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Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,572,211 times
Reputation: 16698
Maybe Golfing Cat is very young and has idealistic visions of the world and simply doesn't know what actually happened.
It wouldn't be the first time someone has posted on this forum who didn't know what they were talking about although if they saw the responses maybe they will have learned the reason why.
Maybe Golfing Cat is very young and has idealistic visions of the world and simply doesn't know what actually happened.
It wouldn't be the first time someone has posted on this forum who didn't know what they were talking about although if they saw the responses maybe they will have learned the reason why.
I'm hoping it was sarcasm, but just in case:
Quote:
Originally Posted by GolfingCat
What's wrong with giving low income folks a shot at home ownership?
Low-income folks are typically a terrible credit risk for multiple reasons:
1) Little or no savings. When you own a home, Murphy likes to show up frequently. If you don't have a savings account, there is a great likelihood that you will have to make a choice between fixing the house or making the mortgage payment.
2) Poor job stability. Not every person earning a low income is a job-hopper (either by choice or by circumstance), but a large segment are. What happens when you lose or leave your job and are unable to make the house payment?
There are more reasons, but those two are enough to make most lenders and landlords shy away from lending to the low-income crowd.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,572,211 times
Reputation: 16698
Quote:
Originally Posted by JimRom
I'm hoping it was sarcasm, but just in case:
Low-income folks are typically a terrible credit risk for multiple reasons:
1) Little or no savings. When you own a home, Murphy likes to show up frequently. If you don't have a savings account, there is a great likelihood that you will have to make a choice between fixing the house or making the mortgage payment.
2) Poor job stability. Not every person earning a low income is a job-hopper (either by choice or by circumstance), but a large segment are. What happens when you lose or leave your job and are unable to make the house payment?
There are more reasons, but those two are enough to make most lenders and landlords shy away from lending to the low-income crowd.
It was not sarcasm.
Some people are just idealistic and pop off with what sounds like a nice idea not understanding the ramifications.
If you are on CD for any time you will notice many people make statements that are uninformed or wrong.
Several posters called the poster out and I explained early on why low income people are not a good idea.
What's wrong with giving low income folks a shot at home ownership?
Nothing as long as they have the finances to keep the house up and not let it fall into disrepair. I have several homes where I live in a nice area where you can tell the owners have either fallen on hard times or just don't care.
The biggest local credit union in my area is now doing 105% LTV mortgages to assist people with closing costs. Property taxes are between roughly 0.5%-0.7% of the market value of the home annually outside the city limits. Housing prices are generally low, so most start home property taxes are under $1,000 annually. There's no state income tax, so your dollar stretches a bit farther here. Bankrate has this credit union at five stars for solvency. As far as I know, I don't think they sell their mortgages onto the secondary market.
Rent is not cheap. A 1BR in a nice complex will set you back about $700/month. A 2BR will run $800-$900, with houses in good condition more than that.
It's much cheaper to own a starter house than rent, and unless you're just at the bottom of the barrel financially, most people can swing a $100,000 house here.
The biggest local credit union in my area is now doing 105% LTV mortgages to assist people with closing costs. As far as I know, I don't think they sell their mortgages onto the secondary market.
.
I can't imagine there is a secondary market for 105% LTV mortgages but, hey, there's a market for bad debt of all sorts so who knows. It could be a lucrative although sleazy business.
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