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In this scenario the house was already purchased. If they want to save more for downpayment, that's fine, but it should be to lower the monthly payment and not in deference to some nonsense about 'promises'. Debt is not a 'promise' with your bestie, it's a financial transaction with set rules and that crap don't play.
Why not? OP has not purchased the house yet, so saving more for a down payment in order to avoid defaulting is an option.
I don't see the correlation between how 20% or 3% or 0% downpayment avoids someone to default.
Well if option A is 0% down payment, default and 7 years of bad credit vs option B 20% down, default and 7 years of bad credit option B is going to be harder for me personally than A. Doesn't mean both don't default but option B people have more incentive to figure something out than option A
Well if option A is 0% down payment, default and 7 years of bad credit vs option B 20% down, default and 7 years of bad credit option B is going to be harder for me personally than A. Doesn't mean both don't default but option B people have more incentive to figure something out than option A
That's not the point he is making. He is trying to convince us that if anyone puts down more they are less likely to default. Which is not true.
The only way to prevent default is paying 100% cash
Sorry that's not sufficient to back up your claim. Common sense would dictate that people with more money invested would have more to lose in a default scenario
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If downpayment was the factor that drove default rate banks would use that instead of credit score
Down payment certainly is a factor otherwise it wouldn't impact interest rates on your loan or the requirement to have mortgage insurance. That's the common sense angle
I don't live in CA but isn't the OP's question the classic home buyer conundrum. Live close to work where real estate is expensive or move out and get a bigger, less expensive home but drive a lot. There is no good answer to this regardless of the state. I have experienced both. I would live in a basement to be close to work. My wife had a different idea and we paid dearly for it.
Sorry that's not sufficient to back up your claim. Common sense would dictate that people with more money invested would have more to lose in a default scenario
Down payment certainly is a factor otherwise it wouldn't impact interest rates on your loan or the requirement to have mortgage insurance. That's the common sense angle
Sorry common sense is not sufficient enough for you.
Downpayment is the driving factor into default. Please support that statement. Show me the study that has like for like credit scores but the variance is downpayment and the amount of defaults. You can't because no study exsist. Lenders care more about credit score than downpayment as a measure of likelihood to default.
You state an obvious statement "more money invested more to lose". However that in itself doesn't mean people who put 20%+ down don't default. They are mutually exclusive.
Downpayment affects your rate no different than how long you want to lock the rate for. Neither of which impacts a persons likelihood to default.
Actually don't bother. You won't admit when your wrong and I won't buy your bs.
Sorry common sense is not sufficient enough for you.
Downpayment is the driving factor into default. Please support that statement. Show me the study that has like for like credit scores but the variance is downpayment and the amount of defaults. You can't because no study exsist. Lenders care more about credit score than downpayment as a measure of likelihood to default.
You state common sense is the rationale
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You state an obvious statement "more money invested more to lose".
Then you call it stating the obvious, well which is it?
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However that in itself doesn't mean people who put 20%+ down don't default.
I never made that claim. What I did say is defaulting with 0% down is easier than 20% down
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They are mutually exclusive.
Downpayment affects your rate no different than how long you want to lock the rate for.
Well that's not true because there certainly are different rates on the same credit profile for the same length mortgages with varying downlayments.
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Neither of which impacts a persons likelihood to default.
Duration has varying degrees of risk associated with them and so do varying down payments
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Actually don't bother. You won't admit when your wrong and I won't buy your bs.
This is a typical whining response with nothing actually said
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When the mortgage industry starts complaining about the 14 million people who would be denied the chance to buy a qualified mortgage if they don’t have a 5% downpayment, it’s worth remembering that qualified mortgages for people who don’t have a 5% downpayment have a delinquency rate of 16% over the course of the whole housing cycle. (You can be sure the numbers were much higher still in 2006 and 2007, which is why Guarino didn’t give them to me.)
And you can see too why the 20% downpayment limit was put in place: it’s the point at which delinquencies fall to less than 5%. If you take one group of loans with a 20-25% downpayment, and a second group of loans with a 15-20% downpayment, then the second group, on these numbers will have a delinquency rate 56% higher than the first.
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