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My point would have been no different had I quoted your second sentence, which carries the strong implication that even those who have the 20% downpayment didn't really save for it:
All I'm saying is that may be your anecdotal experience, but it is far from a general truth. I don't personally know anyone who bought WITHOUT saving a 20% downpayment. Seriously.
I also mentioned that people with two incomes often save one income and live on the other. I do not know any single people, especially single people raising a child, who are able to save a 20% down payment while meeting their regular expenses. And in my younger married days, most couples I know who bought houses were given money by parents as part of their down payments. Perhaps where you are it is different.
My 942 s.f. condo cost $180K--one of the least expensive home purchases a person could make and still be within commuting distance of Manhattan. 20% would be $36,000. There's no way I could save that while supporting myself and paying to put a daughter through college. But my last rent for a 2-bedroom apartment was $1400 (it was $2200 for a 3BR house in a town with good schools while raising my daughter, then when she graduated I moved to a place with crappy schools to get a cheap rent while I searched for a condo). My mortgage and taxes/insurance are $1425, plus the condo maintenance fee. It didn't make sense for me to NOT buy.
For 30 years before that, I worked and paid taxes every year so that the rest of you could itemize to get fat refunds and so we could pay crooked politicians and buy weaponry to kill people in obscure countries overseas. I've never collected unemployment or disability or sat home on my ass save for the four months I was on maternity leave 20 years ago. When my government failed to do its job of monitoring national security, I had to run out of a disintegrating, burning skyscraper while the rest of you watched it on TV and said, "looky that". I am not going to feel guilty about taking advantage of a government program that works for me to finally get a little place of my own and a tax deduction of some sort. Sorry.
I'm just saying that people should do a little thinking before painting everyone with a broad brush and making assumptions. Everyone has a different story.
Last edited by Mightyqueen801; 05-03-2012 at 09:06 PM..
I agree that everyones situation is different. However, what I am saying is that due to the fact that the real estate demise was caused in major part by people putting down nothing, borrowing in excess and then walking away from it, we should have learned something. However, in fact we have learned nothing.
Did I see yesterday that Freddie Mac (government run lending) is looking for $19M from the government? Are we expecting that Freddie Mac and Fannie Mae are going to need to be bailed out like the other banks were bailed out because of bad loans?
BTW ; I came to this country with nothing 26 years ago, worked my way up, didnt over borrow, waited until I could afford a house, children etc. So while I admire your ethics etc, we all have our own stories. I am a product of a single mum also>
I believe in the 20% down as a minimum. If all loans required 20% down, housing prices would be much, much less. It also proves you make good financial decisions by paying your bills and dedicating a portion of your income for many years to a down payment on a home. This proves you can commit to a 30 year, 30 year!! mortgage.
If you cant dedicate yourself to cut expenses like iphones, $150 cable bills, restaurants every night, and save up for a downpayment of 20% you shouldn't be dedicating yourself to a 30 year mortgage. You should be renting.
You can only make bad loans to unqualified or high default rate people for so long...... 20% down will be back soon enough and this no money down, low interest rate mortgage will be another page in history.
The Govt just passes feel good laws that makes it sound like they are doing something. They usually make it worse. What happened to the Trillions of stimus $$ ??
If they would leave the market alone it will work itself out. Also, not everyone should own a house.
Again, I agree with you there. Too many people think they "deserve" to own a home, so they make their problems so much worse in the financial long run.
Heck, I still don't own a house. Because I know it would not yet be a wise decision for me.
I believe in the 20% down as a minimum. If all loans required 20% down, housing prices would be much, much less. It also proves you make good financial decisions by paying your bills and dedicating a portion of your income for many years to a down payment on a home. This proves you can commit to a 30 year, 30 year!! mortgage.
If you cant dedicate yourself to cut expenses like iphones, $150 cable bills, restaurants every night, and save up for a downpayment of 20% you shouldn't be dedicating yourself to a 30 year mortgage. You should be renting.
You can only make bad loans to unqualified or high default rate people for so long...... 20% down will be back soon enough and this no money down, low interest rate mortgage will be another page in history.
Well that's too bad. $0 down VA & USDA loans continue to be readily available. 3.5% down FHA loans continue to be readily available. And 5% conventional loans continue to be readily availble. That is to those that have decent to good credit, can prove their income and assets and can meet the stringent guidelines of all these loan products.
Did they have grants available when you bought a home? What kind of grant did these buyers get? The ones I've seen have pretty strict guidelines as far as qualifying and how long you must live there, etc but if I thought I'd meet all that criteria then why wouldn't I look into it? People are kidding themselves if they're really saying they'd turn down 7,000 free dollars.
I agree that everyones situation is different. However, what I am saying is that due to the fact that the real estate demise was caused in major part by people putting down nothing, borrowing in excess and then walking away from it, we should have learned something. However, in fact we have learned nothing.
Did I see yesterday that Freddie Mac (government run lending) is looking for $19M from the government? Are we expecting that Freddie Mac and Fannie Mae are going to need to be bailed out like the other banks were bailed out because of bad loans?
BTW ; I came to this country with nothing 26 years ago, worked my way up, didnt over borrow, waited until I could afford a house, children etc. So while I admire your ethics etc, we all have our own stories. I am a product of a single mum also>
I agree 100% with what you say that I bolded. The key is "borrowing in excess" of what they can afford to pay.
I agree 100% with what you say that I bolded. The key is "borrowing in excess" of what they can afford to pay.
Agreed. We bought a few months ago. Our PITI is $500 less than our old rent and we are also building $500 equity per month. We could only put down 5% as we have really only been saving for two years.
I think it would have been pretty stupid for us not to buy. Just would have been throwing away an extra $1000 month.
The concept of credit can be very dangerous, but when used properly it is a very valuable tool.
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