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Post by bluemingidiot on May 26, 2016 14:04:28 GMT
Wells Fargo's new product has a minimum down payment of 3 percent for a fixed-rate conventional mortgage of up to $417,000. Down payment help can come from gifts and community-assistance programs. Customers are not required to complete a homebuyer education course, but if they do, they may earn a 1/8 percent interest rate reduction. www.cnbc.com/2016/05/26/wells-fargo-launches-3-down-payment-mortgage.html |
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Post by Mr DAVID In Wisconsin on May 26, 2016 16:55:44 GMT
Trying to start the cycle of repossessions all over again it seems.
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Post by bluemingidiot on May 26, 2016 18:04:31 GMT
Yes. But not everyone who is now able to acquire a home will lose it. The five most important things you can bequeath to those you leave behind are God's love, your love, a good name, a good work ethic, and a home. They are not making any more land but people making is strongly encouraged.
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Post by wolfmom on May 27, 2016 12:15:05 GMT
This is bait and switch at it's finest.
3% down is $12,520 with a monthly payment of $2,630 at $3.5% interest. And following FHA guidelines on a $417,000 house. If you think you're going to buy a house with 650 credit score and need to borrow money for the down payment on this loan I have a bridge to sell you.
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Post by bluemingidiot on May 27, 2016 13:09:17 GMT
Of all the scenarios you could have picked out, why did you pick that particular one?
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Post by Deleted on May 27, 2016 14:51:23 GMT
If you have the income to afford a $400k house, but you don't even have $12k in savings, you are mismanaging a very good income! Whoever takes this deal better hope those paychecks never stop rolling in, they are living on the edge and at very high stakes with those kind of numbers. These must be the same people with those $800 or $1000 car payments I have heard of.
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Post by Mr DAVID In Wisconsin on May 27, 2016 15:01:07 GMT
When people had to save 10 or 20% as a downpayment, forclosures were very rare. When we started coming up with no and low downpayments, negative amortization loans and many types of creative financing the night bet of foreclosures skyrocketed. Co-incidence? I am no smarter and certainly not more ambitious than most folks so if I could save for the downpayment on my first home years back, I trust most folks can do the same if they have to today.
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Post by Melissa on May 27, 2016 15:12:30 GMT
In our area rent is often much more expensive than the payment on a modest home. If a person can show that they pay their rent on time I think that would go a long way towards showing they could make a house payment. Of course the larger companies don't know much about a person, we are mostly defined by numbers...
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Post by here to stay on May 27, 2016 15:36:22 GMT
In our area rent is often much more expensive than the payment on a modest home. If a person can show that they pay their rent on time I think that would go a long way towards showing they could make a house payment. Of course the larger companies don't know much about a person, we are mostly defined by numbers... Has never been true for me at least. I was never so poor in my life as when I bought a house. Every time. Of course, I never could afford a fancy house with all things ready. Even when I built my current house I spent lots of money later on building fencing, putting in fruit trees and a garden, building sheds. But my earlier houses needed lots of fixing up to start with. I did a total rewire on my second house. Painting, inside and out. Every house has needed fencing and garden spots developed. And then repairs- ouch. But the longer I owned the home, the less I poured money into it. As it came to be what I wanted, I only had maintenance to worry about. I could much more easily cover rent because I was not free to do what I wanted with the property so never spent money on either improvements or maintenance. If the rent got too high, I coukd easily look for a better deal. Not an easy option with owning. |
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Post by Melissa on May 27, 2016 16:05:16 GMT
The rental situation in our area is pretty bleak. Of course when you buy a house you have normal maintenance, but adding buildings/fencing/fruit trees etc... is generally optional. One of my girls bought a low-priced house and their payment (with escrow for insurance and taxes included) is about $340 a month. You can't rent anything around here for that price. A trailer rents for $600.
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Post by bowdonkey on May 27, 2016 18:08:34 GMT
It's the same way here. One room apt $500 per month, old farmhouse, complete with mold, mice and bats, $600-$800 per month. Much smarter to buy a place, if you lose it, you're really not out anything if you figure the rent money was down the drain. My mortgage is right in the middle. If I lost this tick and mosquito infested bog, I could care less. My credit may be ruined, but I could care even less about that.
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Post by bluemingidiot on May 27, 2016 21:41:58 GMT
A home is most Americans major financial asset.
The price of existing homes increased by 3.4% annually from 1987 to 2009, on average. (Wikipedia) The general rate of inflation during this time was 2.9%. 2009 was a nose drive year for existing home prices.
Where rent increases really hurt is when you are retired and unable to increase your income. Yeah, you can find cheaper places to rent, but a lot of times they are in dangerous areas. A mortgage, if nothing else, is a fairly stable and predictable rent.
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Post by Deleted on May 28, 2016 0:01:44 GMT
When people had to save 10 or 20% as a downpayment, forclosures were very rare. When we started coming up with no and low downpayments, negative amortization loans and many types of creative financing the night bet of foreclosures skyrocketed. Co-incidence? I am no smarter and certainly not more ambitious than most folks so if I could save for the downpayment on my first home years back, I trust most folks can do the same if they have to today. "Had to" as in the past? Maybe it's just land+home (aka permanent construction) mortgages, but in our area it's almost always 30% down now if you want land as well. The only exception is if you are a first-time home buyer or on a low-income and can secure a FHA insured loan, then your down payment is downwards of 2.5% but they tack on an additional home insurance which makes it so you end up paying $100 or more monthly. Maybe the down payment is lower if you want a home in the city or the suburbs, we have never looked into that in-depth so I would not know. Honestly the reason foreclosures skyrocketed is because of the variable APR mortgages people got. These had a lower rate at the start and it sucked people in thinking how much they could save up front, or they could refinance, or keep on top of things down the road. Then the higher rates kicked in and foreclosures skyrocketed. Even those who were able to depend on their steady paychecks struggled. If you factor in those who had a loss of a spouse (loss of an income), loss of a job, medical emergency etc, that accounted for even more. A mortgage, if nothing else, is a fairly stable and predictable rent. As long as it's a fixed APR mortgage, agreed. I'm not sure you can even get a variable/adjustable rate mortgage these days. There was a lot of uproar about how unethical and scammy these were. |
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Post by Callie on May 28, 2016 0:52:12 GMT
I think it's really hard to save up 20% which is what a lot of loans ask for today. The trick to doing well with low-down loans, is to NOT borrow the $400K!! Run those numbers with a $150K loan....or $125K and see what they look like. Low-down loans are also for those that plan on staying put for a while. Buy a modest home, sink as much as you can into it down...and pay more than the payment.
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Post by Deleted on Jun 13, 2016 14:05:28 GMT
Aside from conventional loan you might first see the possibility in FHA Loan which has a minimum 3.5% down payment.
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