[quote=Cube][quote=Ready411]
Seems there are more 1st time buyers buying on a whim doing the 3.5% down FHA loans. That’s my problem. If this is the new standard, and these are the people I will have to compete against, it will change the entry level market because they have a different view on the value of money.[/quote]
This is my main concern in a nutshell. If I use 20% down as my standard, but others are using 3.5% (or less) and are only looking at debt service, it’s not a market in which I want to compete. I don’t want to play the game of “who’s willing to promise to pay more for a house”. That’s a game of one-ups-manship I don’t want to play.[/quote]
Amen. My feelings exactly.
There is no difference between what’s going on now and what was going on during the rise of the bubble (which has still not yet deflated). If a person with something to lose (20%+ down that was saved up over time),has to compete with a buyer with a 3.5% FHA loan (where the down payment can be borrowed!), then there is only going to be one winner — the least responsible, highest risk buyer/borrower. These people are **almost guaranteed** to end up in foreclosure if a single unlucky event happens and if there is no price appreciation to bail them out.
We have learned NOTHING from the events of this decade. That’s the biggest disappointment of all.
