0% Mortgages Will Bring the Next Wave of FORECLOSURES
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- Опубліковано 10 чер 2024
- Word on the street is zero % down mortgages are making a comeback. While this loan option may seem like a life raft to those buyers who are struggling to buy a home, experts are warning that these loans could lead to another 2008 housing crash and bring on a wave of foreclosures. I’m going to explain what this zero percent down loan is all about, share the experts opinions on it and share with you alternative loans or programs you should consider.
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Jacqueline "Jackie" Baker
NJ License 1541448
Coldwell Banker Realty
Allendale/Saddle River
#realestate #jackiebakerrealtor #jackiebakersellsnj #homebuyingtips #homesellingtips #realestateinvesting
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A Financial Planner told me Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. How can take advantage of compound interest and potentially grow your retirement savings overtime?
In times like this it is better to seek help from a professional as such key decisions are better guided by experts with market experience.
That is exactly the reason I stopped trusting the financial advice of UA-camrs; in the long run, I only end up with a jumbled collection of stocks and bonds. Whereas all I needed to earn over $350k in less than two years was guidance from a true market expert.
this is huge! mind if I look up the advisr that guides you please? only invest in my 401k through my employer for now, but enthused about diversifying my investments for a prosperous financial future
I just Googled her name and her website came up right away. It looks interesting so far. I'm going to send a mail to her and let you know how it goes.Thanks for sharing truly!
Catch 22... like myself 401k due to job changes... not worth it. As I have to work a certain amount of time.
In the USA, individuals living in cars due to partial homelessness result from a complex interplay of factors. High housing costs relative to income, stagnant wages, and income inequality drive this issue. Job loss, weak social support, medical expenses, evictions, and lack of affordable housing also contribute, while systemic problems and inadequate policies further perpetuate the phenomenon.
Considering the present situation, diversifying by shifting investments from real estate to financial markets or gold is recommended, despite potential future home price drops. Given prevailing mortgage rates and economic uncertainty, this move is prudent, particularly due to stricter mortgage regulations. Seeking advice from a knowledgeable independent financial advisor is advisable for those seeking guidance.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. Finding financial advisors like Marisa Breton Dollard who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Marisa has the appearance of being a great authority in her profession. I looked her up online and found her website, which I reviewed and went through to learn more about her credentials, academic background, and employment. She has a fiduciary duty to protect my best interests. I sent her an email outlining my objectives and also booked a session with her; thanks for sharing.
My problem was never with the down payment. Its the sky high monthly mortgage payment due to high interest rates and taxes where I live. Crazy how 80k a year is not enough to afford a house.
Historically speaking, interest rates are still relatively low. They're about 7% or so. When I bought my first house in 1995, my interest rate was 8.5%. The difference is in the price of homes now. I paid about 105k for a 1,300 sf house in 1995. Now it would be close to 400k.
Us Millennial got screw over the most.
Thank you 🙏.
@nunyabusiness7927 $105k is a big difference at 7% than $400k is unfortunately (yes wages are higher but like someone before said, they make $80k/year and can't afford a house. Sadly true because I make almost twice that and as solo borrower it doesn't feel as comfortable as it should with $148k a year (in NJ, high prices $10 - $15k a year property taxes
@@nunyabusiness7927the 'relatively low' statement you made doesn't hold weight when the cost of everything is inflated. It's HIGH. Period. The cost of homes are over inflated.
Mortgage rates are currently at an all time high since 2000(23 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market
The stock market is no different, to maintain profit, you need to have some in-depth knowledge on the market
True, I mostly just buy and hold stocks, but my portfolio has been mostly in the red for quite awhile now. Unfortunately to be able to make good gains, you’ll need to be consistent and restructure your portfolio frequently.
in my opinion, it was much easier investing back in the 60s but it’s a lot trickier now, those making consistent profit in these times are professionals reason I’ve been using an advisor for the past 5 years to consistently build my portfolio in preparations for retirement.
my partner’s been considering going the same route, could you share more info please on the advisor that guides you.
Annette Marie Holt . She is well known; you ought to look at her work.
Most Americans find it hard to retire comfortably amid economy downtrend. Some have close to nothing going into retirement, my question is, will you pay off mortgage as a near-retiree, or spread money for cashflow, to afford lifestyle after retirement?
as most investing-related questions, the answer is, it depends.. my best suggestion is to consider advisory management
Agreed, the role of advisors can only be overlooked, but not denied. I remember in early 2020, during covid-outbreak, my portfolio worth around 300k took a slight fall, apparently due to the pandemic crash, at once I consulted an advisor in order to avoid panic-selling. As of today, my account has yielded big fat yields, and leverages on 7-figure, only cos I delegate my excesses right.
this is huge! mind if I look up the advisr that guides you please? only invest in my 401k through my employer for now, but enthused about diversifying my investments for a prosperous financial future
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
very much appreciated, your response suggests a person of benevolence.. just inputted her full name on my browser, and came across her site, top-notch qualifications! she seems well-qualified
If you have nothing to put down, in this climate, you cannot afford it. This is stupid.
Damn I misread, thought it was 0% interest :) :( . I would always put down 40% down payment. 20% down payment is still not enough.
@@OGtruthserum It is not a problem for Californians, They pay houses cash plus 10% TIP , as long as they snatch it away from the locals.
Gentrification in other states is their mission
@@andreunz On top of voting for the same party and turning other states into CA.
@@OGtruthserum Well... People do.. 1) What they WANT to do or 2) what others ALLOW them to do what they want to do
And we already learned this lesson the hard way…
We no longer have a mortgage, my husband is retired and wants to travel to Thailand. We don’t splurge, but inflation has hit hard, and I want to relocate while DCA-ing into his TTSA, which is less than $400k. I'm cautious with rising costs and have discouraged the idea due to current insecurities.
Roughly how much do you have in the RRSP? A financial advisor can help grow and budget your money for travel. My spouse and I always delegate our excesses.
Hiring a financial advisor means getting help with cash flow, investments, risk management, estate planning, and legacy.
An advisor can help you visualize how your RRSP fits into your overall plan and determine the best investment strategy.
The ones I find are young and charge 1%, which I’m not comfortable with.
Our FA emphasizes creating "worth-living assets" like memories, pursuing interests, and family trips, while growing finances.
We control the normal dont let anyone tell you now is a good time to buy. Be patient, we control the market. Let the realtors, brokers, builders all struggle and come back to our reality. Remind them they work for you. This is the most financially expensive decision you will ever make, be patient and smart we control the market.
It’s not those individuals you mentioned above. They are a symptom for housing market. The true issue and culprits are the congress critters/fed reserve who refuse to pay out national debt. If we’re serious about paying our national debt and this strengthening our dollar home prices will go down!!! Congress/Fed reserve doesn’t care though.
I really agree. People forget we have been through ups and downs since the beginning of this country. It’s all cyclical.
Been hearing this for years, yet home prices are still rising. I heard this in 2019 and that was a good time to buy.
You are so right people don’t want to be patient so they rush in and pay too much for these houses a lot of these houses are not worth what the owners are asking
Terrible advice, but hey others will make a move if you don’t
Taxes are up, credit card defaults are up, people are taking out equity lines to pay their bills, mortgage applications are at a 50 year low. This market is going to drastically change over the next 18 to 24 months
Yes. You’ll own nothing and be happy.
0 down loan Worked for me.
2018 bought in Nashville. House cost 265+2nd mortgage down-payment of 15k. 280 total at 4.25% plus pmi I refinanced in 2020 to 2.5% got rid of pmi and rolled all into one loan. My house is now worth 480k... if you are disciplined and flexible you can do this. However Covid really was a once in a lifetime event that occurred that really just secured my financial future
No. It’s not once in a lifetime. The elites have plenty waiting for just the right time.
You are in a different situation since you had a normal interest rate and the price of your home was still low, the prices are sky high right now and it looks like the market is going down, there are lots of lay offs happening, the interest rates are up near 7 percent, and it's legit 2007 2008 all over again!
We are talking about 2024 man totally different.
Always remember rent is the most you will pay for housing that month. A mortgage is the least you will pay for housing that month.
I try to plan an additional 40% over my mortgage just to cover unexpected expenses.
Our current home was on the market in 2005 for $269,000, which for the small town we live in in So Cal and the horrible condition of the house, was a ridiculous price. We looked at it, but could not afford that much money for a house in so much need of repair. Someone else bought it. They did a few things to it but not a lot. Fast forward to 2011. They got divorced, moved out of state and defaulted on the house. We picked it up for $78,000. Yes, we have put a lot of money into it as there were problems we didn't know about, but we had it valued last Dec and it came in at a little over $500,000 and we aren't quite done remodeling it yet. Now we have the problem of wanting to move to Prescott AZ with our daughter, however, homes there are worse than here in CA. So, I guess we will wait and see what happens to the market and maybe we will be looking for another foreclosure if things go south again.
You guys are smart, especially moving to the few places in AZ that has trees. Prescott is the only place in Arizona I would want to live.
@@OGtruthserum Yes we love Prescott! It is very similar to where we live here in CA so we are very comfortable there. Our other daughter lives in Green Valley and that is much more affordable, but we can't do the desert. We just had no idea Prescott was so very pricey. Don't know if we will be able to pull it off because half a million there is only going to get us a fixer upper or a very small house.
2008 won't happen again
ARMs are more of an issue than a low down payment. Although both can contribute to people ending-up underwater on a property and foreclosing.
It wasn't so much, 0 down that was the problem, it was ARMs. People barrowed low apr and it jumped to the point they could not pay the mortgage
It was a sad situation.
I bought my home with 0 downpayment in 2007 and I still live in the home. I didn’t have a balloon payment, but I did refinance a few times over the years and I pay WAY less than I would have paid in rent for a small apartment. But for the 0 down mortgage I couldn’t have afforded a home. I would have needed over $100K to put down 20% and rent in our area is high. I was able to keep the home for years under water and now my house has several hundreds of thousands of dollars in equity. I could sell my house and buy one using that equity but haven’t done it because I like my house. It’s affordable and the kids are happy in the neighborhood and almost grown
I did that as well in 2007, I bought a condo and I was stuck in it for 9 years, which was fine because I kept my job and could easily pay the mortgage and condo fees. Sold it in 2016 and only walked away with 3K, but I bought a house for 270K and now it's worth around 550K.
This is why I think resale value potential is the most important aspect when considering which home you buy. We move a lot and for us it means something different. But I think everyone needs to consider that when they buy a house. Unless you are 100% sure it is your forever home
NJ resident here. I’m single about 80k salary and I’m seriously struggling to buy a two family home in central NJ even with a 20 percent down payment on a Fanny may. Rates are too high and getting approved with an 80k salary on a decent home has been impossible. Getting seriously discouraged I will Ever be able to own real estate. 😓
No. You’ll own nothing and be happy. Doesn’t anyone pay attention to what’s going on??
Same. I am a single mom and I currently rent a 1 bedroom near Princeton. I would really like to rent a 2 bedroom but rents are insane and buying is also insane with not just the interest rate but the fact that people will pay 50-100k over asking price!! My income has gradually increased from to a little under 100k but I do not have that kind of cash on hand :/ another thing is taxes. Income tax makes my pay raise almost not worth it and property taxes are insane here in Jersey.
@@vevasika props to you sticking it out it’s such a tough spot to be on your own and working so hard and not being able to offer as much as you’d like to a kid. I don’t have kids but I can only imagine, hang in there all we can hope is for rates to drop and taxes to stop increasing so dramatically. The gap between renting and buying a home needs to both be reduced otherwise rent will keep us from home ownership forever. Hang in there 🙏🏻🙌🏼💪🏼
@@Marqjosh aww thank you I wish the best of luck to you as well. As long as there is food on the table though I am thankful but I hope things get easier for everyone
@@vevasika thank you and amen to that 🙏🏻
If your income isn't high enough to save for a down payment, your income isn't high enough to pay for the mortgage (and taxes/insurance/maintenance/furnishing/etc).
Exactly. Owning a home will cost a lot even after the purchase. Saving for a downpayment will at least show you have the ability to save up for unforeseen expenses.
It's the hard truth.
I love this well put together presentation in under 10 minutes regarding Zero Down Mortgages!
One thing that is often being overlooked that could cause a wave of foreclosures are these homeowners insurance companies dramatically raising thier premiums year over year on top of property taxes dramatically rising year over year. People who could afford a home comfortably and make thier mortgage payments a few years ago can quickly get caught off guard with those two increased costs. Something needs to change soon!
I can put down 250K for a down payment once I sale my house, but 250K will not buy a home today unless you go to small town or bad area
Hell even in small town, 250K isn't enough.
Plus you’ll need another 200k plus for renovations at least here in Boston , most houses are too old almost trash .
You can get a nice home in Michigan, Ohio, Indiana, Oklahoma, Alabama, for that amount
Tennessee and Texas you can get a nice home for 250k
@@MCthespeaker with 250K yo udo not even get a tree in Austin, capital of Texas and the galaxy, according to Californians
I am so happy that i made a productive decision about my finances that changed my life forever. I am a single mother and i live in Florida, i bought my first house in September and i hope to retire next year at 40 if all goes well. Thanks to Mrs Judith M Layton for helping me achieve this.
Wow. I'm a bit perplexed seeing her been mentioned here also Didn’t know she has been good to so many people too this is wonderful, I'm in my fifth trade with her and it has been super.
The very first time we tried, we invested $1000 and after a week, we received $3900. That really helped us a lot to pay up our bills
You trade with Judith M Layton too? Wow that woman has been a blessing to me and my family
I'm new at this, please how can I reach her?
I was skeptical at first until I decided to try. It’s huge returns is awesome! I can’t say much.
Thanks for the information.
Any time! Thanks for watching!
I did 0% down in 2008. It was life changing for me. I highly recommend it. When I sold that house 6 years later, I made 110k which changed my life and opportunities. I think it's a great thing. Renters can now own. Most of them can afford it.
The banks and the Fed are so out of touch with what homebuyers need. The down payment isn’t the issue, it the fact that housing prices have inflated by 30% since the pandemic and people’s wages are no where near in line to keep pace with that. Wich begs the question, if no one can afford to buy a home in the northeast, then who is buying up all the properties and surprising the inventory?
0 down is not risky people buying more than they can afford is the real issue! 0 down is awesome
@momof4121 0 down costs more. You're financing 100% of the house
People can easily walk away from home and mortgage when market goes down.
Also, you need mortgage insurance for a $0 down loan. At least through my bank.
Until you get 20% equity in your house, you're going to have to pay PMI insurance.
@@DesertScorpionKSA some lenders, you don't need PMI.
Thank you, Jackie.
Thank you for the video!
My pleasure!
I think, no matter what the conditions, 0% down is ALWAYS risky. If you don't have the discipline or the means to save at least a decent chunk towards a down payment, then you're not ready to buy a house. That's before you even consider the maintenance that you (as the owner) are now responsible for. Financial maturity and the ability to follow a budget are key. If you can't do that, you're headed for trouble.
100%. You need to be able to save before buying a home. I’m interested in these programs solely for help to get to 20% down or at least closer if it works that way, but I’ve saved way more than that in investments. Just a little low on cash due to that (currently I enough cash for 10% down), but I’m not worried about my discipline to save.
I sort of agree. However, in ‘18 I took a $0 down VA loan, bought the worst house in a really good neighborhood, spent around $50+k over the years fixing it up. It’s beautiful now.
One does need to having lots of savings for maintenance, etc.
@@CMBBmc-jd6ur - Good for you. :-) I feel like you are the exception to the rule though and used it strategically and understood what you were getting into.
Agreed, 1 major repair away from foreclosure and possibly bankruptcy. Basic financial literacy is much needed in this country. I thought these 0% loans would be dead after the great financial crisis. Will be good for investors later on as defaults increase.
I never put anything down. What happens if you lose your home? You lose your down payment
If you can’t save up a down payment you probably can’t afford the house
Really enjoy your channel. Lots of helpful information!
Sounds like this is the ultimate test of the legitimacy of the "credit score". Is it ACTUALLY an accurate measure for the reliability of borrowers as a whole?
We are about to find out.
Nope. Especially when a person can pay some money and drastically increase their credit score within a month by "piggybacking".
I see endless ad after ad for 1% down mortgages, and I can't see how this can possibly lead to anything but absolute disaster for borrowers trying to buy a home. it seems absurd, and completely irresponsible. I'm glad you covered this - it makes me even further want to do some content of my own. predatory credit is once again out of control. just calculating how much interest you'd be paying on like.. a 500k loan plus mortgage insurance is obscene. You pretty much are underwater from the get go whether prices go down or not simply because of how much interest you'll be accruing by the literal day.
I am able to afford a 20% down payment but i will definitely go for a 0% and invest the money i would have used for the dow payment. Hight home prices and mortgage are the issue not the down payment!
Curious .. what about the interest on the down pmt assistance .. surely it is accruing ??
Let me help you a bit, so to bring your knowledge of the topic up to speed. Freshly harvested from CNBC today 12th June 2024
Total mortgage application volume surged nearly 16% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.02% last week from 7.07%.
Applications to refinance a home loan jumped 28% last week, compared with the previous week.
What's the typical interest rate on the balloon payment second loan?
Hi Jackie I'm so gald you spoke to the fact that there are regulations in place now that can help safeguard against another housing crisis. I remember the 1% teaser loans coming out and it smelled fishy. I was right it lead us into the crisis. Great video.
I'm a realtor here in Florida and I had a client about a year ago have this type of loan, it did close. A relative in the Northeast about 3 months ago tried to buy a house with the same loan but didn't. Reasons had nothing to do with loan size or type, there was other factors.
Residential real estate is such a mind pluck. I've been wrong about it for 20 years and now I think it's never going to correct.
0% was common in the UK for a while many years ago, but it drove up the housing prices, and was later removed as a finance product.
I am sensing some will become billionaires lending those 2nd loans 😅
I never understood how someone would take a zero down mortgage / in the end, the cost is exorbitantly higher. And this type of loans were part of the 2007 crash.
My first home in the late 90's I put up 20% and still had a 8.9% mortgage rate - normal for the time. Second home was FHA locked at 6% - again, normal and doable.
I had 2 first time home buyer and never put anything down and didn't have a second loan but that was 2002 and 2006.
In 2008 we used a 3% down mortgage and bought a foreclosed home fixed it up and we had our 20% then and there it works but you got to be very careful. We sold that home then in 2019 and had $120,000 equity. Just be careful.
How can anyone afford the mortgage payment if youre putting 0% down..... When I check around, prices are so insanely high, the payment for a situation like that would be like 70% of my income.
state programs are awesome.... but you should complete the course and secure the loan BEFORE you start looking for a home. Also, look into county and citywide assistance programs as well.
There is no more risk on this mortgage than any other mortgage.
Unless you buy a house at an overly inflated price, then, the market cools housing prices to realistic prices. You could end up owing even more on your supposed 0% down deal by having a home valued less than you paid (or you're paying) for.
I agree. But that could also happen with a 3% down house. So I don’t think it provide any more risk. Given that this is only available for individuals earning 80% of the area medium then as long as folks buy within their budget… they should be good. The problem is that people don’t. So whether it’s 3% down or 0%. If you can’t afford the mortgage then wait.
Well, unless there is a recession and the person loses their job… With no money down, and a need to sell these people will be foreclosed on because of a two or 3% decline in real estate prices because they have zero equity.
It is def more risky/expensive to finance 100% of the home at current interest rates versus 80% of the home. Simple math.
@@lexa3331 LOL My statement was for 3% down. Most homebuyers today who would be using this product would not be the ones putting down 20%. This is for people who are earning 80% of the area median income.... so this is more than likely people earning 50-80K -ish.
LOL. 2 completely different target buyers.
Buyers can barely afford a first mortgage. What makes lenders believe people can afford a second mortgage? 🙄
Piggy-Back loans were a disaster (2008!!)
This is the same first time home buyer program that my state offered like 7 years ago when I bought my house
VA mortgages / USDA / Naca/ never required a down payment and enjoy the lowest foreclosure rates .
I don't like risky finances. I am also predisposed to worry about the things Ms. Baker talks about. But this doesn't sound bad to me. First off I don't see many buyers qualifying for this add on loan, so causing widespread economic calamity is not going to be a side effect. But over time the value of houses increase and people pay down their loans so coming up with $15k at the time of sale shouldn't be hard. Problems will occur if people want to sell their house in a down market soon after buying it. But there shouldn't be a reward for that. The upside is young people can get into a house. As long as they stick within their means it is a win.
When will this happen
OMG it’s ALWAYS a problem when the little guy gets a break. Why don’t they question the exorbitant transaction costs with buying and selling a home?
Exactly. On a $300K house, greedy real estate person and their attorney grab a nice piece of cake worth $30,000 for doing nothing.
@@Aemolya Actually they grab more like 12K-18K
The little guy is NOT getting a break. It's making the monthly payments MUCH higher, and whoever writes the mortgage is getting MUCH more interest.
Balloon payments and not verifying income/ eligibility were the problem.
Rocket One program treated me well!
In my neighborhood, at 20% down your payment will be around $6k a month. No possible way someone 80 percent bellow median income can could afford a zero down mortgage which would be closer to $8k. Rent in the same neighborhood is only $3k. Seattle is really crazy.
The median household income in my city is 37k. People making less than 30k have no business buying a home. You couldn't even afford the property taxes, insurance and upkeep on that forget about a mortgage with PMI, this is insanity.
Watch “The Big Short”. Great movie about the last real estate crash .. this no down shim sham is giving me déjà vu vibes
We didn’t put anything down, but it’s a VA loan and our official appraisal was around $30,000 higher than the price we paid.
What if youre a first time homebuyer and youre looking to move to another state? Would you look into the new state's aid programs? Would they help those from another state?
I wanted a house for 300k i make 60k a year i have 30k cash they didn't like that . They said i need it in the bank not in my house. Let it season .i have no dept no monthly expenses im single live with my mom saving up. They said you don't make enough to buy that house the best i could get is 230k house . I got 750 credit ... bullshit i can afford that house 300k .
But you can rent it for 3k a month, no problems there😂
30k cash is only 10% down. If that's all the cash you have, you really can't afford the house. What about furniture and appliances? What happens when something goes wrong? How could you afford monthly payments, taxes, insurance, save for a rainy day, food, etc. on 60k? I don't think you've thought this through. They are right, you cannot afford that house.
@shellythompson3740 interesting, you're right. I make 4k a month at least, taxes included, and the payments are 2200 a month . I go off what zillow could be false i have a extra 17 k in the bank if something goes wrong. I was wrong . The truth hurts. I'll just live with my parents help out on their 50 acre ranch. I'm a little humbled now thanks Shelly you angle
I took a community college class on improving the speaking voice, the instructor was a speech specialist & opera singer. But that’s a side note. One of the other students, a retired realtor, ran a community program to teach & prepare prospective & new home owners about keeping a home - the work, repairs, maintenance, and replacements needed, how to do it to maintain their home & its value well, and budget for things like a new roof, etc. that a house will need at some point. The goal was to help people be successful home owners after they bought their home. Yard work, painting, cleaning, repairing, etc. etc.
it's amazing how much time and effort it takes to keep your home up, I'm retired and it's like a FT unpaid job many times
@@michaelsix9684 Yes. And thinking back, my parents both did the work. And as children, we helped where able. What’s that saying? Many hands make for light work. I wish I had paid better attention and learned more from my dad and mom to develop better skills. So I am learning now . . .
Doesn't really outweigh the risks
As someone who would be more than happy to buy a house for no down payment I do not want this, I will stick with saving up the 3% and paying my mortgage on schedule.
Me and my husband did a 0 down loan payment. The way it works is you get 5000 payment assistance. The payment is $52 monthly and as long as you don’t sell the house the loan is forgiven after 5 years.
Any hidden interest charges on that 15K principal at the end of the loan??
People have been predicting a repeat of 2008 for 6 years now and at this point I don't think we will see it any time soon.
If the buyer is not looking at their home as a stock exchange.... but as a home that they will be entertaining for 10+ years, does it matter if the main home is underwater? I keep exploring that people need to stop looking at the Zillow home value. It only matters if you are trying to refinance or sell the home, yes?
What can be expected for regular refi., I'm @3.5%?
Right now? You are looking at between 6.2 percent to almost 8 percent, it all depends on your bank and your credit, I wouldn't do it, plus paying on the fees!
It’s ok. Not all of them will default and it may be a lot of people’s only chance. We did the same thing and we are still in the same house and it’s worth triple of what it was.
Bubble goes POP!
And you can't rent out the home or short-sell the home unless that second loan paid off. When interest rates drop and you have equity in your home, pay it off then and buy a fixed rate.
I agree with you but the next wave of foreclosures are coming from the much higher property taxes and insurance. These will be comparable to what ARMs did to homebuyers 15 plus years ago. There will be more tax defaults than foreclosures this time.
Based on my observations, it is slightly more difficult to find a homeless person in San Francisco than to find a real estate agent no matter where you live.
Come to Austin .There is one real estate "agent" every 5 people.
AND they are so busy, that do not even bother to answer you, when you ask to see a house, priced less than 1MUS$.......
the problem with subprime loans is that they were adjustable. This one is 30 years fixed... so this loan can be good for the informed buyer, yes? What am I missing?
how about no doc loans?
2008 crash changed my life overnight…. I’ve seen it coming again for at least five years now…. It’s about to happen
So if I am at 615 score and am trying to get myself ready to purchase, would it make more sense for me to wait until the potential crisis?
gracias por compartir tu conocimiento con nosotros.
Without a reasonable correction (compared to the ridiculous price increases since the pandemic), people can't still afford housing even with these perk programs.
15k ... not sure that would cover closing costs.
Yes, single and double wide trailer and 10 acres to run around with your 🐕.
But if you are a buyer that intends to make it your lifetime home then you shouldn't care whether real estate prices go down.
Zero down is fine if you understand some of the restrictions that could happen. I wouldn't recommend zero down right now, due to over-value of homes and the instability of the mortgage rates. If you put zero down and your home value drops significantly over the next few years; you are going to be considered an underwater mortgage. You owe more than the value of the home; equals to no equity. Which restricts you from being able to refinance if the rates drop. This becomes even more critical if you didn't use a fixed loan, the rates adjusted (increased) after 1-3 years. You are not going to be able to refinance. By putting 20% down, gives you some equity and that buffer.
Is this the solution of struggling banks trying to make a profit to survive and get a bail out by the federal government when they are going under?
Sure hope not.
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If a buyer doesn't have any equity in the home they are purchasing, I would assume the PMI would be outrageously high, considering that home values may cool off and drop in the future
I hope a lot of people (especially younger people) see your video. I sold my house in 2006, everything was finalized, paperwork done and thank God it was because two weeks later everything went to Hell in a handbasket. If you can't afford to take the paperwork to a real estate attorney then you might want to rethink if you can even afford to buy a home, much less a 0% interest loan.
So 0% down means a higher monthly payments.
my first home I had a mortgage, second home was mortgage free due to cash purchase
A tent from Walmart, got it😅!
@@j.l.salayao8055 no it was home built in 78, first home was built in 1950 and 975 sq. ft, second home was 1700 sq. ft. price was 136K, over 12 yrs. done about 70K in repairs etc. for a long time Houston had good inventory and low prices, that is gone now
Ya think?
I have a colleague ready to jump on one with 50% of his income after taxes. Prices will skyrocket
200k/year is still not affordable to buy a house now in Bay Area because most houses are from $1.5 M to $2M. Too risky if lose the job or lose business. Most people can afford to live houses in Bay because they bought houses for a long time ago.
I refinanced my house in 2022 and now have equity, owning about 70% of my homes value. But, now I find out that if you finance via FHA then PMI NEVER COMES OFF!! (Sorry, not yelling just making a point) I wish I had known this before I refinanced with Mutual of Omaha. Do you know if there is anything I can do? It seems so unfair!!
Stacking loans - when did we see this before?
for the financially undisciplined this is a trap, for someone who is financially discipled but cash short, it's a massive lifeline. if the lender has real underwriting, it's a good product, if they are giving it out like candy, then it's a systemic risk. the one group that will not be happy is all those mortgage brokers who aren't offering a similar product. is it financially astute products, the second trust (down payment assistance) being non interest bearing is a huge boon.
It does sound risky, but I would think the lenders, having the benefit of the experience of 2008, can take steps to mitigate the risk. That said, I certainly disagree with the approach, as a “homeowner” should have some equity in the property. I think the ones taking the biggest risk are the buyers, not the lenders. Sounds like a recipe for future indentured servitude.
There suppose to be regulations to prevent this. So I don't think this will happen with regular mortgage lenders. No money down would be high risk so interest rate would be high.
The good news is we're having an economic recovery vs. 2008 when it was a recession.
Home.Activasion.