Home buying rules.

[StartingOver08]

Please rent if you are capable of buying a house, irregardless what the real estate agent or bank says.

This statement does not make any sense. If you are capable and you are able to purchase a home, and you desire to purchase a home, what is the purpose of renting instead?

[sigferl]

Thank you so8. It was a typo, it should have read:

'If you are NOT capable...'.

For example, my mother is not capable of buying a computer because she know nothing about technology so she will not buy a computer unless she has trusted expert advice. Otherwise, she will not buy.

Do unto others as you would have them do unto you.

This statement does not make any sense. If you are capable and you are able to purchase a home, and you desire to purchase a home, what is the purpose of renting instead?

[BkinTX]

sigferl, have you ever served in the military?

[hereforinfo]

You misunderstood my reply. You are saying everyone should have put down 20%, and I said that most people would still be under water if they put down 20% since home values have decreased in many places by 40-50% from the peak. But your soap box rantings don't apply to me, as I'm not walking away from my home.

And FYI: Irregardless is not a word.

[BkinTX]

LOL, it is if you're illiterate.

[junker]

putting 20 or more percent down..ONLY....helps the big bank...they love it when you put a large amount down....that way if something does happen...anything...loss of value forced to sell..forclosure...it helps THEM..not you...your 20% is gone...history....why you wouldnt want low,low down if it could be had..makes absolutely NO sense...any SMART investor would tell you to use the banks money on houses...not your own...i just bought a foreclosed house with 10% down..and the investor that owned it...by the way... lost 9 houses to foreclosure...probably put 20% down on each one..and i got it for less than 1/2 of what he was asking btefore he bit the bullit...unfortunatly most all banks want at least 20%.....

thinking that young families should pay rent and thow their money awayrenting...while waiting to come up with 20% for a VA or FHA loan ,when their mortgage payment might actually be lower than rent...is really riduculous..and sounds like big business talking....i think you are living in your own little bubble and dont have a grip on the real world....probably tooo much mj.....

[hereforinfo]

and the investor that owned it...by the way... lost 9 houses to foreclosure...probably put 20% down on each one..

I doubt it. Not with all the creative financing and piggy back loans from the past several years. I'm willing to bet that whatever he put down on each house came from an equity line on the one before it, not out of his own pocket. That is leveraging the bank's money. That's what allowed so many people to invest in more properties than they could legitimately afford.

We have always put 20% down when buying a home, in order to avoid paying PMI or a higher interest rate on a piggy-back loan and to get the mortgage below the "jumbo" limit with a higher rate. It didn't make sense to pay a higher interest rate on a large sum of money in order to keep some of it in the bank gaining less interest. If we'd invested that cash elsewhere, it would have been lost when the stock market crashed anyway. So we'd still be out that money and our mortgage payment would be higher too.

There is never a one size fits all scenario. What makes sense to you may not make sense in my situation, so it's not fair to say that one can't benefit from putting more money down, just as it's not fair to say that homeownership doesn't work for anyone who doesn't put down 20%. Both are blanket statements that really don't apply in all situations.

[junker]

i live in a area in northern calif..a little ex timber mill town...about 950 houses...a few BIG TIME investors put some money down on a mountain top a mile from town and promised to make it into a major resort....the DAY the news broke in the big city EVERY house that was available was bought instantly...by the original investors...then the small time investors came and ran the prices up instantly..house values more than doubled in as little as a year. i sold my original house to a INVESTOR that had already bought some houses..he paid 20% down on my house...then of course...original BIG investors of the mountain went bankrupt...small time investors went belly up one right after the other...the person that is still trying to hang on to my house is so far upside down now... worth 1/2 of what he paid..will NEVER recover..renting it now for less than his note...soon will go the way of the investors house i just bought...google Dyer mountain..and you will see...point is 20% down didnt save many,many investors here....again save your money..let the mortgage co.s lose theirs....

[OhioFiler]

Thanks for your post junker. I respectfully disagree completely. >20% cash downpayment is very good advice because:

1. We are talking about your home, not an investement, so everyone should take very prudent steps to ensure that your home is not lost for any financial reason.

2. 20% cash downpayment helps to ensure that you do not lose your home if your home temporarily decreases in value.

3. I want all veterans to get a VA loan by putting >20% cash downpayment just like everyone else. Just because VA/FHA/bank allows you to put less then 20%, do not do it. A salesmans job is to get you to buy something you do not need or is bigger then you need. Say NO to salesman.

Sorry, Libertarians are for freedom and personal responsibility, if you break your mortgage contract, get out of the house today. Most BK supporters want government to bail them out of hard times(excluding severe permanent medical disability).

God Bless America.

Wrong again sifried. When I bought my home I put less than 5% down. If I have to walk away because of being upside down I've lost a lot less than the person who put 20% down and ended upside down.

I happen to be a salesperson and find your generalized description of salespeople offensive.

God Bless the ignorant.

[hereforinfo]

i live in a area in northern calif..a little ex timber mill town...about 950 houses...a few BIG TIME investors put some money down on a mountain top a mile from town and promised to make it into a major resort....the DAY the news broke in the big city EVERY house that was available was bought instantly...by the original investors...then the small time investors came and ran the prices up instantly..house values more than doubled in as little as a year. i sold my original house to a INVESTOR that had already bought some houses..he paid 20% down on my house...then of course...original BIG investors of the mountain went bankrupt...small time investors went belly up one right after the other...the person that is still trying to hang on to my house is so far upside down now... worth 1/2 of what he paid..will NEVER recover..renting it now for less than his note...soon will go the way of the investors house i just bought...google Dyer mountain..and you will see...point is 20% down didnt save many,many investors here....again save your money..let the mortgage co.s lose theirs....

If you've read all my replies, you'll see that I agree with you that 20% down won't necessarily save your home. My point was that putting large sums of money down is not always a bad idea. Obviously in the situation you're talking about it was. But there are just as many stories (like my own) where it was the prudent thing to do. I'm not losing my home. 1/3 of americans are upside down, and the majority are not losing their homes.

We're glad we put all that money down because we don't feel so trapped, we're not so far upside down that we can't get out if we need to. Not everyone can just foreclose, file bankruptcy, or do a short sale. I live in a recourse state and we have assets, so foreclosure would not be an option for us. Plenty of my neighbors put zero to very little down and feel compelled to walk away because they are upside down by a few hundred grand and have a mortgage payment that is way higher than what they could rent a similar home for. Fortunately we're not in that situation.

[sigferl]

Thanks for your post OF. It is always a pleasure to read your posts because you have very unique views that I rarely hear. Do you think there are 'predator borrowers'?

Again, a home is NOT AN INVESTMENT. Therefore, everyone needs to take prudent steps to be 99.99% sure that they will not lose the house in any way so large downpayments are a prudent action to help avoid losing the house.

If you buy houses for investment(rentals) then take your investments losses like a man like the rest of the people with investment losses(stock market, gold, oil, futures...), invest only what you can lose and accept your loses. NO bailouts for any lost investments.

I do not meat in insult salespeople but I think real estate agents and used car salespeople earned their unsatisfactory reputation. Of course, it only takes a few bad sales people to ruin the reputation of all sales people so each person has to be judged separately.

What is the difference between a good salesperson and predatory lending?

Do unto others as you would have them so unto you.

Wrong again sifried. When I bought my home I put less than 5% down. If I have to walk away because of being upside down I've lost a lot less than the person who put 20% down and ended upside down.

I happen to be a salesperson and find your generalized description of salespeople offensive.

God Bless the ignorant.

[sigferl]

Thanks for your post junker. That is completely false. >20% downpayment helps the owner by preventing forclosure and reducing monthly payments.

Again, a home is NOT AN INVESTMENT. If you buy houses as an investment then accept your losses like all other investors and to do push your losses on innocent people by 'walking away', forclosure, or BK.

Banks want >20% so that everyone wins(banks get interest and homeowners get a home) and all parties honor their part of the contract.

Freedom is not free.

putting 20 or more percent down..ONLY....helps the big bank...they love it when you put a large amount down....that way if something does happen...anything...loss of value forced to sell..forclosure...it helps THEM..not you...your 20% is gone...history....why you wouldnt want low,low down if it could be had..makes absolutely NO sense...any SMART investor would tell you to use the banks money on houses...not your own...i just bought a foreclosed house with 10% down..and the investor that owned it...by the way... lost 9 houses to foreclosure...probably put 20% down on each one..and i got it for less than 1/2 of what he was asking btefore he bit the bullit...unfortunatly most all banks want at least 20%.....

thinking that young families should pay rent and thow their money awayrenting...while waiting to come up with 20% for a VA or FHA loan ,when their mortgage payment might actually be lower than rent...is really riduculous..and sounds like big business talking....i think you are living in your own little bubble and dont have a grip on the real world....probably tooo much mj.....

[OhioFiler]

Thanks for your post OF. It is always a pleasure to read your posts because you have very unique views that I rarely hear. Do you think there are 'predator borrowers'?

Again, a home is NOT AN INVESTMENT. Therefore, everyone needs to take prudent steps to be 99.99% sure that they will not lose the house in any way so large downpayments are a prudent action to help avoid losing the house.

If you buy houses for investment(rentals) then take your investments losses like a man like the rest of the people with investment losses(stock market, gold, oil, futures...), invest only what you can lose and accept your loses. NO bailouts for any lost investments.

I do not meat in insult salespeople but I think real estate agents and used car salespeople earned their unsatisfactory reputation. Of course, it only takes a few bad sales people to ruin the reputation of all sales people so each person has to be judged separately.

What is the difference between a good salesperson and predatory lending?

Do unto others as you would have them so unto you.

Sigmund...here is the definition of an investment.


A home is an investment.

[sigferl]

Thanks for your post OF. I disagree completely and I think most people agree with me. Why is a forclosure treated differently then any other investment losses?

Why are stock investments not getting bailouts like Obama loan nodification bailout?

For those of you that treat your home as an investment then be prepared to take your losses and voluntarily move out when you can not make the payments and repay the bank all the money.

When the going gets tough then the tough get going.

Sigmund...here is the definition of an investment.


A home is an investment.

[OhioFiler]

Thanks for your post OF. I disagree completely and I think most people agree with me. Why is a forclosure treated differently then any other investment losses?

Why are stock investments not getting bailouts like Obama loan nodification bailout?

For those of you that treat your home as an investment then be prepared to take your losses and voluntarily move out when you can not make the payments and repay the bank all the money.

When the going gets tough then the tough get going.

Nice try sigffried. That's one of the weakest strategies one can make to bolster a lost argument. Claim most others agree with you.



What makes you think foreclosures are handled any differently than any other investment? If you fail to perform, you lose your investment.

Nobody would EVER buy a house with the assumption it will DECREASE in value while they own it. NO one! Every person who INVESTS in a house assumes the value will increase.

I'm done arguing this point with you.

When the going gets tough the simple-minded go nowhere.