Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
I’m in Ohio and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quiet mediocre neighbourhoods. Then you’ve got Better, average sized homes in nicer neighbourhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Personally, I can connect to that. When I began working with a fiduciary financial counsellor, my advantages were certain. I got into the market early 2019 and the constant downtrends and losses discouraged me so I sold off, got back in Dec 2021 this time with guidance, Long story short, its been 2years now and I’ve gained over a million dollars following guidance from my investment adviser.
This is huge! think you can point me towards the direction of your advisor? been looking at advisory management myself.. seeking ways to invest and make more money with the uncertainty in the economy.
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Aileen Gertrude Tippy” for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.
I’ve been diligently working, saving and contributing towards financial freedom and paying off my high interest mortgage, but the economy so far since the pandemic has eaten away most of my portfolio, what I want to know is this: Do I keep contributing to my portfolio in these unstable markets or do I look into alternative sectors.
Yeah, financial advisors could make a lot of difference, particularly in a market such as this. Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are a lot of wealth transfer in this downtime if you know where to look. I have been using an FA since 2020, and I return at least $30k ROI, and this does not include capital gain.
For me, Diana Casteel Lynch turned out to be better and smarter than all the advisors I ever worked with till date, I’ve never met anyone with as much conviction.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
Did a 0% loan in 2002. Not an ideal situation, but back then if we saved 10k a year the same house was 10k more. Yes PMI sucked but we paid it off in 14 years. Had a mortgage of $900. That same apartment for $600 is now over $2,000 and our home is worth 3x what we paid for it.
Good timing! I saw somebody on TV talking about how anybody can make money if they try hard. When the host pressed her, the story was I bought a condo. The real estate market near me skyrocketed. I sold that and bought a house in a cheaper market and invested the rest and my stock turned into a million dollars. This video proves how many people had the opposite experience.
We purchase 0 down in 2017 Now worth almost 3x. We are planning to pay off in next 3 years. No car payments for past 10 years helps alot ! Drive 20yr old car and once home is paid for We can buy new rides and eat car payments
We bought our house with 3.5% down but it worked for us. Fortunately, my career was just growing, so at the time, our mortgage was like 40% of our income, but now it's around 12%. You have to weigh out your options before buying a home and factor where you are in your career, can you still save if you buy the home etc and always have an emergency fund when buying a home because things like to break!
Yes, so true. But it’s getting harder and harder to avoid them. I moved 40 miles outside the city just to get away from having an HOA. But heck, it’s so worth it!
HOA would make sense if they offer some general maintenance for a low price...the real problems are: 1) most probably they will increase the price for whatever they want 2) If you're looking for a condo like me it's quite hard to find one with No HOA at all.
I bought my house with an FHA loan in 2001. Zero down. Paid it off five years ago. It’s now worth almost 4 times what I paid for it. So it worked out for me. But those were different times back then.
Yep, we bought our house in Dallas in 2010, and back then, the government was also giving away thousands of dollars to 1st time hm buyers that didn't have to be paid back!!! It's now worth 3 times what we paid for it.....we'll never see that again!!! In 2023, we finally paid it off.
We used a USDA loan in 2020 before things went bonkers and cashed that house out two years later for a $125k profit and moved to a bigger house. It worked out for us as well. I think its more about timing. One size does not fit all.
Mortgage broker here! One thing I would take issue is that he implies that there are parallels to the financial crisis which is not true at all. Back then lenders were not verifying income or assets when giving out loans, hence why the system collapsed. Now income and assets are strictly regulated, foreclosure rates are near record lows as a result. The US has had an undersupply of housing for the last decade plus which is why home prices keep rising. It's ok to wait to buy a house but don't be under the impression that there is another mortgage crises ahead and you'll be able to scoop up some cheap houses.
I'm 33 and have been watching a ton of financial literacy / home ownership / retirement content the last few weeks. This video was a nice change of pace from the "spend 15m on this video thinking about the next 30 years" type of content. Great edits and the humor is much appreciated!
I am using mine to buy as we speak, but I belive he is talking about the predatory practices of lenders like them, we have the advantage with the VA loan due that we don't get penalized for not providing a down payment, the people who use conventional loans get penalized for no down and they tend to take on more than they can handle, the VA loan is the best thing for military.
There are many who purchased 0 down and later were foreclosed due to unforseen circumstances, job loss, repairs because they didn't make enough. Congratulations on your luck, but you wouldn't have been "screwed". Are you saying anyone who hasn't bought is "screwed"?
As a mortgage loan originator, who uses UWM, I have never recommended or sold a zero down conventional mortgage to a borrower. Not a good product. My clients are my livelihood, my name means more than a few extra bucks.
So all those people you discriminated against whose equity would be double and have a WAY lower payment than rent now don’t have a home cuz of your opinion and are paying ever increasing rent.
I’m also on the VA loan program. Bought in 2018 for 219,000 mortgage is 1200 but I pay the 1800 like I did for rent every month. We are now owe under 100,000 and we could list our home now for well over 350-400. Oh and I’m at 3.7%. It’s possible to buy a home 0 down but it takes discipline and sacrifice.
I'm hoping there will be a housing crisis so I can buy cheaply when I sell a few houses in 2025. As a backup plan, I've been thinking about purchasing stocks. What advice do you have for choosing the best buying time? On the one hand, I continue to read and see trading earnings of over $500k each week. On the other side, I keep hearing that the market is out of control and experiencing a dead cat bounce. Why does this happen?
You're not doing anything wrong; you simply lack the expertise necessary to make money in a bad market. In these difficult circumstances, only really skilled experts who witnessed the 2008 financial crisis can expect to generate a large wage.
Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
Sharon Ann Meny is the licensed advisor I use. Just search the name. You’d find her webpage and necessary details to work with to set up an appointment.
Yes I am fantasizing about homes I can't afford on Zillow, but they are by no means lavish as suggested by George. I look at tiny basic starter homes which are crazy expensive in today's economy.
Telling people to buy homes now is the reason we are in this mess. The worst financial mistake ANYONE can make besides getting married as a man is buying a home in a bad market. I am more than financially ready to buy a home. I can put 40% down on a 250k home. I make 3 to 4x median income for the area. With costs right now, if I bought a home, I'd lose a projected 5m in retirement because the cost to own is simply too high. This market is stupid. Either wait for the next home affordability thing to arise from the chaos and use that as a vehicle to true home ownership or rent
Money actually grow on trees but only on trees that was planted by you!! These tress are referred to as investments, How you diversify your investment portfolio matters.
My husband and I used a $10k grant to add to our down payment. We already planned to move after five years, enough time for the debt to be forgiven. We moved in less than 18 months. Luckily, we found a good area, put on a new roof, and made enough fixes in the house to cover paying the grant back. (When we moved in none of the door knobs matched, half of the ceiling fans were broken, and the carpet had holes in it). He's right about planning for the future. If your plan depends on everything going right, it's not a good plan.
I'm thankful I was able to buy our home $0 down in 2014. The responsibility for something I "owned" and starting a family finally got me to grow up; something not even the Army could do. It'll be 10 years this November, and we're Baby Step 4-6 and saving CASH for a Disney trip next year. We were desperate at the time, but here we are, literally living the dream!
VA loans are a bit different and I assume that's what you used and thank you for your service. They are probably one of the lowest cost 0 down loans out there because the VA assumes the risk... any disability rating and you even avoid the funding fee. Conventional 0 down loans like the one shown is this clip use creative and expensive risky financing to cover the part that would normally be a required down payment.
@@caseycooper2381 we weren't married at the time, so we couldn't use the VA loan. We used an FHA--an old house originally built in 1900, with a nice addition doubling it's size added in the 90s. We'd like a bigger kitchen, but everything suits our needs.
My husband and I used a no down payment VA mortgage twice. I am now a widow with a totally paid off house that has more than doubled in value since we bought it in July of 2008.
RIP to your husband and thank yall for your service🙏. I am also a veteran, my wife and I also used the VA home loan to purchase our 1st home. No regrets😎
@@TheFirstRealChewy Very true. After serving in the USCG for eight years, my husband had a very stable paycheck and a federal pension working for the government.
I had to deal with the FOMO of wanting to not rent for another year and jump into a house next summer ('25). But after speaking with the wife (AND LISTENEING LOL) I can relax and, yes rent and, save for another year to comfortably afford a 20% down payment by the time summer of '26 comes. Thank God for godly wives🙏🙏
Pretty cool, man. I have VA loan so I did zero down but that’s because I didn’t really have money to put down any. My wife and I agreed on atleast 10% down with our next purchase and then throw money from sale at the principal. Zero down when I don’t have money makes me feel broke and childish. Never again
@@cowboydestroy lol whatever you say man, God created math and everything knowable so sure 😁 mathly, godly, whatever your human brain can comprehend to understand what I’m saying 🙏🏾
I have a feeling you are newly married because you haven't learned yet that listening to the wife is always a mistake. You'll be pissed when you decide to keep waiting and home prices increase faster than you can save so you're in the same position or maybe even a worse position to buy later than you are now. So you'll decide to put it off and save longer and tell yourself you'll buy in 2027, or 2028 lol
@@BLdontM yup “newly” ish 3 years married 10 years together. But no it’s not a mistake to listen to your partner 🤣 are you a boomer?? LOLLLLL what is this comment section
@@Sincrow 3 years in you're still very much a rookie. It's ok, you'll learn when houses have gone up another 15% by 2026 and you're not in any better position to buy and wishing you ignored your wife and bought now or summer '25 as you originally planned.
I "bought" my house for essentially 0% down 11 years ago. In fact I got a cash back mortgage and I used the money to put a new roof and furnace into the house before we moved in. I am still living in the home and my current mortgage is much less then I would be paying for a small apartment in my city. I took a big chance and I came out better off then if I hadn't taken that chance. The first 5 years was tough as the interest rate was high because of the cash back, but I managed to get through it even though I was jobless for 3 months during that time. I had no help from family or friends. This would probably not be a good idea for everyone, I was just lucky.
I bought my first house with 3% down and it was a mistake. I had just graduated college and started making a decent salary. I listened to my parents who encouraged me to overspend and buy the most house I could afford. It worked out because I worked tons of paid overtime and had 2 roommates, but it easily could've gone South.
After college (2012) I had just gotten married.. I had some a not so great income wife was still in school.. I had some people telling me to buy the most expensive house I could afford… I went with my gut and got the best cheapest house I could find in a decent area. Found a townhouse for $86,500! Sold it like 5 years later for $125k and did about nothing to it.. That was the best decision I ever made.. that cheap mortgage made paying off our student loans far easier than other choices we could have made. It also allowed us to sock away money into retirement and pay for a car in cash (eventually our salaries went up)..
That's boomer advice. It's like saying to walk into a business and hand deliver your resume to the manager and shake his hand to get the job. Buying the most expensive you can get is bad, but stretching the budget a little has some logic to it - houses appreciate as a percentage, so your more expensive house appreciates more than a cheaper house in the same time, and being fresh out of school you'll likely be getting many raises in the coming years making that mortgage payment easier to handle. It can save the hassle and expense of wanting to upgrade from the cheap starter house after only a couple years.
@@BLdontM but the larger appreciating value doesn’t help you in the immediate when you might be trying to also pay off other debt… and or student loans.. But the 1st home that you think you could live in for the next 5 years.
@@sanchilandscapedesign6316 I would've bought what I could easily afford or wait until I could. I would only buy a place if I expected to live there 5 years or more. With a condo, make sure you understand all the fees and assessments.
Anything less than 6% down is basically negative downpayment, because if you have to sell immediately your costs are likely to be 6% or more (sales commission, adding in legal fees, etc.).
A gigantic amount of people are underwater on auto loans right now. I think the first blow up will be in the auto market well before the mortgage market.
We’ve used the zero down VA loan three times now. One of those we bought in 2020 and within two years it went up 100k and we made out really good when selling to move to another duty station. I disagree with this advice as a rule for all situations.
Given the current market conditions, I'm considering whether to liquidate my $338k stock portfolio or should I maintain my current equity allocation, or explore other options like reallocating to bonds, fixed-income investments, or even considering a mortgage for a potential real estate purchase?
There's definitely potential, but it's important to proceed with caution. That's why I recommend getting a financial advisor who can provide guidance on entry and exit points.
Having an investment advisor is the best approach to navigating the stock market right now. I used to rely on UA-cam videos, but it wasn’t yielding the results I wanted. Since connecting with an advisor, I’ve seen significant improvement-just last year, I achieved over 80% capital growth, excluding dividends.
'Rebecca Noblett Roberts' a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
I kept my down payment for the house and bought through a local credit Union with 0% down. I only did that in my circumstances because I knew the house was under priced. After the first year the house was appraised which gave me 43% equity I’m getting out of the mortgage ASAP before I’m 40. I wouldn’t recommend my path unless you know real estate as a business not a home.
No…in 2012 Navy Federal credit Union put us in a 0 down mortgage, even though we had 20%. We wanted our house, so we took it. 300K house is now worth 800 and we live in Downtown DC and our mortgage is $1500-2000 than the average rent in my neighborhood. Yeah we are paying PMI, but that’s going to removed because we have enough equity to buy our own house…. And we are 6 months ahead. And yes we have more than that saved.
I’m closing in on my retirement and I’d like to move from Minnesota to a warmer climate, but the prices on homes are stupidly ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%) do I just invest my spare cash into stock and wait for a housing crash or should I go ahead to buy a home anyways?
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
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.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
I appreciate the implementation of ideas and strategies that result to unmeasurable progress. Being heavily liquid, I'd rather not reinvent the wheel, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
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.
Apart from the obvious risk of the market falling/crashing and having zero equity, a lot of people go for first houses that are the next step up, ie over-buying. Buy humble, buy cheap, it does not have to be perfect, and very few people ever stay in their first home. So that first home purchase should be with a view of staying there only about 5 years, maybe 10. You can put up with things in the shorter term.
I dont disagree that for most people, it is best to save for a downpayment. But the 07 crash was not because loans were given at 0%. It was caused by giving loans to people - a lot of them fraudulently - without properly vetting their ability to pay it back. A good downpayment is one factor that proves ability to pay, but a 0% down loan to someone who makes $100k, has never missed a debt payment, has a long history of employment, etc. is less risky of a loan than to someone who puts 10% down but barely has the income to afford it, has a history of jobless periods, has a history of missed payments, etc. Good topic, poorly placed theme.
Disagree. If a person makes $100K annually but doesn't have a down payment for a house...not financially mature enough, in my opinion, to take on a mortgage. The whole point is to plan, which means delay immediate gratification.
@@bobbybrown870 I never said anything about whether that person making $100k annually should or should not buy a house. I was simply commenting on the cause of the 07 crisis. It wasn't the 0% down, it was the greed of lenders pushing people into loans who they knew couldn't afford the payments by fraudulently reporting their income or by giving them a low initial rate on a variable rate loan. In my first sentence I said that I don't disagree with the video that most people would be best served to have saved for a downpayment. I just disagreed that a lack of downpayment is what caused the crisis.
@@bobbybrown870 Having enough for a down payment plus a set aside for repairs and an emergency fund is not feasible for a large number of first timers. It's risky, but depending on circumstance it's a reasonable choice. Otherwise they'll probably be constantly priced out given home values.
@@thomasriehl4554 You do understand that a significant reason for skyrocketing home prices is demand which is increased by 0 down programs like this, right?
I was also shocked to see some of these offers going around again. Why is it happening? Because it was 25 years ago...most people looking to buy now were barely old enough to understand how to make change - let alone the state of the economy. That's how they can get away with it. Hey, many of the folks coming up with these schemes are in the same age group; how can they learn from history when they know little about it.
I think its not about the down payment, its that they are trying to loan to people that are unable to save the money. If they cant save it the issue is how will they pay it. Its awesome you pulled that off, but unfortunately YOU are exceptional and not the norm. Awesome you did that! Im doing a nothing down loan for my house, but its a VA loan so a bit different
I did the same in 2021 and locked in a crazy good interest rate. Rents in my area have already skyrocketed past the base cost of my house (mortgage/taxes/insurance), not to mention the already significant appreciation. If someone is already paying that amount in rent and is not overextending themselves, why not switch to something that allows building equity?
This is interesting because my credit union offered my husband and I a 0 down loan in 2022. 3.75% interest rate. We had to be really careful to make sure the home we found was WELL UNDER what we qualified for. We kept the 10k we had saved up invested in the stock market instead. We had things go wrong with it but were able to save more money in 2023 that built up a small emergency fund. I think it’s something to be super wary of going into and not to take lightly. We know we will only break even on our house if we sold today with all our other expenses. It’s definitely giving 2008 vibes again.
My first home was 0 down i was saving for 20% down but found out I could do 0 but it honestly worked out because it was the beginning of the boom and the value nearly doubled when i sold it 5 years later, used that to pay off my truck and put 20% down on new home, this was by pure luck i didn’t understand money then.
We bought our first home in 2017 on something similar to this. CalHFA. I was $200 out of pocket but had TWO additional loans. I think the difference was I didnt have to pay on the additional loans until the mortgage was done or we sold. Sounds like this new one youre paying on the additional loan at the start. What Im getting at is this isn't exactly new...that being said what happened in my case? Well fortunately it was a fixerupper. After some remodels including floors, paint, and an ikea kitchen we sold it in 2023 pocketing a good $125k when all was said and done. It worked out for us but we also chose very carefully what we were buying and put a lot of sweat into it. Doesnt mean it would work out the next time.
In my country there was one time like in 2015 onwards is 0% and even cashback like 10% to 30% where you can even cashout.....the house prices skyrocket due to the massive demand and now that the interest rates are up and demands are down and prices are down, they are still surviving....even if they sell now they are still positive. All boils down on how you manage your $...if u cant then definitely dont do it.
35 years ago I took out a 0% mortgage from the VA at 12% interest. Now I own that home Free and clear and rent it out. I live in another house that's nicer and also does not have a mortgage. Your advice might be good for some people, but it's not one-size-fits-all.
I did this in 2021. I am now in the position to buy my second home because of the equity I have in my first home. Rent is literally throwing money in the trash for a bed to sleep on. The "Save money for a down payment" worked for Grandpa when houses cost $30,000.00. If you want to own a home, you have to accept some amount of financial risk. He is making you think there is a way to buy a home without accepting any risk.
For reference, we bought a 172k condo and are now shopping for a 300k house while being in the position to pay off a substantial amount of credit card and auto debt. Is we had rented for this duration. We would be signing a new lease for more than what our mortgage will be on a 300k house. Be stuck paying thousands each month towards debt and have no progress towards paying off a mortgage.
You're also forgetting about the costs associated with selling a home (in NY, 7% of the sale price is commission paid by the seller) so she'd be even further behind
The rise in price of a typical home has negated any wage growth I've had over the past 15 years. So I'm not buying unless I can save up enough to buy cash to avoid 30 years of payments
At this point it feels on purpose that they get people to fail these loans so they can scoop up cheap housing. Part of me thinks they don't want a full on crash though. Just enough only they get access to cheap houses that failed their loans.
@drexelspivey872 This is true. But if you have a lot of people foreclose on their home because they can't afford the home, wouldn't that cause the demand to drop with a massive influx of homes going on the market from foreclosures?
@@crashtestdummy1972 let me correct my statement, I can only speak for where I live in which demand outweighs supply pretty incredibly. I just see people wishful thinking “oh I’ll wait out buying a home prices will go down” when in turn the opposite happens
@@drexelspivey872 Supply and demand is irrelevant when the participating parties don't have money to transact. Housing will collapse because people who can't afford to buy (i.e. those making less than 80% of the area median income) are going to purchase houses they can't afford. It's 2008 except, for some reason, they're making it more obvious. Now you HAVE TO under earn in order to qualify to get screwed over. In 2008, anyone could do it.
I am fortunate I made decisions that changed my finances for the better (acquired over 1M in 2years) through my financiaI planner. Got my 2nd house in July and hoping to retire nxt yr.
We got a 0% down mortgage but it's a VA loan where we didn't pay the fee due to my husband's disability rating. It actually has saved us money vs traditional. Plus our rate is only 3% We'll have to paid off much quicker. We've paid off 47% of our loan in less than 4 years. I'm happy about it
I get that this deal is different with the two loans being taken out, but I'm not necessarily against the idea of a 0 down payment. We used a VA home loan back in 1998 with a 0 down payment, and it's allowed us to invest money that would otherwise have been stuck in the house. The key is not buying a house outside your budget, which can be avoided with or without a down payment.
I’ve also used the 0% down VA loan a few times. Most recently in 2020. As long as you stay within budget you should be fine. Currently my mortgage, insurance, and taxes amount to 12% of my take home pay. This doesn’t include the extra Input towards my mortgage principle.
We used the 0% VA mortgage too and also have no PMI which is great. We do have savings, no other debt, and pay more on principle each month. We are in an area where rent cost is absolutely insane and it made no sense for us to rent. This can be a terrible option for those who aren't financially responsible or who are in a pinch but sometimes it does make sense.
Can you explain more about how much a monthly mortgage should be % of income. I’m worried about my aunt and uncle because he did the VA loan and now has a monthly mortgage of 3.2K and brings in 4.5K a month from disability… so I’m trying to learn more about this because they didn’t have a down payment and I’m worried. And the interests are so high their 350K house will be paid off once they paid 1.2 million over lifetime (which will be never) and they got promised that the monthly mortgage will lower over time with interest rates…Any advice helps. I’m just trying to learn
Scared me for a second. I'm a huge fan of $0 down VA loans, but this is not at all the same. For VA loans you are mortgaging 100%, but you only pay standard mortgage payments and can get in and out without being automatically in the hole. This requires a second 3% loan and PMI on the mortgage. Absolutely crazy.
My first house was on a low down-payment program; the math made sense, BUT only because rents in my area at the time were double what mortgages on the same property would be. (The magic of a town with a large temporary population.) Even with mortgage insurance, buying gave me breathing room that renting didn’t. In retrospect, it was a good decision.
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. 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 80s 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.
Thank you for saving me hours of back and forth investigation into the markets. I simply copied and pasted her full name into my browser, and her website came up first in search results. She looks flawless.
You wait for a correction or you rent for the rest of your life like the rest of us. There's no way houses are going to continue to go up in perpetuity. They are unaffordable as is.
My first house was a zero down VA mortgage, it worked for us luckily, our area was fast growing and our house went up in value very quickly, we sold it 5 years later for almost double and put almost 30% down on our next mortgage
If you want to do this loan, buy a duplex. You can depreciate half of your home, and the income generation is passive income. You can pay extra payments (don't have to) from the income you are receiving. But your payments will be less because of rent collected. Being a landlord is work, and risky. But a very doable situation if you need a no down payment house.
What about a VA loan with 0 down? That's what i did, but i also got 30k in incentives from the builder and put 300 extra a month to principle(with planned increases as time goes on). But i guess that's where the financially stable/smart part comes in. So 0% down is not always bad, at least imo. For sure, though , this loan type in the video is horrible.
This hit close to home. Prior to living on a budget, in 2018 we got a mortgage with UWM with only about $4000 down. I don't remember there being the 15,000 loan on top but we did have to pay PMI. We have since refinanced while house prices were crazy during covid to get rid of the PMI, lower it from 30 to 20 years and started budgeting. This "worked" for us but I would not count on or recommend it looking back.
I think there are other programs out there that are different. We bought our house in 1994 with Zero down payment with a interest rate 9.5% which was a little high at that time but still it was affordable, we had $250.00 in debt when we bought. It is now paid in full. Anna In Ohio
Whats scarier is suggesting renting something in which you will never own and help the landlord build equity as a better suggestion. Stretching your DTI is far worse of a threat than your down-payment presuming you intend to live in the property at least 5 years. Renting imo is a short term bridge while you prepare for homeownership not something to do forever
And if you’re never ready, financially? Whether you rent for 2yrs or 20, if you’re not financially ready, you’re not ready. You may be helping someone else, the landlord, BUT you’re keeping yourself out of financial trouble
@marcedwards7110 there will always be individuals who are never ready but I'm presuming those who are watching this show at least have the bare minimum required to move to with a little guidance
I did get 100% loan once around 2016 but it wasn't as described. It was through my credit union, who had a higher than average interest rate at the time, but the CU loan did not require PMI at the time we'd pay more for the other loan with PMI we qualified for even with a down payment (3-5% I can't remember). That said, I still don't think it was a great move by any means, but I've learned a lot since then and wish I could bring that knowledge back in time!
I put the minimum on my house but then again the mortgage amount equaled rent and according to mortgage pre approval, i bought half the house i could afford and it worked out very well. Rent is crazy now. If you can get mortgage less than your rent with a house with no major problems and not in a flood zone, it could work
I got a zero down mortgage from the VA in 2009 after the crash you mention at 6.5 percent 2 years later refinanced at 3 percent for 15 years, now paid for and our home is worth 3.5 times what we paid. This is an interesting take on zero down mortgages. But not the same as what happened in 2008, guidelines are in place to make sure people have the income. There is an IRS form that has to be filled out for IRS to verify income. Also no way I would tell someone to rent for the rest of their life. Bad advise cause rent never goes down, ever! Also liked the way you plugged in your affiliate links in the video.
The Ramsey team also actively preach against using VA loans, hope you aren't surprised. Ive used VA loans multiple times, and am in a fantastic position. A lot of principles are good, but I think they've missed the mark completely on VA loans.
Can't argue with any of this. We got a zero down loan in 2003 but did pay some earnest money up front (Pick a pan, pick a lot). Refinanced twice. Stuck with an FHA loan right now with PMI but we're at 3% so not much we can do about it. Looking forward to paying it off early.
So glad i actually did mortgages for a bit before ever buying a house cause it killed any temptation i might have to buy before I'm ready. I might not wait to have 20% down, but I'd really like to have at least 10%. And with the difference between rent & mortgage payments, i do need to raise my income some but I'm so much closer than I've ever been. I see it as totally possible.
Our first home we put 3% down. However, this was a classic starter home and quite affordable. we had a fix 30 year but for about 10 years we were on the edge financially. While its true the home appreciated, we paid for that with emotional stress. We sold that home and upgraded a little bit and put 25% down on a 15 year fixed paid it off in 12 years. I'm mid 60s still in the workforce and very few of my co-workers have paid for homes. The problem is first buying too much home the second is IF the market goes south and/or if the home buyer loses income and is on the edge financially the same thing that happened in 2008 could happen again that is people underwater and just walking away for the home. I personally know two couples that this happened to so it's not fiction. Today I thinks it's worse because many Americans have a ton of other debt.
Happened to my brother he bought in 2008. He didn't learn much bc he moved but took another mortgage. He won't sacrifice his lifestyle so he will have to work longer but that's his choice
The 2008 crash wasn't just isolated terrible mortgage lending by 1 opportunistic company. It was a massive collapse because (a) banks were bundling these terrible loans together as an investment opportunity and selling them on the market to institutional investers like pension funds and (b) because the bank could make so much in fees on the sale of this "investment" they were heavily incentivised to increase the volume of loans whether or not the loans were any good. A single business going big into sub-prime won't hurt anything, unless they can create a market for the resale of crappy loans owned by broke people.
The big problem with sub prime loans was that the loans were repackaged and sold as mortgage backed securities, rated as AAA investments despite the high default risk. Basically securities fraud. It was even more fraudulent as the loans were often stuffed into securities after the securitization date, which is illegal and fraud.
08 was more about garbage loans and tons of horrible lenders, giving these people adjustable interest rates that included balloon payments. If that predatory practice isn't happening in this 100%, it shouldn't turn out any worse than any mortgage with a PMI. 🤷🏾♀️
It's basically non-government funded down-payment assistance. We used a Down payment assistance program in 2018 to buy our first home with approx 5k out of pocket total. We definitely were overbudget and naive at the time, but it was a great investment and we made 120k in less than 3 years on it, which allowed us to relocate back to our homestate of WA where homes are much more expensive and we could roll that equity into a "proper" down payment towards our 2nd home purchase. It's not perfect, but I think the less barriers to homeownership there are without putting people at such risk like 2008, it's not that bad terrible of an idea. They've changed so many regulations with lenders so that 2008 can never happen again. But also being housepoor is absolutely terrible and I would never wish that upon anyone. So if you truly cannot afford to buy and maintain a home, just rent.
So, I did this 2 years ago.... 10K no interest downpayment loan that is attached to my mortgage. We had the money in savings.. still do... but with the pandemic and everything it seemed like a better idea to not wipe out savings for a down payment. The good news is I plan on staying in the home for the next 10 years.. but how can I get rid of the the no interest 10k down payment loan? Can i start paying separately on it? Refi it if rates ever drop? How would you deal with it at this point?
we bought our house with 3 percent down, but we have an interest rate less then 3% and our has trippled in value. So it can work out well. we have increased our income, so the percentage of our budget is less of our total income, and our mortgage is cheeper per month then renting a studio in our area, so it can be a good investment for some scenerios.
I’ve purchased every home I’ve ever owned with zero down sans one using VA loans. How has it worked out for me? I’m a millionaire now and I’ve never made more than $60000 a year in my life. I must admit, I’ve never had to pay PMI because it’s a VA loan.
If the $15k convinces you to buy the house, think again. You can easily spend that on maintenance and repairs and getting the house set up to function for you in year one. And every year thereafter.
We actually did this for our first home in 2013. Our rates were 2.75 for the down payment loan and 3 for the main mortgage. Our down payment loan will be paid in 10 years so our monthly mortgage payment will go down. Luckily our home is worth a lot more due to renovations and market value. This strategy worked for us while we were young and looking to start a family in a good town. I can see how it might be a blessing and a curse depending on situations right now.
I just bought my place with the VA home loan. And I had the seller cover my closing…. Yay for me, it really was zero down but I didn’t have that big caveat. That’s how you buy a house while on baby step 2 😅 But my monthly mortgage is $400 less than the average rent in this town, so I think I’m winning
You’ll likely be covering those closing costs when you’re the seller. Pray that your personal circumstances don’t change between now and when you have enough equity into the home, likely in 10 years time due to the way amortization schedules work. Likely before then you’ll find out that owning a home also comes with owning the problems. Things break. Water lines develop leaks, septic tanks deteriorate, trees fall, and infestations occur, all of which will cost you money. Welcome to home ownership!
@@wan3416 I have used some of my savings to have professionals redo the carpet and the upstairs water fixtures. I have increased the value with the work I put into it, and also, neighboring properties (identical floor plans and same HOA) have appreciated about 15k-20k in the last 6 months since I bought the place I know that if I needed to sell, I would probably only break even after realtor fees. But also, I have a very high income for this region and I bought the smallest house I could get away with. I know I should have bought it cash (I don’t have the cash) or on a 15-year mortgage (a 15y mortgage would eat up all the extra money I’m putting towards paying off debt) but in my situation I needed a place to live and my monthly payments including HOA are cheaper than renting. It’s not ideal but I only just discovered the Ramsy plan lol
@@wan3416depends on state and standard practice. If state allows it you can ask the buyer to cover but I highly doubt that will become the normal with the current market trend
He could pay extra as if he were renting. That’s what me and my partner have been doing and we turned our 30 year into a 21 year in only 2.5 years by being diligent.
George didn't answer the burning question in my mind. If Josephine has to sell the house and immediately pay the 3% interest free loan, does UWM get first priority to foreclose over the other bank that loaned her the other 97%? Or does UWM just get lots of fees up front?
This isn’t really a issue if they keep a 40% dti … plus as someone that seen these loans done the buyer strill coming to the table with cash for closing cost. This is normal a cheaper option than renting in month cost too. So with out putting things in that perspective is disingenuous. I have more clients living pay check to pay check renting and being Put in a bad spot by increasing rents. You have a better change of your rent going up over your month cost on a home you bought.
But you must also advise your clientes to plan ahead for emergencies he spoke of . I had a beach cottage on the NC shore when I was young got bit by a lyme tick and lost my job and lost everything. I'm buying again now but can't afford the same area anymore
we bought with 3.5% down back in 2016, but we were also deep into the process of being debt free - and we paid the house off in 4 years. So as long as you have a plan and are able to see it through, I don't see the problem.
I expect a 30%-50% temporary decline in house prices. I know this is going against the Ramsey opinion. But we’re facing deflation and a decrease of money velocity, due to incoming depression. It’s not gloom and doom but a normal correction in the business cycle to eliminate malinvestments. Look at commercial real estate - the banks will be forced to liquidate massively depreciated assets in their portfolio to stay liquid. Residential market will follow. The good deals are coming and no, you shouldn’t buy a house right now. But everyone has an opinion ❤
When your rent is so high you can't save for a downpayment... this is the way to go. Make sure the mortgage payment is about 15-25% lower than the rent you are paying now. So you have some room to save for emergencyfund/payoff the loan/mortgage. In the Netherlands its common (zero down) Not to long ago it was also common to finance the extra costs of purchasing a house. A mortgage up to 110% of the houseprice.... Rent is often very high here. Purchasing a house in this way is cheaper then renting most of the time. (in the netherlands) Its risky ... when you loose you're job etc etc. But you also have to pay rent when you're out of a job.
What are your thoughts on the WA State Home Advantage down payment assistance loan program? BUT buying a new construction home. They say it’s 0% interest and if you refinance you don’t have to pay off the 2nd mortgage, it all rolls into one. Also if you sell whatever you make you have to then pay off the second mortgage. Or at the end of the 30 years if you stay in the home the whole time.
The assumption that buyers do not think about these scenarios is a little ridiculous. Taking advantage of 0 down loans does not also means buyers do not have the down payment, some are talking advantage of the 0% interest rate. It is also incorrect to think the buyers taking advantage of these loans are low income. Most of the buyers that took advantage of this program make o over 170k. This is one of the reasons it was discontinued.
Not a fair representation. I bought my first house at 25 with a zero down program. Stipulations are I can’t sell or refinance as mentioned in video BUT that’s only for the first 3 years. That 3 years ends November 2025 at which point the down payment loan is entirely forgiven. I was willing to bet I’d be fine for 3 years and I’ve been more than fine and actually bought a second house 5mo ago and now have a rental property.
I unfortunately have to find a place to live..I'm 60..and only have 5yrs before retirement..I was hoping to not have to purchase anything til I did retire..was planning on traveling for the rest of my life..but life throws some big curves..so..I am torn with looking for a home or renting for the next five years..ugh..George can you help with advice
Sorry George but I don't agree with you on this one. Our first mortgage was through UWM on an USDA loan @ 2.75% for a townhouse back the beginning of 2020 (before things shot up), We managed to sell that house for a 125k profit. Not saying that would work today, but I would say timing is key when making these decisions. And if people buy with the intention of staying for a long time then does it really make that big of a difference? Also at that time for perspective, I paid $1100 for rent on a 900sq ft 2 bedroom apartment. My mortgage for an 1800 sqft townhouse with a garage was $1200. In some cases it is worth it. I wouldn't do that right now but as stated above. Timing is key. And do your point of what can go wrong.. IF you are following the baby steps with the exception of a mortgage then you should be just fine.
Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
I will be happy getting assistance and glad to get the help of one, but just how can one spot a reputable one?
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I’m fine with the higher mortgage rates, but we cant afford a $500,000 spec house with a 7% interest. Hoping the home prices come down.
I’m in Ohio and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quiet mediocre neighbourhoods. Then you’ve got Better, average sized homes in nicer neighbourhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.
Home prices will come down eventually, but for now; get your money (as much as you can) out of the housing market and get into the financial markets or gold. The new mortgage rates are crazy, add to that the recession and the fact that mortgage guidelines are getting more difficult. Home prices will need to fall by a minimum of 40% (more like 50%) before the market normalizes.If you are in cross roads or need sincere advise on the best moves to take now its best you seek an independent advisor who knows about the financial markets.
Personally, I can connect to that. When I began working with a fiduciary financial counsellor, my advantages were certain. I got into the market early 2019 and the constant downtrends and losses discouraged me so I sold off, got back in Dec 2021 this time with guidance, Long story short, its been 2years now and I’ve gained over a million dollars following guidance from my investment adviser.
This is huge! think you can point me towards the direction of your advisor? been looking at advisory management myself.. seeking ways to invest and make more money with the uncertainty in the economy.
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Aileen Gertrude Tippy” for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
I’ve been diligently working, saving and contributing towards financial freedom and paying off my high interest mortgage, but the economy so far since the pandemic has eaten away most of my portfolio, what I want to know is this: Do I keep contributing to my portfolio in these unstable markets or do I look into alternative sectors.
Just try to diversify your portfolio to other market sectors, that way your investment is balanced and you don’t get to make so much losses.
Yeah, financial advisors could make a lot of difference, particularly in a market such as this. Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are a lot of wealth transfer in this downtime if you know where to look. I have been using an FA since 2020, and I return at least $30k ROI, and this does not include capital gain.
Would you mind telling me how to contact this specific coach using their service? You seem to have the solution, as opposed to the rest of us.
For me, Diana Casteel Lynch turned out to be better and smarter than all the advisors I ever worked with till date, I’ve never met anyone with as much conviction.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
Did a 0% loan in 2002. Not an ideal situation, but back then if we saved 10k a year the same house was 10k more. Yes PMI sucked but we paid it off in 14 years. Had a mortgage of $900. That same apartment for $600 is now over $2,000 and our home is worth 3x what we paid for it.
Did you account for inflation?
Good timing!
I saw somebody on TV talking about how anybody can make money if they try hard.
When the host pressed her, the story was
I bought a condo. The real estate market near me skyrocketed.
I sold that and bought a house in a cheaper market and invested the rest and my stock turned into a million dollars.
This video proves how many people had the opposite experience.
We purchase 0 down in 2017
Now worth almost 3x.
We are planning to pay off in next 3 years. No car payments for past 10 years helps alot !
Drive 20yr old car and once home is paid for We can buy new rides and eat car payments
We bought our house with 3.5% down but it worked for us. Fortunately, my career was just growing, so at the time, our mortgage was like 40% of our income, but now it's around 12%. You have to weigh out your options before buying a home and factor where you are in your career, can you still save if you buy the home etc and always have an emergency fund when buying a home because things like to break!
You’re more the exception than the rule though!
Don’t move into a house/neighborhood where you have to pay HOA fees
Yes, so true. But it’s getting harder and harder to avoid them. I moved 40 miles outside the city just to get away from having an HOA. But heck, it’s so worth it!
I would rather live in a tent than an hoa.
@@Dbb27I'd rather live anywhere than to pay rent forever!
HOA would make sense if they offer some general maintenance for a low price...the real problems are: 1) most probably they will increase the price for whatever they want 2) If you're looking for a condo like me it's quite hard to find one with No HOA at all.
I bought my house with an FHA loan in 2001. Zero down. Paid it off five years ago. It’s now worth almost 4 times what I paid for it. So it worked out for me. But those were different times back then.
Same. We bought with a Rural Home Loan in 2010 with no down payment. We're still paying, but we lucked out buying at the bottom of the market.
Yep, we bought our house in Dallas in 2010, and back then, the government was also giving away thousands of dollars to 1st time hm buyers that didn't have to be paid back!!! It's now worth 3 times what we paid for it.....we'll never see that again!!! In 2023, we finally paid it off.
We used a USDA loan in 2020 before things went bonkers and cashed that house out two years later for a $125k profit and moved to a bigger house. It worked out for us as well. I think its more about timing. One size does not fit all.
Mortgage broker here! One thing I would take issue is that he implies that there are parallels to the financial crisis which is not true at all. Back then lenders were not verifying income or assets when giving out loans, hence why the system collapsed. Now income and assets are strictly regulated, foreclosure rates are near record lows as a result. The US has had an undersupply of housing for the last decade plus which is why home prices keep rising. It's ok to wait to buy a house but don't be under the impression that there is another mortgage crises ahead and you'll be able to scoop up some cheap houses.
The video is wildly off base in many regards
Yep
I'm 33 and have been watching a ton of financial literacy / home ownership / retirement content the last few weeks.
This video was a nice change of pace from the "spend 15m on this video thinking about the next 30 years" type of content.
Great edits and the humor is much appreciated!
I had zero down on a VA loan. I bought my house for 245k. VA loans have no PMI. If I had waited a listened to him I would have been screwed.
I am using mine to buy as we speak, but I belive he is talking about the predatory practices of lenders like them, we have the advantage with the VA loan due that we don't get penalized for not providing a down payment, the people who use conventional loans get penalized for no down and they tend to take on more than they can handle, the VA loan is the best thing for military.
And you are educated about these things. Some people don't understand the risk
There are many who purchased 0 down and later were foreclosed due to unforseen circumstances, job loss, repairs because they didn't make enough. Congratulations on your luck, but you wouldn't have been "screwed". Are you saying anyone who hasn't bought is "screwed"?
VA loans have a PMI. Not paid monthly but in a lump sum of 4% built into the loan. Unless that has changed
As a mortgage loan originator, who uses UWM, I have never recommended or sold a zero down conventional mortgage to a borrower. Not a good product. My clients are my livelihood, my name means more than a few extra bucks.
They should all be like you
I always preached to my agents when I had a company to take good care of their customers and their commissions would take care of themselves.
So all those people you discriminated against whose equity would be double and have a WAY lower payment than rent now don’t have a home cuz of your opinion and are paying ever increasing rent.
@@TexasMortgageBroker because he never sold that product doesn’t mean they didn’t buy. You’re making assumptions.
Glad we didn't wait. We got VA 0% down in 2021 and our home value went from 390k to 508k. Our rate is 2.37%
I’m also on the VA loan program. Bought in 2018 for 219,000 mortgage is 1200 but I pay the 1800 like I did for rent every month. We are now owe under 100,000 and we could list our home now for well over 350-400. Oh and I’m at 3.7%. It’s possible to buy a home 0 down but it takes discipline and sacrifice.
I'm hoping there will be a housing crisis so I can buy cheaply when I sell a few houses in 2025. As a backup plan, I've been thinking about purchasing stocks. What advice do you have for choosing the best buying time? On the one hand, I continue to read and see trading earnings of over $500k each week. On the other side, I keep hearing that the market is out of control and experiencing a dead cat bounce. Why does this happen?
You're not doing anything wrong; you simply lack the expertise necessary to make money in a bad market. In these difficult circumstances, only really skilled experts who witnessed the 2008 financial crisis can expect to generate a large wage.
Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
Sharon Ann Meny is the licensed advisor I use. Just search the name. You’d find her webpage and necessary details to work with to set up an appointment.
Thank you for the recommendation. I'll send her an email, and I hope I'm able to reach her.
Yes I am fantasizing about homes I can't afford on Zillow, but they are by no means lavish as suggested by George. I look at tiny basic starter homes which are crazy expensive in today's economy.
You can't even find a house for under 150k unless it's a dump
Telling people to buy homes now is the reason we are in this mess. The worst financial mistake ANYONE can make besides getting married as a man is buying a home in a bad market.
I am more than financially ready to buy a home. I can put 40% down on a 250k home. I make 3 to 4x median income for the area. With costs right now, if I bought a home, I'd lose a projected 5m in retirement because the cost to own is simply too high. This market is stupid. Either wait for the next home affordability thing to arise from the chaos and use that as a vehicle to true home ownership or rent
I'm assuming then you're invested mostly in stocks ? But are there any other types of assets you are investing into?
Money actually grow on trees but only on trees that was planted by you!! These tress are referred to as investments, How you diversify your investment portfolio matters.
The BIGGEST LIE You've Been Told About Money is that it doesn't grow on TREES!! 😆
I've searched for financial advisers online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation??
Wow, her track record looks really good from what I found online. I'll take a chance and see how it goes. Thanks for the info
My husband and I used a $10k grant to add to our down payment. We already planned to move after five years, enough time for the debt to be forgiven. We moved in less than 18 months. Luckily, we found a good area, put on a new roof, and made enough fixes in the house to cover paying the grant back. (When we moved in none of the door knobs matched, half of the ceiling fans were broken, and the carpet had holes in it). He's right about planning for the future. If your plan depends on everything going right, it's not a good plan.
I'm thankful I was able to buy our home $0 down in 2014. The responsibility for something I "owned" and starting a family finally got me to grow up; something not even the Army could do. It'll be 10 years this November, and we're Baby Step 4-6 and saving CASH for a Disney trip next year. We were desperate at the time, but here we are, literally living the dream!
It’s absolutely fine to do as long as you’re fiscally responsible. And I’m sure you have tons of equity in your house now.
VA loans are a bit different and I assume that's what you used and thank you for your service. They are probably one of the lowest cost 0 down loans out there because the VA assumes the risk... any disability rating and you even avoid the funding fee. Conventional 0 down loans like the one shown is this clip use creative and expensive risky financing to cover the part that would normally be a required down payment.
Disney isn't the dream though
@@georgewagner7787 you're right; the dream is owning a home!
@@caseycooper2381 we weren't married at the time, so we couldn't use the VA loan. We used an FHA--an old house originally built in 1900, with a nice addition doubling it's size added in the 90s. We'd like a bigger kitchen, but everything suits our needs.
My husband and I used a no down payment VA mortgage twice. I am now a widow with a totally paid off house that has more than doubled in value since we bought it in July of 2008.
RIP to your husband and thank yall for your service🙏. I am also a veteran, my wife and I also used the VA home loan to purchase our 1st home. No regrets😎
It can work as long as you can make the payments. However, you shouldn't do it without understanding and accepting the risks.
@@TheFirstRealChewy Very true. After serving in the USCG for eight years, my husband had a very stable paycheck and a federal pension working for the government.
Congratulations for winning your game of Russian Roulette.
Just because it worked once doesn’t make it a smart move.
@@wan3416it has worked for thousands of vets for 80 years…
I had to deal with the FOMO of wanting to not rent for another year and jump into a house next summer ('25). But after speaking with the wife (AND LISTENEING LOL) I can relax and, yes rent and, save for another year to comfortably afford a 20% down payment by the time summer of '26 comes. Thank God for godly wives🙏🙏
Pretty cool, man. I have VA loan so I did zero down but that’s because I didn’t really have money to put down any. My wife and I agreed on atleast 10% down with our next purchase and then throw money from sale at the principal.
Zero down when I don’t have money makes me feel broke and childish. Never again
@@cowboydestroy lol whatever you say man, God created math and everything knowable so sure 😁 mathly, godly, whatever your human brain can comprehend to understand what I’m saying 🙏🏾
I have a feeling you are newly married because you haven't learned yet that listening to the wife is always a mistake. You'll be pissed when you decide to keep waiting and home prices increase faster than you can save so you're in the same position or maybe even a worse position to buy later than you are now. So you'll decide to put it off and save longer and tell yourself you'll buy in 2027, or 2028 lol
@@BLdontM yup “newly” ish 3 years married 10 years together. But no it’s not a mistake to listen to your partner 🤣 are you a boomer?? LOLLLLL what is this comment section
@@Sincrow 3 years in you're still very much a rookie. It's ok, you'll learn when houses have gone up another 15% by 2026 and you're not in any better position to buy and wishing you ignored your wife and bought now or summer '25 as you originally planned.
I "bought" my house for essentially 0% down 11 years ago. In fact I got a cash back mortgage and I used the money to put a new roof and furnace into the house before we moved in.
I am still living in the home and my current mortgage is much less then I would be paying for a small apartment in my city. I took a big chance and I came out better off then if I hadn't taken that chance. The first 5 years was tough as the interest rate was high because of the cash back, but I managed to get through it even though I was jobless for 3 months during that time. I had no help from family or friends. This would probably not be a good idea for everyone, I was just lucky.
I bought my first house with 3% down and it was a mistake. I had just graduated college and started making a decent salary.
I listened to my parents who encouraged me to overspend and buy the most house I could afford.
It worked out because I worked tons of paid overtime and had 2 roommates, but it easily could've gone South.
After college (2012) I had just gotten married.. I had some a not so great income wife was still in school..
I had some people telling me to buy the most expensive house I could afford…
I went with my gut and got the best cheapest house I could find in a decent area.
Found a townhouse for $86,500! Sold it like 5 years later for $125k and did about nothing to it..
That was the best decision I ever made.. that cheap mortgage made paying off our student loans far easier than other choices we could have made.
It also allowed us to sock away money into retirement and pay for a car in cash (eventually our salaries went up)..
That's boomer advice. It's like saying to walk into a business and hand deliver your resume to the manager and shake his hand to get the job. Buying the most expensive you can get is bad, but stretching the budget a little has some logic to it - houses appreciate as a percentage, so your more expensive house appreciates more than a cheaper house in the same time, and being fresh out of school you'll likely be getting many raises in the coming years making that mortgage payment easier to handle. It can save the hassle and expense of wanting to upgrade from the cheap starter house after only a couple years.
@@BLdontM but the larger appreciating value doesn’t help you in the immediate when you might be trying to also pay off other debt… and or student loans..
But the 1st home that you think you could live in for the next 5 years.
Would you have bought a condo / apartment instead? I’m having trouble finding out what to do
@@sanchilandscapedesign6316 I would've bought what I could easily afford or wait until I could. I would only buy a place if I expected to live there 5 years or more.
With a condo, make sure you understand all the fees and assessments.
Anything less than 6% down is basically negative downpayment, because if you have to sell immediately your costs are likely to be 6% or more (sales commission, adding in legal fees, etc.).
A gigantic amount of people are underwater on auto loans right now. I think the first blow up will be in the auto market well before the mortgage market.
Never borrow for a car. Just get 4 wheels that run
We’ve used the zero down VA loan three times now. One of those we bought in 2020 and within two years it went up 100k and we made out really good when selling to move to another duty station. I disagree with this advice as a rule for all situations.
Given the current market conditions, I'm considering whether to liquidate my $338k stock portfolio or should I maintain my current equity allocation, or explore other options like reallocating to bonds, fixed-income investments, or even considering a mortgage for a potential real estate purchase?
There's definitely potential, but it's important to proceed with caution. That's why I recommend getting a financial advisor who can provide guidance on entry and exit points.
Having an investment advisor is the best approach to navigating the stock market right now. I used to rely on UA-cam videos, but it wasn’t yielding the results I wanted. Since connecting with an advisor, I’ve seen significant improvement-just last year, I achieved over 80% capital growth, excluding dividends.
I've been thinking about getting an advisor myself but have been a bit laid back about it. Could you recommend yours? I'd appreciate the help.
'Rebecca Noblett Roberts' a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
I just Googled her name and her website came up right away. It looks interesting so far. I sent her an email and i hope she responds soon. Thanks
I kept my down payment for the house and bought through a local credit Union with 0% down. I only did that in my circumstances because I knew the house was under priced. After the first year the house was appraised which gave me 43% equity I’m getting out of the mortgage ASAP before I’m 40. I wouldn’t recommend my path unless you know real estate as a business not a home.
No…in 2012 Navy Federal credit Union put us in a 0 down mortgage, even though we had 20%. We wanted our house, so we took it. 300K house is now worth 800 and we live in Downtown DC and our mortgage is $1500-2000 than the average rent in my neighborhood. Yeah we are paying PMI, but that’s going to removed because we have enough equity to buy our own house…. And we are 6 months ahead. And yes we have more than that saved.
I’m closing in on my retirement and I’d like to move from Minnesota to a warmer climate, but the prices on homes are stupidly ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%) do I just invest my spare cash into stock and wait for a housing crash or should I go ahead to buy a home anyways?
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
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.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
I appreciate the implementation of ideas and strategies that result to unmeasurable progress. Being heavily liquid, I'd rather not reinvent the wheel, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
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.
Apart from the obvious risk of the market falling/crashing and having zero equity, a lot of people go for first houses that are the next step up, ie over-buying. Buy humble, buy cheap, it does not have to be perfect, and very few people ever stay in their first home. So that first home purchase should be with a view of staying there only about 5 years, maybe 10. You can put up with things in the shorter term.
I dont disagree that for most people, it is best to save for a downpayment. But the 07 crash was not because loans were given at 0%. It was caused by giving loans to people - a lot of them fraudulently - without properly vetting their ability to pay it back. A good downpayment is one factor that proves ability to pay, but a 0% down loan to someone who makes $100k, has never missed a debt payment, has a long history of employment, etc. is less risky of a loan than to someone who puts 10% down but barely has the income to afford it, has a history of jobless periods, has a history of missed payments, etc.
Good topic, poorly placed theme.
Disagree. If a person makes $100K annually but doesn't have a down payment for a house...not financially mature enough, in my opinion, to take on a mortgage. The whole point is to plan, which means delay immediate gratification.
@@bobbybrown870 I never said anything about whether that person making $100k annually should or should not buy a house. I was simply commenting on the cause of the 07 crisis. It wasn't the 0% down, it was the greed of lenders pushing people into loans who they knew couldn't afford the payments by fraudulently reporting their income or by giving them a low initial rate on a variable rate loan.
In my first sentence I said that I don't disagree with the video that most people would be best served to have saved for a downpayment. I just disagreed that a lack of downpayment is what caused the crisis.
@bobbybrown870 not unless they just started making 100k.
@@bobbybrown870 Having enough for a down payment plus a set aside for repairs and an emergency fund is not feasible for a large number of first timers. It's risky, but depending on circumstance it's a reasonable choice. Otherwise they'll probably be constantly priced out given home values.
@@thomasriehl4554 You do understand that a significant reason for skyrocketing home prices is demand which is increased by 0 down programs like this, right?
I was also shocked to see some of these offers going around again. Why is it happening? Because it was 25 years ago...most people looking to buy now were barely old enough to understand how to make change - let alone the state of the economy. That's how they can get away with it. Hey, many of the folks coming up with these schemes are in the same age group; how can they learn from history when they know little about it.
Bingo
I put 0 down when I bought my house in 2014. Now it's worth 3 times as much and I'll have it paid off in 8 years. 😮
There are always exceptions to the rules. His advice still holds true for the majority of home buyers
You got unbelievably lucky. Congrats.
I think its not about the down payment, its that they are trying to loan to people that are unable to save the money. If they cant save it the issue is how will they pay it. Its awesome you pulled that off, but unfortunately YOU are exceptional and not the norm. Awesome you did that! Im doing a nothing down loan for my house, but its a VA loan so a bit different
@@evr0.904 I was gonna say that.
I did the same in 2021 and locked in a crazy good interest rate. Rents in my area have already skyrocketed past the base cost of my house (mortgage/taxes/insurance), not to mention the already significant appreciation.
If someone is already paying that amount in rent and is not overextending themselves, why not switch to something that allows building equity?
This is interesting because my credit union offered my husband and I a 0 down loan in 2022. 3.75% interest rate.
We had to be really careful to make sure the home we found was WELL UNDER what we qualified for. We kept the 10k we had saved up invested in the stock market instead.
We had things go wrong with it but were able to save more money in 2023 that built up a small emergency fund.
I think it’s something to be super wary of going into and not to take lightly. We know we will only break even on our house if we sold today with all our other expenses. It’s definitely giving 2008 vibes again.
My first home was 0 down i was saving for 20% down but found out I could do 0 but it honestly worked out because it was the beginning of the boom and the value nearly doubled when i sold it 5 years later, used that to pay off my truck and put 20% down on new home, this was by pure luck i didn’t understand money then.
We bought our first home in 2017 on something similar to this. CalHFA. I was $200 out of pocket but had TWO additional loans. I think the difference was I didnt have to pay on the additional loans until the mortgage was done or we sold. Sounds like this new one youre paying on the additional loan at the start. What Im getting at is this isn't exactly new...that being said what happened in my case? Well fortunately it was a fixerupper. After some remodels including floors, paint, and an ikea kitchen we sold it in 2023 pocketing a good $125k when all was said and done. It worked out for us but we also chose very carefully what we were buying and put a lot of sweat into it. Doesnt mean it would work out the next time.
In my country there was one time like in 2015 onwards is 0% and even cashback like 10% to 30% where you can even cashout.....the house prices skyrocket due to the massive demand and now that the interest rates are up and demands are down and prices are down, they are still surviving....even if they sell now they are still positive. All boils down on how you manage your $...if u cant then definitely dont do it.
There’s also mortgage insurance (for mortgages with less than 20% down) and oopsie, closing costs! Thank you for another great video!
35 years ago I took out a 0% mortgage from the VA at 12% interest. Now I own that home Free and clear and rent it out. I live in another house that's nicer and also does not have a mortgage.
Your advice might be good for some people, but it's not one-size-fits-all.
I did this in 2021. I am now in the position to buy my second home because of the equity I have in my first home. Rent is literally throwing money in the trash for a bed to sleep on. The "Save money for a down payment" worked for Grandpa when houses cost $30,000.00. If you want to own a home, you have to accept some amount of financial risk. He is making you think there is a way to buy a home without accepting any risk.
For reference, we bought a 172k condo and are now shopping for a 300k house while being in the position to pay off a substantial amount of credit card and auto debt. Is we had rented for this duration. We would be signing a new lease for more than what our mortgage will be on a 300k house. Be stuck paying thousands each month towards debt and have no progress towards paying off a mortgage.
You're also forgetting about the costs associated with selling a home (in NY, 7% of the sale price is commission paid by the seller) so she'd be even further behind
Good video. Let's not forget though, that the GFC happened because the mortgages were securitized, and those securities were toxic.
The rise in price of a typical home has negated any wage growth I've had over the past 15 years. So I'm not buying unless I can save up enough to buy cash to avoid 30 years of payments
So what you're saying is, people who are patient can wait for this to crumble like 08 again and snag cheap houses? Sign me up!
At this point it feels on purpose that they get people to fail these loans so they can scoop up cheap housing. Part of me thinks they don't want a full on crash though. Just enough only they get access to cheap houses that failed their loans.
No housing won’t collapse demand is higher than supply. Once interest rates are cut houses are going to skyrocket
@drexelspivey872 This is true. But if you have a lot of people foreclose on their home because they can't afford the home, wouldn't that cause the demand to drop with a massive influx of homes going on the market from foreclosures?
@@crashtestdummy1972 let me correct my statement, I can only speak for where I live in which demand outweighs supply pretty incredibly. I just see people wishful thinking “oh I’ll wait out buying a home prices will go down” when in turn the opposite happens
@@drexelspivey872 Supply and demand is irrelevant when the participating parties don't have money to transact. Housing will collapse because people who can't afford to buy (i.e. those making less than 80% of the area median income) are going to purchase houses they can't afford. It's 2008 except, for some reason, they're making it more obvious. Now you HAVE TO under earn in order to qualify to get screwed over. In 2008, anyone could do it.
So true! Wealth has no shortcuts, here are ways to acquire it..🔥
I am fortunate I made decisions that changed my finances for the better (acquired over 1M in 2years) through my financiaI planner. Got my 2nd house in July and hoping to retire nxt yr.
Elizabeth Greenhunts
get to her with the name
Youre awesome, George 👏
We got a 0% down mortgage but it's a VA loan where we didn't pay the fee due to my husband's disability rating. It actually has saved us money vs traditional. Plus our rate is only 3% We'll have to paid off much quicker. We've paid off 47% of our loan in less than 4 years. I'm happy about it
Scary stuff, but you missed closing and moving costs. Josephine is more likely out over $40k unless her home has suddenly skyrocketed in value.
I get that this deal is different with the two loans being taken out, but I'm not necessarily against the idea of a 0 down payment. We used a VA home loan back in 1998 with a 0 down payment, and it's allowed us to invest money that would otherwise have been stuck in the house. The key is not buying a house outside your budget, which can be avoided with or without a down payment.
Homes were significantly more affordable in 98 bud
I’ve also used the 0% down VA loan a few times. Most recently in 2020. As long as you stay within budget you should be fine. Currently my mortgage, insurance, and taxes amount to 12% of my take home pay. This doesn’t include the extra Input towards my mortgage principle.
We used the 0% VA mortgage too and also have no PMI which is great. We do have savings, no other debt, and pay more on principle each month. We are in an area where rent cost is absolutely insane and it made no sense for us to rent. This can be a terrible option for those who aren't financially responsible or who are in a pinch but sometimes it does make sense.
Can you explain more about how much a monthly mortgage should be % of income. I’m worried about my aunt and uncle because he did the VA loan and now has a monthly mortgage of 3.2K and brings in 4.5K a month from disability… so I’m trying to learn more about this because they didn’t have a down payment and I’m worried. And the interests are so high their 350K house will be paid off once they paid 1.2 million over lifetime (which will be never) and they got promised that the monthly mortgage will lower over time with interest rates…Any advice helps. I’m just trying to learn
I bought 0% down with the VA loan just 8 months ago. No PMI and the home appraised recently for over 40k then what we purchased it for. No regrets.
Scared me for a second. I'm a huge fan of $0 down VA loans, but this is not at all the same.
For VA loans you are mortgaging 100%, but you only pay standard mortgage payments and can get in and out without being automatically in the hole.
This requires a second 3% loan and PMI on the mortgage. Absolutely crazy.
VA loans are 0% down and have been for decades with no issues. ‘08 was that plus interest only loans.
Love this!!🩷🩷🩷
My first house was on a low down-payment program; the math made sense, BUT only because rents in my area at the time were double what mortgages on the same property would be. (The magic of a town with a large temporary population.) Even with mortgage insurance, buying gave me breathing room that renting didn’t. In retrospect, it was a good decision.
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. 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 80s 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
Thank you for saving me hours of back and forth investigation into the markets. I simply copied and pasted her full name into my browser, and her website came up first in search results. She looks flawless.
You wait for a correction or you rent for the rest of your life like the rest of us. There's no way houses are going to continue to go up in perpetuity. They are unaffordable as is.
My first house was a zero down VA mortgage, it worked for us luckily, our area was fast growing and our house went up in value very quickly, we sold it 5 years later for almost double and put almost 30% down on our next mortgage
If you want to do this loan, buy a duplex.
You can depreciate half of your home, and the income generation is passive income.
You can pay extra payments (don't have to) from the income you are receiving. But your payments will be less because of rent collected.
Being a landlord is work, and risky. But a very doable situation if you need a no down payment house.
What about a VA loan with 0 down? That's what i did, but i also got 30k in incentives from the builder and put 300 extra a month to principle(with planned increases as time goes on). But i guess that's where the financially stable/smart part comes in. So 0% down is not always bad, at least imo. For sure, though , this loan type in the video is horrible.
This hit close to home. Prior to living on a budget, in 2018 we got a mortgage with UWM with only about $4000 down. I don't remember there being the 15,000 loan on top but we did have to pay PMI. We have since refinanced while house prices were crazy during covid to get rid of the PMI, lower it from 30 to 20 years and started budgeting. This "worked" for us but I would not count on or recommend it looking back.
I saw an ad today for a HELOC credit card. Wow. Just wow.
I think there are other programs out there that are different. We bought our house in 1994 with Zero down payment with a interest rate 9.5% which was a little high at that time but still it was affordable, we had $250.00 in debt when we bought. It is now paid in full. Anna In Ohio
Whats scarier is suggesting renting something in which you will never own and help the landlord build equity as a better suggestion. Stretching your DTI is far worse of a threat than your down-payment presuming you intend to live in the property at least 5 years.
Renting imo is a short term bridge while you prepare for homeownership not something to do forever
And if you’re never ready, financially? Whether you rent for 2yrs or 20, if you’re not financially ready, you’re not ready. You may be helping someone else, the landlord, BUT you’re keeping yourself out of financial trouble
@marcedwards7110 there will always be individuals who are never ready but I'm presuming those who are watching this show at least have the bare minimum required to move to with a little guidance
i wish I had been able to buy because houses were 250 k and now they are 2,000,000 but i got sick@@chaosdragun1608
I did get 100% loan once around 2016 but it wasn't as described. It was through my credit union, who had a higher than average interest rate at the time, but the CU loan did not require PMI at the time we'd pay more for the other loan with PMI we qualified for even with a down payment (3-5% I can't remember). That said, I still don't think it was a great move by any means, but I've learned a lot since then and wish I could bring that knowledge back in time!
I put the minimum on my house but then again the mortgage amount equaled rent and according to mortgage pre approval, i bought half the house i could afford and it worked out very well. Rent is crazy now. If you can get mortgage less than your rent with a house with no major problems and not in a flood zone, it could work
I got a zero down mortgage from the VA in 2009 after the crash you mention at 6.5 percent 2 years later refinanced at 3 percent for 15 years, now paid for and our home is worth 3.5 times what we paid. This is an interesting take on zero down mortgages. But not the same as what happened in 2008, guidelines are in place to make sure people have the income. There is an IRS form that has to be filled out for IRS to verify income. Also no way I would tell someone to rent for the rest of their life. Bad advise cause rent never goes down, ever! Also liked the way you plugged in your affiliate links in the video.
The Ramsey team also actively preach against using VA loans, hope you aren't surprised. Ive used VA loans multiple times, and am in a fantastic position. A lot of principles are good, but I think they've missed the mark completely on VA loans.
Ramsey is against VA loans, I think they totally missed the mark with their position on them.
Can't argue with any of this. We got a zero down loan in 2003 but did pay some earnest money up front (Pick a pan, pick a lot). Refinanced twice. Stuck with an FHA loan right now with PMI but we're at 3% so not much we can do about it. Looking forward to paying it off early.
So glad i actually did mortgages for a bit before ever buying a house cause it killed any temptation i might have to buy before I'm ready. I might not wait to have 20% down, but I'd really like to have at least 10%. And with the difference between rent & mortgage payments, i do need to raise my income some but I'm so much closer than I've ever been. I see it as totally possible.
Our first home we put 3% down. However, this was a classic starter home and quite affordable. we had a fix 30 year but for about 10 years we were on the edge financially. While its true the home appreciated, we paid for that with emotional stress. We sold that home and upgraded a little bit and put 25% down on a 15 year fixed paid it off in 12 years. I'm mid 60s still in the workforce and very few of my co-workers have paid for homes. The problem is first buying too much home the second is IF the market goes south and/or if the home buyer loses income and is on the edge financially the same thing that happened in 2008 could happen again that is people underwater and just walking away for the home. I personally know two couples that this happened to so it's not fiction. Today I thinks it's worse because many Americans have a ton of other debt.
Happened to my brother he bought in 2008. He didn't learn much bc he moved but took another mortgage. He won't sacrifice his lifestyle so he will have to work longer but that's his choice
The 2008 crash wasn't just isolated terrible mortgage lending by 1 opportunistic company. It was a massive collapse because (a) banks were bundling these terrible loans together as an investment opportunity and selling them on the market to institutional investers like pension funds and (b) because the bank could make so much in fees on the sale of this "investment" they were heavily incentivised to increase the volume of loans whether or not the loans were any good. A single business going big into sub-prime won't hurt anything, unless they can create a market for the resale of crappy loans owned by broke people.
The problem is that this is the bank setting the trend
I hope young people watch George. This was a painfully obvious video to many in their 40’s but great learning/history lesson for those in their 20’s
The big problem with sub prime loans was that the loans were repackaged and sold as mortgage backed securities, rated as AAA investments despite the high default risk. Basically securities fraud. It was even more fraudulent as the loans were often stuffed into securities after the securitization date, which is illegal and fraud.
The scariest thing is the zero-down mortgage with all fees included, basically a 105-110% LTV. Underwater immediately.
Right
What’s so scary? If you lose your job or hate the place, you just hand in your keys and lose nothing. Might be scary if you’re the bank.
@@GarBlaineNavy you must have been too young to consciously live through the 2008-2009 era.
@@PeperazziTube I was an adult in 2008. You’re missing the point.
@@GarBlaineNavy if you got nothing to lose, losing it all is not scary, I get that, lol
08 was more about garbage loans and tons of horrible lenders, giving these people adjustable interest rates that included balloon payments. If that predatory practice isn't happening in this 100%, it shouldn't turn out any worse than any mortgage with a PMI. 🤷🏾♀️
Buy small house Pay it off fast Use that for DP on next Best case scenario avoid rent then eventually avoid PMI
It’s called a starter home
It's basically non-government funded down-payment assistance. We used a Down payment assistance program in 2018 to buy our first home with approx 5k out of pocket total. We definitely were overbudget and naive at the time, but it was a great investment and we made 120k in less than 3 years on it, which allowed us to relocate back to our homestate of WA where homes are much more expensive and we could roll that equity into a "proper" down payment towards our 2nd home purchase. It's not perfect, but I think the less barriers to homeownership there are without putting people at such risk like 2008, it's not that bad terrible of an idea. They've changed so many regulations with lenders so that 2008 can never happen again. But also being housepoor is absolutely terrible and I would never wish that upon anyone. So if you truly cannot afford to buy and maintain a home, just rent.
So, I did this 2 years ago.... 10K no interest downpayment loan that is attached to my mortgage. We had the money in savings.. still do... but with the pandemic and everything it seemed like a better idea to not wipe out savings for a down payment. The good news is I plan on staying in the home for the next 10 years.. but how can I get rid of the the no interest 10k down payment loan? Can i start paying separately on it? Refi it if rates ever drop? How would you deal with it at this point?
They won't see this. Write to the website
we bought our house with 3 percent down, but we have an interest rate less then 3% and our has trippled in value. So it can work out well. we have increased our income, so the percentage of our budget is less of our total income, and our mortgage is cheeper per month then renting a studio in our area, so it can be a good investment for some scenerios.
Yes. The 3% interest scenario
I’ve purchased every home I’ve ever owned with zero down sans one using VA loans. How has it worked out for me? I’m a millionaire now and I’ve never made more than $60000 a year in my life. I must admit, I’ve never had to pay PMI because it’s a VA loan.
If the $15k convinces you to buy the house, think again. You can easily spend that on maintenance and repairs and getting the house set up to function for you in year one. And every year thereafter.
Had to replace my water heater two years ago for 4k and my HVAC last year for 8k. Roofs are 10-20k. Folks need to have money if they are going to buy.
We actually did this for our first home in 2013. Our rates were 2.75 for the down payment loan and 3 for the main mortgage. Our down payment loan will be paid in 10 years so our monthly mortgage payment will go down. Luckily our home is worth a lot more due to renovations and market value. This strategy worked for us while we were young and looking to start a family in a good town. I can see how it might be a blessing and a curse depending on situations right now.
Perfect add placement.
I just bought my place with the VA home loan. And I had the seller cover my closing…. Yay for me, it really was zero down but I didn’t have that big caveat. That’s how you buy a house while on baby step 2 😅
But my monthly mortgage is $400 less than the average rent in this town, so I think I’m winning
You’ll likely be covering those closing costs when you’re the seller. Pray that your personal circumstances don’t change between now and when you have enough equity into the home, likely in 10 years time due to the way amortization schedules work.
Likely before then you’ll find out that owning a home also comes with owning the problems. Things break. Water lines develop leaks, septic tanks deteriorate, trees fall, and infestations occur, all of which will cost you money. Welcome to home ownership!
@@wan3416 I have used some of my savings to have professionals redo the carpet and the upstairs water fixtures. I have increased the value with the work I put into it, and also, neighboring properties (identical floor plans and same HOA) have appreciated about 15k-20k in the last 6 months since I bought the place
I know that if I needed to sell, I would probably only break even after realtor fees. But also, I have a very high income for this region and I bought the smallest house I could get away with.
I know I should have bought it cash (I don’t have the cash) or on a 15-year mortgage (a 15y mortgage would eat up all the extra money I’m putting towards paying off debt) but in my situation I needed a place to live and my monthly payments including HOA are cheaper than renting.
It’s not ideal but I only just discovered the Ramsy plan lol
@@wan3416depends on state and standard practice. If state allows it you can ask the buyer to cover but I highly doubt that will become the normal with the current market trend
He could pay extra as if he were renting. That’s what me and my partner have been doing and we turned our 30 year into a 21 year in only 2.5 years by being diligent.
How is this different than a VA loan for service members? So, are VA loans bad? Do they have a higher failure rate?
George didn't answer the burning question in my mind. If Josephine has to sell the house and immediately pay the 3% interest free loan, does UWM get first priority to foreclose over the other bank that loaned her the other 97%? Or does UWM just get lots of fees up front?
0% down is great if your buying your first starter home you can afford. Bad idea if your buying your first time dream house
If you can't save for a down payment, then how likely is it that you will make the monthly payments?
Not caring what anyone else thinks is a super power in today's world. I'm going to remember that one from now on.
This isn’t really a issue if they keep a 40% dti … plus as someone that seen these loans done the buyer strill coming to the table with cash for closing cost. This is normal a cheaper option than renting in month cost too. So with out putting things in that perspective is disingenuous. I have more clients living pay check to pay check renting and being Put in a bad spot by increasing rents. You have a better change of your rent going up over your month cost on a home you bought.
But you must also advise your clientes to plan ahead for emergencies he spoke of . I had a beach cottage on the NC shore when I was young got bit by a lyme tick and lost my job and lost everything. I'm buying again now but can't afford the same area anymore
I wasn't living there though so I wasn't homeless
we bought with 3.5% down back in 2016, but we were also deep into the process of being debt free - and we paid the house off in 4 years. So as long as you have a plan and are able to see it through, I don't see the problem.
3 and 0 aren't the same. 3 indicates you understand how not to be broke
I expect a 30%-50% temporary decline in house prices. I know this is going against the Ramsey opinion. But we’re facing deflation and a decrease of money velocity, due to incoming depression. It’s not gloom and doom but a normal correction in the business cycle to eliminate malinvestments. Look at commercial real estate - the banks will be forced to liquidate massively depreciated assets in their portfolio to stay liquid. Residential market will follow. The good deals are coming and no, you shouldn’t buy a house right now. But everyone has an opinion ❤
Its possible but IMHO there are too many people and not enough houses. Supply and demand
When your rent is so high you can't save for a downpayment... this is the way to go. Make sure the mortgage payment is about 15-25% lower than the rent you are paying now. So you have some room to save for emergencyfund/payoff the loan/mortgage. In the Netherlands its common (zero down) Not to long ago it was also common to finance the extra costs of purchasing a house. A mortgage up to 110% of the houseprice.... Rent is often very high here. Purchasing a house in this way is cheaper then renting most of the time. (in the netherlands) Its risky ... when you loose you're job etc etc. But you also have to pay rent when you're out of a job.
The market always corrects but it feels like it never will
What are your thoughts on the WA State Home Advantage down payment assistance loan program? BUT buying a new construction home. They say it’s 0% interest and if you refinance you don’t have to pay off the 2nd mortgage, it all rolls into one. Also if you sell whatever you make you have to then pay off the second mortgage. Or at the end of the 30 years if you stay in the home the whole time.
The assumption that buyers do not think about these scenarios is a little ridiculous. Taking advantage of 0 down loans does not also means buyers do not have the down payment, some are talking advantage of the 0% interest rate. It is also incorrect to think the buyers taking advantage of these loans are low income. Most of the buyers that took advantage of this program make o over 170k. This is one of the reasons it was discontinued.
Not a fair representation. I bought my first house at 25 with a zero down program. Stipulations are I can’t sell or refinance as mentioned in video BUT that’s only for the first 3 years. That 3 years ends November 2025 at which point the down payment loan is entirely forgiven. I was willing to bet I’d be fine for 3 years and I’ve been more than fine and actually bought a second house 5mo ago and now have a rental property.
Zero-down mortgages are so expensive when you consider all the additional fees and higher rates, that you might as well just rent forever.
I unfortunately have to find a place to live..I'm 60..and only have 5yrs before retirement..I was hoping to not have to purchase anything til I did retire..was planning on traveling for the rest of my life..but life throws some big curves..so..I am torn with looking for a home or renting for the next five years..ugh..George can you help with advice
Thank you, it was a good article
Great, common sense video George. Thanks!
Sorry George but I don't agree with you on this one. Our first mortgage was through UWM on an USDA loan @ 2.75% for a townhouse back the beginning of 2020 (before things shot up), We managed to sell that house for a 125k profit. Not saying that would work today, but I would say timing is key when making these decisions. And if people buy with the intention of staying for a long time then does it really make that big of a difference?
Also at that time for perspective, I paid $1100 for rent on a 900sq ft 2 bedroom apartment. My mortgage for an 1800 sqft townhouse with a garage was $1200. In some cases it is worth it. I wouldn't do that right now but as stated above. Timing is key.
And do your point of what can go wrong.. IF you are following the baby steps with the exception of a mortgage then you should be just fine.