[quote=SD Realtor]Personally I could not sleep at night if I didn’t have at least 6 months to a year reserves stashed somewhere or at least some type of plan to take care of my family if I lost employment. It doesn’t matter if the loan was an FHA loan or if I put all cash in. Having a strong reserve is in my opinion very important these days. That is just me though.
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And thats my point.
The person who started this thread seemed to suggest that they only had $55K in savings without much of a reserve. Purchasing a $450K house under that scenario is extremely risky and should be avoided. On the other hand, if they have another $50K stashed away in addition to the $55K down payment, then there isn’t as much risk.
As far as my point about FHA loans, the stats don’t lie. People with little or no equity in their home tend to default at a much higher rate. Therefore, I believe purchasers should be required to have a sufficient amount of down payment…say 20%.
