-worker after they heard me gettign irrate witht he bank on my phone!
Steve, I will try to find the report I read a few weeks ago . . . stating how many BILLION $ banks make annually off FEES ALONE!!! It was mind boggling (now that may have taken into consideration credit card fees, as well). Yes, these banks are making it so expensive to use ATMs, running up late fees on credit cards . . . not giving 30 days grace on credit card interest accrual . . . and my bank has this crazy rule - they charge me if I CALL THEM more than 2 x a month (no matter what reason - even to discuss an ERROR on their part). Pretty nutty stuff.
This is not the article I was referring to, but this mentions BofA and fees from credit cards and other banking transactions. Here is quote from article:
Bank fees have been rising for years. But as their loan losses have surged, banks have become quicker to raise certain fees and rates, analysts say. Lenders collected a record $18.1 billion in penalty fees last year just on credit cards — up 69% from 2003 — from such customer missteps as paying late or exceeding a credit limit, according to R.K. Hammer, a consulting firm. The fees are likely to rise an additional 5.5% this year, Hammer says, because of late fees as people struggle to pay bills.
"I would expect banks to raise fees on a variety of services to offset some of the losses," says Richard Bove, a financial services analyst at Punk Ziegel. "They're going to start to nickel-and-dime you to build non-interest revenue."
... and this discussion is why I don't sleep at night!
DH and I spent yesterday touring open houses. We are aspiring first time home buyers. Right now, we have about 10% saved up for our first house. We hope to stay as far under 300K as possible. We haven't talked to a lender yet but our research combined with our gut feeling is that 300K would be our absolute maximum price.
In the meantime, we are trying to pay down student loans and car loans (DH's car will be paid in 2 months. I still have 3 years left on my loan, but it is paid on time every month). We also have a bit of credit card debt that we incurred while DH was out of work for 11 months, but that will be paid off in a matter of months.
So where does that leave us in the current mortgage market? I feel like we're trying to do all of the right things and be responsible. But a part of me also feels like we're going to get hosed by the mortgage meltdown caused by some previous buyers. I feel stuck!
But I feel a bit better now after venting.
Last edited by ctribucher; 07-14-2008 at 07:35 AM..
Reason: left out a word
ctribucher.... Google Dave Ramsey. He has some great ideas and advice. The Mrs and myself are actually shooting for a Fico score of 0 We are well on our way to getting this done.
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the difference
