Purchase of rental property can be done with 10% down, or less, depending on your credit score. To get a great loan, 25%+ is better, and rates AREN’T that much higher than normal, IF you qualify.
I posted an example of current rates on page 2 of “JOE 401K” thread.
No lender will accept a verbal “we are selling our other house” and not factor in the debt.
Many people have situations where their current loan is only under one spouse. There are many ways to purchase another, including using the other spouse or a friend or relative.
There are homes that people have been living in and paying the mortgage on and they have a pile of equity, but the deed or loan isn’t in their names, it’s a relative.
IF they want to sell, it creates problems regarding taxes etc.
If you live in Temecula, a 2nd home couldn’t be Murrieta. It usually has to be a resort/vacation destination. Idylwild, Big Bear, Palm Springs, etc. but NOT Hemet.
People are just complacent. Even if you guaranteed them that their house was going to drop $100K or $200K or that they could buy the house next door for $50k or $100k less than they owe right now, most people wouldn’t move.
Most people don’t make business decisions nor grasp the severity. It’s just easier to bury their head in the sand and wait for the storm to blow through. Even moving next door requires effort, OR they just don’t want to bother.
I know plenty of people that have plenty of equity that accept that their house is going to drop at least 25%-30% from the peak, but they aren’t going to make any changes. It’s their home, and still worth a lot more than they paid or ever dreamed it would be worth.
