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These used to and in some cases have already existed in California through FHA in some way shape or form for awhile now. The no-PMI is interesting though.
All this says to me is that we're getting back into bubble territory.
I'm conflicted because I want a house, but I also don't want to be put in a precarious position and would rather just save for the 20% and wait for the bubble to burst again.
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However these loan limits are crazy because 1. $417k doesn't buy all that much where I live and 2. I never understood the income limits.
3% of 417k is 12.5k + closing (which is typically another 3%) so that's 25k needed in savings. One would be absolutely stupid to not have a reserve of at least 5k. I don't know very many people who are at or around the median income levels in CA and have 30k in savings.
But I'm sure people will do it, qualify and buy their first home on a shoestring...however like I mentioned earlier, this is getting too reminiscent of 2006 era homes and home prices here in CA.
The mere hint that interest rates were going up (not now obviously) but a few months ago, made investors very worried and inventory sat and prices took a dip.
Once interest rates do go up metro areas will take a hit.
$417k here in Indiana will buy you a very nice home. For people like myself who have reasonably high income, but haven't had a lot of time to save and want to own, these programs are helpful.
So let's say there are two people, A and B. A makes more money than B and buys a house. B's rent consumes so much income he can't save a 20% down payment so he continues renting (home prices and rents rise faster than he can save). Fast forward 30 years, A has paid off his mortgage, B is still renting. B has paid more than A and has nothing to show for it.
What do you say to B? "You paid more than A but you didn't have any skin in the game"?
"You should have invested your savings in the stock market".
If they have more than median incomes, they have no excuse for not having an adequate down payment.
When you limit it to people with low incomes, you're basically saying that you're going to reward frugality.
I am low income and both of my houses have more than 20% equity. You could better your situation easily by just getting a full time job. Do your side business on the side for extra income.
So let's say there are two people, A and B. A makes more money than B and buys a house. B's rent consumes so much income he can't save a 20% down payment so he continues renting (home prices and rents rise faster than he can save). Fast forward 30 years, A has paid off his mortgage, B is still renting. B has paid more than A and has nothing to show for it.
What do you say to B? "You paid more than A but you didn't have any skin in the game"?
No, I would tell B that they should have worked at improving their income so that they, too, could have afforded a home.
??? ??? All I want is for people who work for low wages to be able to buy tiny starter homes, as opposed to paying more to rent than homeowners pay to own and ending up with nothing to show for having paid more than homeowners.
Have you ever browsed realtor.com? There are plenty of low cost starter homes around the country with plenty of minimum wage retail jobs nearby.
I live in an area where there used to be several textile mills, so there are tons of cute little mill homes. Some need some fixing up, many are fine, just small.
The latest value of the Case-Shiller Index is 210. Once square footage is adjusted for, this is only slightly above historical norms. In real terms, it has not even doubled since 1880 once adjusted for square footage.
The stock market, by contrast, has gone up manifold.
Note that I am not including the rental "return" on the housing because I was responding to a post that implicitly assumed that rent was being paid from job income rather than from investments.
I am low income and both of my houses have more than 20% equity. You could better your situation easily by just getting a full time job. Do your side business on the side for extra income.
Can't do FT M-F 9-5 with medical appointments in the way. Can't do FT swing shifts due to transit limitations (buses stop running before shift ends). Can't do FT graveyard because of early morning appointments.
Why can't I have work that I can do on my own schedule? Shouldn't be rocket science.
02-26-2016, 09:28 PM
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n/a posts
Quote:
Originally Posted by freemkt
Can't do FT M-F 9-5 with medical appointments in the way. Can't do FT swing shifts due to transit limitations (buses stop running before shift ends). Can't do FT graveyard because of early morning appointments.
Why can't I have work that I can do on my own schedule? Shouldn't be rocket science.
Excuse. Excuse. Excuse.
Newsflash, millions of people have appointments they have to weave into their work schedule.
Everyone wants work they can do on their own schedule. Few have that luxury while still making enough to have a decent living.
Newsflash, millions of people have appointments they have to weave into their work schedule.
Everyone wants work they can do on their own schedule. Few have that luxury while still making enough to have a decent living.
I think this depends on how much notice people have of their work schedule. If your employer calls only hours in advance to offer you an extra shift, and those extra shifts are necessary for the side income, there is a problem there. No doctors will let you repeatedly schedule on such short notice.
OTOH, if the employer tells you 2 weeks in advance, that should be plenty of time to work in the appointments.
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