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Old 06-11-2018, 03:56 PM
 
828 posts, read 958,592 times
Reputation: 1689

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Quote:
Originally Posted by ddm2k View Post
And a home underwater is only temporary unless you decide to try to sell it. Then you lose your own money, or have to short sell (or can't sell).

I look at it like this, I'm already recording this note on my credit history, along with the timeliness of each monthly payment. I don't need yet another thing at stake (lump sum of cash) if something unforeseeable and catastrophic happens.
Or someone decides 6 months after moving in that they HATE the house/area/whatever. Or their employer moves them 3 counties over...or 3 states over. Or some other major life change.

2 of which happened to me, with the 3rd almost happening. OK, maybe HATE is a bit strong, but regret definitely would apply. Part of it was a lack of due diligence on my end, and I accept that. Most of it was unforeseen circumstances, as in new neighbors moving in after me. One of which brought his dogs that NEVER...STOPPED...BARKING..., which ironically was one of the biggest reasons I moved from the city to a rural area Then the horse folks came in, bringing in a large number of bulls, and I'm sure you can imagine what it's like living near a cattle farm in the hot weather. Then the crime picked up in the area...

A few months later, my employer was floating the idea of moving my job 3 hours north. Not exactly the kind of commute that I'd want. They would cover moving costs no problem, but they certainly wouldn't be covering a 15% loss in home value when I went to sell, lol.


Then I met someone, who made me realize that much of who I thought I was really didn't hold true, and suddenly the other reasons I moved rural no longer applied, and I found myself missing the city. Thankfully, in the 3 years I've lived in this place, the value has appreciated nearly 50%. But had I gone underwater immediately on the other place, and values only appreciated at normal levels, I'd be up the creek, so to speak, if I found myself in a position where I needed to move right now.
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Old 06-11-2018, 04:02 PM
 
1,778 posts, read 877,752 times
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Quote:
Originally Posted by ddm2k View Post
This is true. Rural areas do not have generous income limitations. Fringes of urban sprawl areas (Exurbs) that still have some pockets of decently priced housing (Atlanta Metro) caps out guaranteed loans at about $90k a year.
That is still not generous in my area, believe it or not.
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Old 06-11-2018, 04:16 PM
 
828 posts, read 958,592 times
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Quote:
Originally Posted by emotiioo View Post
USDA loans have income restrictions. Not sure those bragging about not putting anything down "even if they wanted to" would have a lot to put down in any case. At least not in my area. The income restrictions are not generous.
The USDA Direct loans are geared towards low income people, and have fairly low income levels, yes. The USDA Guaranteed loans are a completely different animal.

There are income restrictions on both, along with maximum loan amounts, both are which are based on the area in which you're purchasing, which takes into account cost of living in those areas with income limits accounting for family size. Some area's loans max out at nearly half a million dollars. In my area, on a Guaranteed loan, a single person buying a home is subject to an income limit roughly 40% above the median income level, and it goes up from there, maxing out at over 100K/year for a family of 8 or more.

That said, not all of us WANT to buy at the highest level of what we're approved for, contrary to popular belief, and what I suspect emotiioo believes as well. The house I bought the last time around was slightly more than half of what my bank approved me for. A few places I looked at were at a price low enough that I had difficulty finding a place to even underwrite the loan because the loan value was so low, and a zero down loan with rolling closing costs into the loan was the only way to secure a traditional mortgage on the property.
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Old 06-11-2018, 04:23 PM
 
1,778 posts, read 877,752 times
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Quote:
Originally Posted by urbex View Post
The USDA Direct loans are geared towards low income people, and have fairly low income levels, yes. The USDA Guaranteed loans are a completely different animal.

There are income restrictions on both, along with maximum loan amounts, both are which are based on the area in which you're purchasing, which takes into account cost of living in those areas with income limits accounting for family size. Some area's loans max out at nearly half a million dollars. In my area, on a Guaranteed loan, a single person buying a home is subject to an income limit roughly 40% above the median income level, and it goes up from there, maxing out at over 100K/year for a family of 8 or more.

That said, not all of us WANT to buy at the highest level of what we're approved for, contrary to popular belief, and what I suspect emotiioo believes as well. The house I bought the last time around was slightly more than half of what my bank approved me for. A few places I looked at were at a price low enough that I had difficulty finding a place to even underwrite the loan because the loan value was so low, and a zero down loan with rolling closing costs into the loan was the only way to secure a traditional mortgage on the property.
No I don't believe that everyone buys at the top of their approval range. The fact that people are NOT doing that and STILL use a loan product that requires nothing from them in the way of a down payment really makes my head spin. Yeah yeah I know all the reasons that everyone has stated. No need to trot them out again. Just not the way I have ever conducted my own business and not a way of doing business that I support. As another poster said, not part of my moral code.
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Old 06-11-2018, 05:01 PM
 
1,488 posts, read 334,628 times
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Quote:
Originally Posted by emotiioo View Post
That is still not generous in my area, believe it or not.
West Coast is not a friendly place right now. Lol.
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Old 06-11-2018, 05:41 PM
 
828 posts, read 958,592 times
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Quote:
Originally Posted by emotiioo View Post
Just not the way I have ever conducted my own business and not a way of doing business that I support. As another poster said, not part of my moral code.
So you'll willingly spend far more money than you have to, just to support some kind of self imposed moral code. Hey...whatever lets you sleep at night!
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Old 06-11-2018, 08:23 PM
 
Location: MID ATLANTIC
7,603 posts, read 17,643,477 times
Reputation: 8094
Quote:
Originally Posted by MikeJaquish View Post
Medical doctors are regularly offered 100% JUMBO loans.
They are a good bet to close.
Not only are they offered 100% jumbo loans, they are offered 100% no MI loans up to 1.5M. Average income after residency is 300K. Specialty? Add another 200K
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Old 06-12-2018, 02:04 AM
 
Location: Cary, NC
31,646 posts, read 55,374,605 times
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Quote:
Originally Posted by SmartMoney View Post
Not only are they offered 100% jumbo loans, they are offered 100% no MI loans up to 1.5M. Average income after residency is 300K. Specialty? Add another 200K
But, they are not creditworthy.
Can't afford the house.
Are immoral.

I wouldn't turn my spleen over to any of the bums...
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Old 06-12-2018, 06:06 AM
 
Location: MID ATLANTIC
7,603 posts, read 17,643,477 times
Reputation: 8094
Quote:
Originally Posted by MikeJaquish View Post
But, they are not creditworthy.
Can't afford the house.
Are immoral.

I wouldn't turn my spleen over to any of the bums...
Maybe so, I wouldn't know. We jumped on board with the doctor loans about 3 years ago, but only at 90%. The trademark of these loans is "no PMI." But don't let that fool anyone, the rate is higher and the lender is self-insuring. But I am losing out to those that offer up to 1.5M with 0 down. Don't get me wrong, the pedestal we have built for this profession doesn't make sense. But since my organization attracts international buyers, we see this subgroup of the profession lacks student loan debt, which is only available to US Citizens (and green card holders). This group (based on my observations) is primarily from India and these students are paying cash 30K - 50K per year. Pre-med must be taken in US, so you are looking at 200K to 300K, easily. Cash. So, they've had family put them through school, but while in school, they have bought into the American dream. I guess family put their kids through school, but after that, they are on their own. (Some of these families have 2 or more kids they are putting through med school).
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Old 06-14-2018, 01:33 PM
 
8,389 posts, read 7,382,268 times
Reputation: 18267
It seems that a lot of people on this thread do not understand why a lot of people will take a no money down, instead of having to come up with 20 % down. Lets look at some of the reasons.

They can buy their home with a payment they can afford with no money down. They have $200,000 in the bank and could have an 80% loan with no problem, and can afford to make the payments without strain. Instead they choose a no money down loan, with low interest rate.

Reason to go this path: Their money can bring them in a better return on their money than the
interest rate they are paying. They come out money ahead, this way. A good investment.

The GIs were returning from war. To help them move back to the real world at home, they offered them no money down, low interest loans so they could afford to buy homes instead of renting. There would not have been enough rentals, which would have driven the rent so high they could not have afforded to rent, if they could not buy. The VA loans proved to be the safest loans that have ever been made, with very low repossession rates (far lower than conventional loans).

If they sold and the loan was paid off at closing, they could buy another home with no money down V.A. loan. I know this as a fact, as I used my V.A. loan rights 4 times when we were younger as we moved up in housing all in the Silicon Valley. Total price of those 4 homes combined, were less than $70,000 and today those 4 homes in the crazy Silicon Valley real estate market, would sell for over $5,000,000 total, as all were in higher real estate value areas such as Cupertino and Saratoga.

No money down loans, have proven to be safer loans with less foreclosure rates than conventional loans. They are designed, to help Veterans get homes as they return to civilian life. To attract Medical Doctors to areas that are having a hard time filling their needs. They are available to help strengthen rural towns where people are moving away. The purposes of No Money Down Loans are noble, and do a lot of good for people and the area they live.
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