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43. More paramters involved

Wed Apr 24, 2013, 03:20 PM

Apr 2013

The problem during the bubble was that many had NINJA loans: No Income, No Job, No Assets - verifiable.

Many years ago, rule of thumb was to purchase a house at a cost of twice the yearly income.

Things have changed, of course, as price of houses rose faster than income.

But the main thing is for people to put something down. This way, they would not just walk away when they felt like it.

We purchased our house in 2002 with 10% down, 80% standard mortgage and 10% Home Equity Line of credit. We never used this line of credit except to pay it down, when their interest rate was high and they were playing funny accounting, we used a VISA loan to pay it off. That VISA loan, at 3.99% was paid off two years ago.

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If you do not have 20% as a downpayment for buying a house you should rent. Period. [View all] srican69 Apr 2013 OP

These days saving up that much money is very difficult for most people Marrah_G Apr 2013 #1

Living in Mass... Working in Boston... Agschmid Apr 2013 #79

I'm apartment hunting in MA right now Marrah_G Apr 2013 #82

It does I am about to do the move home... Agschmid Apr 2013 #83

For young families, that might be a bit much. For me (single), I've always had 20% to put down. SharonAnn Apr 2013 #2

That's a great plan for destroying any possibility of personal wealth Orrex Apr 2013 #3

Original post makes sound economic sense IMHO. nt clarice Apr 2013 #6

Only in an economy wherein people are paid enough Warpy Apr 2013 #41

I was going to respond...then I saw your tagline quote. 'nuff said. nt clarice Apr 2013 #49

What does this mean in thread #3? Gin Apr 2013 #7

It means that poster likes to have quirky signature lines that make you look twice. nt Common Sense Party Apr 2013 #23

The downside is a complete decimation of any assets, and getting evicted from your house. dkf Apr 2013 #11

Better to have no assets and risk eviction anyway? Um. What? Orrex Apr 2013 #19

Seven Reasons to Put 20 Percent Down dkf Apr 2013 #32

Lovely. But still an arbitary and deliberate barrier to keep people from owning anything Orrex Apr 2013 #36

Excellent -- I couldn't have said it any better. srican69 Apr 2013 #40

With 20 percent down there is improved chances the bank will make appraisal fit sale price. we can do it Apr 2013 #56

Sure, if you have the 20%. geek tragedy Apr 2013 #65

How does a down payment safeguard the buyer in a down market? DotGone Apr 2013 #74

Beyond that, there are other options BlueStreak Apr 2013 #84

... NutmegYankee Apr 2013 #48

You're probably one of those people who thinks that $250K per anum isn't rich Orrex Apr 2013 #50

No reason for a personal attack. NutmegYankee Apr 2013 #54

I think it was just an example... cyberswede Apr 2013 #67

So I'm 30 years out of date? Orrex Apr 2013 #92

No 80's prices if you live in smaller towns in the south of midwest...... truegrit44 Apr 2013 #87

Plenty of homes for that price where I live. kcr Apr 2013 #90

I think it should be a self imposed rule wercal Apr 2013 #70

How is someone less trapped with a big downpayment than they would geek tragedy Apr 2013 #77

You really don't know? wercal Apr 2013 #85

But if you don't put the money down, you have that money in cash to pay the difference. geek tragedy Apr 2013 #86

You are making an assumption that one has the money in hand... wercal Apr 2013 #91

the perils of giving real estate advice is that geek tragedy Apr 2013 #98

Well I agree markets are very, very different wercal Apr 2013 #100

Actually, down markets are when down payments are the lowest in NYC. geek tragedy Apr 2013 #102

+1 n/t Agschmid Apr 2013 #80

I put down 20% and lost it all when the bank stole my house. tridim Apr 2013 #4

You've got it all wrong Orrex Apr 2013 #21

Feisty today... Agschmid Apr 2013 #81

And if you have 20% down, don't have to have mortgage insurance. sinkingfeeling Apr 2013 #5

When I can afford to rent... Wounded Bear Apr 2013 #8

Here's what I think. Right now, if I move I should buy with zip down because my Bluenorthwest Apr 2013 #9

why 20% why not 50% or 2%? bowens43 Apr 2013 #10

Income has not kept up with inflation to adhere to that old "rule". Lars39 Apr 2013 #12

This is the reason.... MAD Dave Apr 2013 #59

I hear ya, we've been trying to save and not getting anywhere. Lars39 Apr 2013 #75

We've got some.... MAD Dave Apr 2013 #95

Congratulations on landing a good union job! Lars39 Apr 2013 #103

Why blame shitty governments? This is capitalism fella.... socialist_n_TN Apr 2013 #99

I think you're projecting Mopar151 Apr 2013 #13

Whatever makes housing prices crash is fine with me. ;) reformist2 Apr 2013 #14

I disagree. ohheckyeah Apr 2013 #15

I disagree. Having people own their home has upaloopa Apr 2013 #16

You need a stable job supernova Apr 2013 #17

I always wished the money I paid in rent would go to pay for a piece of Cleita Apr 2013 #18

Pretty hard to do when wages suck like they do neverforget Apr 2013 #20

I think in 'normal' times with normal interest rates this makes sense however, snappyturtle Apr 2013 #22

Hardly.. if you can take advantage of low rates, you should Godhumor Apr 2013 #24

I bought my home (a duplex) in 1990 Blue_In_AK Apr 2013 #25

The 20% rule isn't designed to protect homebuyers, it's to protect lenders. JVS Apr 2013 #26

In many states, a mortgage is a personal obligation, so you can't walk away FarCenter Apr 2013 #72

I think... Rider3 Apr 2013 #27

That would mean no first-time home buyers, which would mean no home buyers at all. geek tragedy Apr 2013 #28

Err, whatever. a la izquierda Apr 2013 #29

Even if I had 20% to put down I wouldn't... Kalidurga Apr 2013 #30

I am a debt service to cash flow guy GitRDun Apr 2013 #31

I think bullshit. I didn't put down one red cent..... Little Star Apr 2013 #33

Haven't you heard, money is a concept, and can be changed to meet the situation.. CK_John Apr 2013 #34

first time home buyers need a break Mosby Apr 2013 #35

Isn't that more a rule for lenders, not borrowers? BlueCheese Apr 2013 #37

The direct advantage is that first-time buyers will much less for a starter home! Yo_Mama Apr 2013 #64

Nice drive-by. Orrex Apr 2013 #38

With wages depressed so far, it's nearly impossible to save that much Warpy Apr 2013 #39

It really depends on the market the individual is in. JVS Apr 2013 #44

If you purchased a home before you were ready ohheckyeah Apr 2013 #42

More paramters involved question everything Apr 2013 #43

The real answer is better wages, not easier access to credit. Yavin4 Apr 2013 #45

I did not put 20% down on any of the three houses that I purchased Gothmog Apr 2013 #46

I don't think it would have made a difference unapatriciated Apr 2013 #47

from the buyers perspective... discntnt_irny_srcsm Apr 2013 #51

If you have $50K and buy a house for $250K, you now have $30 K. FarCenter Apr 2013 #52

I totally disagree. We bought our first house 3.5% down FHA in 1993. we can do it Apr 2013 #53

I think average home prices in my area are about $750k. So that means a $150k down payment. With kestrel91316 Apr 2013 #55

My stepdad's VA loan was $100 down and $100/mo for 30 years hobbit709 Apr 2013 #57

10% would be sufficient Yo_Mama Apr 2013 #58

Houseing crash had little to do with the lower and middle class not putting money down davidn3600 Apr 2013 #60

my point is that a higher downpayment would have kept a good portion of the speculators out. and srican69 Apr 2013 #68

If that were the case NiteOwll Apr 2013 #61

That is nice, the other thing Cosmocat Apr 2013 #62

it's kind of unusual for people to have ~$100k of liquid assets 0rganism Apr 2013 #63

Until recently - it was unusual for people to buy ~500k houses srican69 Apr 2013 #66

Try buying a place in the NYC area for less than that. geek tragedy Apr 2013 #69

I know .. I live in the NYC Metro area too ... it wasnt this expensive in the 1990s srican69 Apr 2013 #71

How things have changed--western Crown Heights 2brs cost $650K now. nt geek tragedy Apr 2013 #73

$500k's a pretty standard average price for upper-midrange houses around here 0rganism Apr 2013 #94

unfortunately wet.hen88 Apr 2013 #76

my first house required a downpayment DesertFlower Apr 2013 #78

Not always tammywammy Apr 2013 #88

I disagree laundry_queen Apr 2013 #89

No. I had to pay $500 in earnest money, ecstatic Apr 2013 #93

It USED to be that way, everywhere SoCalDem Apr 2013 #96

If this were to become an actual rule gollygee Apr 2013 #97

Understanding home ownership Benton D Struckcheon Apr 2013 #101

It's much safer to be long inflation vs short inflation. geek tragedy Apr 2013 #104

It depends. SheilaT Apr 2013 #105

So anyone under the age of 30 will never own a home lol. Harmony Blue Apr 2013 #106