Posted on 06/30/2011 7:25:03 AM PDT by Notary Sojac
I especially love Senator Hagan...
“That’s almost equal to the median annual income in my state,” she said. “Many families in North Carolina and across the country cannot afford such an onerous down payment."
Well then, the PRICES NEED TO COME DOWN OR THE INCOMES NEED TO COME UP, YOU BRAIN DEAD D-BAG.
A bipartisan group of U.S. senators and representatives wants to repeat bad history. What is wrong with people taking out loans with a little more of their own skin in the game? For that matter, what’s wrong with letting the lending institutions decide for themselves who does or does not qualify for a home loan?
1. Get rid of Fannie May.
2. Make a multi-tiered system for credit/down prequalification.
720+ credit = 5% down, low rate
650-720 = 7% down, low-mid rate
600-650 = 10% down, mid rate
-600 = 20%down, mid rate
Compel people into higher credit scores. FDA loans, however, are very easy to get and will probably make this useless anyway.
Let the banks/lenders decide the terms of the loans...
does that make too much sense?
I know it takes power out of the hands of the central planners, so that’s why they oppose it,
but, it would let the market work, and those lenders who were either too tight or loose with their standards would suffer the market consequences of those policies.
“Bad laws are the worst sort of tyranny.” Edmund Burke
Enabling immature, lazy and greedy people does not work. It is basically how we got into THIS jackpot!
What ever happened to waiting until you can afford something before you buy it? What ever happened to living withing you means?
But a return to market prices will bankrupt a lot of politically inconvenient institutions and individuals, therefore this sort of stealth bailout will continue to dominate the headlines.
Yes, exactly. Home prices are still over-inflated, since the Government did not allow a natural price correction to take place. 20% down should be affordable for the average couple with a few year’s savings, but it’s not if a home worth 200k is selling for 600k.
To reduce a downpayment (under those terms) just $1 you have to reduce the price $5, right? (For a $100,000 home, the downpayment requirement would be $20,000. To reduce that downpayment to a mere $19,999, you would need to reprice the property to $99,995.
One does presume VA loan guarantees will continue to be free of a mandatory downpayment ~ or not?
“They argued that such a plan goes against the intent of Congress, would keep homeownership out of reach of most first-time home buyers and many middle-class households, and would deal a devastating body blow to the already fragile housing market. “
So we’re back to home ownership being some sort of right that congress needs to help bring about in any way they can? Tell you one thing. They all believe they have to reduce FNM/FRE exposure so by saying less than 20% down they are implying they want banks to take more risk.
Not sure where you get the idea there hasn’t been a “natural price correction”? Even in the best market in the country (Washington DC metro area), everybody took a 35% to 50% bath ~ and there are only a few places where prices have climbed “back up” (and that has to do with unusual conditions ~ near or around Fort Belvoir or subway stations.)
It’s not the government’s place to be specifying a mandatory down payment percentage in the first place. Let the banks set their policies according to the amount of risk they’re willing to accept. And then if they accept too much, don’t use any of our money to bail them out.
}:-)4
Hubby and I are going to try to build our dream home and to finance as little as possible. How?
- We’re going to scrape and save
- We’re going to pay cash for land in a depressed market
- We’re going to finance the actual house build, but we’ll put a *minimum* of 20% down for a 15 year note. The house will be bare-bones with nothing fancy.
- We’re going to pay cash to put in all the extras - one room at a time - over the first two years after the structure is built. (This includes electronics and furniture)
It’ll take us four or five more years to save enough to get started, one year to build the house and two to finish it. When it’s all said and done, in eight years we’ll have a show-case retirement house and a very tiny mortgage.
In the mean-time, we’ve got an investment property. I’m hoping that, after things turn around, we’ll have enough equity to pay off the new house’s mortgage just a couple of years after getting it.
I don’t want to be paying on a mortgage when we’re in retirement. That’s insane.
If my CURRENT disposable income cannot pay for the property within ten years including interest and taxes and I cannot afford to pay down at least 25%, I shouldn't buy the property.
Congress critters call such unworkable. I call such mandatory. My properties are paid for in full (all of them) I have never even come close to defaulting on a property loan.
Maybe Congress should rethink their idiot proposals!
/sarc
The industry should regulate itself and 20% down should be about the minimum. Otherwise History is Doomed to Repeat Itself!
Your credit rating agencies began spitting up puke left and right as a consequence ~ I haven't read anything that says they are back in business with truly reliable information. Most folks would be well advised to check their ratings and start chipping away at the screwy stuff that's been entered on their records.
A 20% down payment requirement is certainly reasonable but not if the government makes the requirement. The government is incompetent and/or destructive when it interferes in the market.
Oh, I’m not disputing that 20% down is prudent nowadays (and I’m saying this as a lifelong renter with bad credit that, given current tight credit, will probably never own a home). I’m just saying that it’s not Washington’s place to force banks to require it. If a bank wants to step out on the ledge and get back into the “subprime” loan business or loosen down payment requirements, that’s their business as long as the taxpayer isn’t on the hook if they screw it up.
}:-)4
By law? Negative...the banks can create their own rules.
Not everyone is cut out to own property - even when you give it to them basically for free.
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