You've got to be f*()in kidding me - 3% downpayment mortgages are back

[nutsy54]

OP mad I'm using the VA through GMFS to get a 0 down mortgage on a 181k dollar brand new home.

Tell us how mad you are, after you calculate the difference in total interest payments between your "0 down" loan, and if you'd had a decent down payment...

[Streetbull]

http://money.cnn.com/2014/12/08/real....html?iid=Lead

In an effort to open up lending to more low-income and first time home buyers, Fannie Mae and Freddie Mac announced Monday that they will start backing mortgages with down payments of as little as 3% of the home's price.

----------------------------------

This is disgusting. What could go wrong???

LMFAO

Almost as if the bastards WANT another speculative collapse...

[MangoPort]

The incentive programs for mortgage specialists is still structurally wrong.

They get paid to give out larger mortgages (up to the maximum they're allowed). So the individual person approving the mortgage will work within the parameters they're given to push the limits.

[magog704]

lol i put zero down in 2007. no PMI.

couple years ago my mortgage qualified for some type of troubled asset relief program. BofA was kickin people out they house and the feds fined them a lot and this was part of that. they knocked almost 2 points off my loan free of charge.

seven years later i can probably sell it for what i bought it for, thanks paul volker.

[BrbGettingSwole]

There were many causes of the financial crisis, but low down payments played a big role as well. When you have so little equity in a home, you are far more willing to default because you are risking little. So backing 3% downpayments now is just ridiculous.

[magog704]

There were many causes of the financial crisis, but low down payments played a big role as well. When you have so little equity in a home, you are far more willing to default because you are risking little. So backing 3% downpayments now is just ridiculous.

it aint that bad. people do helocs too, like an 80 20 except the 20 is a home equity loan.

[Lendogg]

cheap housing prices will soon be upon us
crash round 2

[RoboBob]

I think its obvious to pick out who works in real estate, banking, mortgages and who doesn't.

The biggest issues that caused real estate crash were
- stated income loans
- high appraisals because homes were appreciating so quickly
- ARM loans

They allowed people to basically make up their income, over value the home and approve loans that exploded in payment after 5 years. A lot of these people still put money down when they purchased, especially those buying investment properties.

Standard FHA loans, which have been around a long time, require 3.5% down; and VA/USDA were always 100% financing.

I purchased my home about a year ago and used USDA. The home was a foreclosure, bank owned and we purchased for 80% of the appraised value. I also had the Seller (Wells Fargo) cover all over our closing costs (true sellers help, the amount of concessions was not rolled back into the purchase price). All that plus my int rate is 4.25%.

In this market I was able to purchase a home at 4.25%, attain 20% equity immediately without putting a penny down and save $9k because the seller paid my closing costs.... Please tell me how putting nothing down is so terrible for the future economy. Well, I did take a check for $68.00 to settlement.

Income is verified, property is appraised by only a certain pool of appraisers per county (most of the time we have to fight on value because they are too conservative in their assessment) and people are going into budget payments (tax/insurance paid in installments through the year that are held in escrow).

These programs allow people to not be cash poor when they buy a house. Brb, put $40k down and now living pay check to pay check. Brb, if I need $40k down than I should have at least another $20k in bank. Brb really need $60k to buy a house. Brb, not buying a house until I'm 50 years old...

[NeoKantian]

R/P histrionics strike again.

[Streetbull]

"New study confirms economy was destroyed by Democrat policies..

A new study from the widely respected National Bureau of Economic Research released this week has confirmed beyond question that the left's race-baiting attacks on the housing market (the Community Reinvestment Act--enacted under Carter, made shockingly more aggressive under Clinton) is directly responsible for imploding the housing market and destroying the economy."

http://www.examiner.com/article/new-...ocrat-policies

If someone wanted to destroy a great country, then they might give them liberals.

[frankenstein78]

Tell us how mad you are, after you calculate the difference in total interest payments between your "0 down" loan, and if you'd had a decent down payment...

If he's smart about it, he'll make out like a bandit.

[Mcfreako]

Ban houses

[ZenBowman]

People aren't always that smart. Espcially the ones who are going to take the 3% down mortgage. It's set up to target them, I don't why banks would institute this when there's such a high chance of default.

Why wouldnt you take the 3% if it was available? We took it, got in early, and can comfortably afford a house with double the mortgage we are paying now.

The real problem occurs when they lower lending standards, not make lending rates more favorable.

[HumptyBrah]

OP mad I'm using the VA through GMFS to get a 0 down mortgage on a 181k dollar brand new home.

A brand new home for $181k? Do you literally live in an anus?

[repsDTGdaily]

A brand new home for $181k? Do you literally live in an anus?

he probably lives in the middle of bumfuk

[frankenstein78]

I think its obvious to pick out who works in real estate, banking, mortgages and who doesn't.

The biggest issues that caused real estate crash were
- stated income loans
- high appraisals because homes were appreciating so quickly
- ARM loans

They allowed people to basically make up their income, over value the home and approve loans that exploded in payment after 5 years. A lot of these people still put money down when they purchased, especially those buying investment properties.

Standard FHA loans, which have been around a long time, require 3.5% down; and VA/USDA were always 100% financing.

I purchased my home about a year ago and used USDA. The home was a foreclosure, bank owned and we purchased for 80% of the appraised value. I also had the Seller (Wells Fargo) cover all over our closing costs (true sellers help, the amount of concessions was not rolled back into the purchase price). All that plus my int rate is 4.25%.

In this market I was able to purchase a home at 4.25%, attain 20% equity immediately without putting a penny down and save $9k because the seller paid my closing costs.... Please tell me how putting nothing down is so terrible for the future economy. Well, I did take a check for $68.00 to settlement.

Income is verified, property is appraised by only a certain pool of appraisers per county (most of the time we have to fight on value because they are too conservative in their assessment) and people are going into budget payments (tax/insurance paid in installments through the year that are held in escrow).

These programs allow people to not be cash poor when they buy a house. Brb, put $40k down and now living pay check to pay check. Brb, if I need $40k down than I should have at least another $20k in bank. Brb really need $60k to buy a house. Brb, not buying a house until I'm 50 years old...

Some solid points there. It is fun to see R/Pers freak out about things they don't understand well (and fun to egg them on sometimes). Spot on about the causes of the collapse last time around - especially ARMs and liar's loans. Warnings on those were abound years before the bubble burst. Then the mixing of extremely weak mortgages into credit default swaps to hide the weakness of the loans. Don't forget the ratings agencies giving A++ to virtually all CDS's and REITs, even utter **** ones. Those supposed A++ investments were bought by conservative and prudent investors just like blue chip stocks are, looking to shore up pension funds, etc. Since the reach of the fraudulent and floating loans had spread so far into other parts of the financial markets, once it began to crumble, so much more than just lending banks were affected.

BRB, pretending like homes can double or triple in value in the span of just a few years and not be a ticking timebomb. Conditions simply are not interconnected and systemic like 2000-07 period. 3% down buyers will default more commonly than 20% down people, but it won't be dramatic.

Being so worried about the 3% down mortgages now is like having lived through the Cold War, then getting all worried several years later because Venezuela doesn't like our policies. Zero fuks given. Venezuela isn't worth a second thought, just as 3% down mortgages aren't a systemic risk.

BTW, I don't work in real estate or banking. Just educated on this subject.


Edit: waiting for one of the perpetual Chicken Littles to come in with a random bad statistic (i.e. labor force participation rate, etc) rather than approach any of the truth myself or RoboBob wrote, to enforce their beliefs that everything is bad.

[Aesthetical]

I have a decent credit score, around 680 last time I checked.

I would be a first time home buyer.

If I am looking at a home for around $300,000, I would only need $9,000 to get into a house?

Where do I sign up?

[repsDTGdaily]

This isn't that bad op.

- what really got people in trouble was they got adjustable rates instead of fixed.

- All the foreclosures that where happening was because people couldn't pay their new monthly payments when interest rates went up. Some people payment doubled!!

Lesson learned
- Get fixed rate
- But really, we all knew to alway get a fixed rate before all that had happened

adjustable rates were a killer. it's amazing they would still offer it after the disaster that came with them

[magog704]

I have a decent credit score, around 680 last time I checked.

I would be a first time home buyer.

If I am looking at a home for around $300,000, I would only need $9,000 to get into a house?

Where do I sign up?

u sign up at the bank homey.

[twovalvekid]

In4 a cheap condo in 5 years when another collapse happense. Time to save up!

[tiger1999]

Normally 5%

[Lakersbake]

Op, I hear ****lia is excepting new arrivals.

Dont want the federal govt giving out awful and unconstitutional loans? Then dont live in America. /flairon.

[Aesthetical]

u sign up at the bank homey.

brb homeowner

living the dream

[ymer]

I don't see a problem

[goody1]

Tell us how mad you are, after you calculate the difference in total interest payments between your "0 down" loan, and if you'd had a decent down payment...

Actually it's not that bad. I took the zero down VA loan in April with a 3% interest rate. I just throw extra money at the principle every month.
Hard to pass up zero down and 3% interest rate. My mortgage is only $100 more than the townhouse I was renting

[Trip91]

I'm looking to buy a house and currently saving up, but even if they brought the 3% to England I don't think I'd go for it. I don't even want to do 5%. 10% minimum for me on the premise that it's cheaper per month to pay back. Don't want to be struggling on payment every month with the current job I have, having to pay an extra few hundred � per month because I didn't want to wait and save up for comfortable deposit.

[tng83]

A brand new home for $181k? Do you literally live in an anus?

Wat?

http://www.dsldhomes.com/474-scotch-pine-dr

Building this floorplan with different colored brick/tile/cabinets and upgraded appliances. And it's minutes from downtown, school, shopping center, and hospital.

[Lakersbake]

When I finally buy a house it will be 50%+ down payment. Not gonna be a debt slave for 30 years to those *******s.

[BrbGettingSwole]

adjustable rates were a killer. it's amazing they would still offer it after the disaster that came with them

What's funny is that republicans want to get rid of Fannie and Freddie, which would effectively render fixed rate mortgages unaffordable for private lenders.

[Flakker]

I got my place with like 5k down including closing cost, under 4% interest. I also bought foreclosed and my property is worth much more than what I bought it for.

This sets me up to sell in 5 years use the cash from selling for a sizable down payment on a much bigger home.

lol i put zero down in 2007. no PMI.

couple years ago my mortgage qualified for some type of troubled asset relief program. BofA was kickin people out they house and the feds fined them a lot and this was part of that. they knocked almost 2 points off my loan free of charge.

seven years later i can probably sell it for what i bought it for, thanks paul volker.

There were many causes of the financial crisis, but low down payments played a big role as well. When you have so little equity in a home, you are far more willing to default because you are risking little. So backing 3% downpayments now is just ridiculous.

Adjustable rate, % down, liars loans, etc. all played a part in the means that allowed for the financial collapse.

But the underlying belief, the causa prima, is this perfect faith that all homeowners/perspective home owners have - that housing values will always increase. Just look at some of the above posts. "Someone else will buy it for more." "My home is worth what it was in 2007."

There is no economic reason for this to be the case, thus housing is a ponzi scheme with each owner believing ardently in the 'greater fool' theory - they'll make it out, some other chump will buy their house for more than they paid for it.

This faith is still very much alive and well, despite 2007/8, despite the fact that we've off-shored all of our production, despite the fact that american hegemony is flagging, despite the fact that we're no longer #1 economically, despite the fact that the dow/S&P is dramatically overpriced, ect.

I live in CA. Everyone agrees that 2007 prices were overblown, incorrect, etc. But looking at the housing prices here in CA, the historic graph of area prices is a perfect "bath tub curve." Yet everyone is rushing in, putting as little down as possible, betting on 7/1's, flipping, etc. It's the same **** all over again.