High Interest rates replace high prices?

[patientrenter]

Rustico: “Why does the o.p. need “low initial payments” on a house they can afford?”

Using my (extremely conservative personal) standards for affordability, they wouldn’t need a low initial payment loan at all, even if interest rates were 20%. But I recognize others have more normal affordability standards. If interest rates went back to 15%, and house prices plummeted, I wouldn’t have any problem advising a young person on their way up to stretch a little for a more expensive property (by a little, maybe 10-25% more). They could then either live on rice and beans for 5 or 10 years, or take on a loan with initial payments for that period that are a little lower than a level payment loan, maybe 5-15% less for 5 years.

Patient renter in OC

[patientrenter]

Rustico: “Why does the o.p. need “low initial payments” on a house they can afford?”

Using my (extremely conservative personal) standards for affordability, they wouldn’t need a low initial payment loan at all, even if interest rates were 20%. But I recognize others have more normal affordability standards. If interest rates went back to 15%, and house prices plummeted, I wouldn’t have any problem advising a young person on their way up to stretch a little for a more expensive property (by a little, maybe 10-25% more). They could then either live on rice and beans for 5 or 10 years, or take on a loan with initial payments for that period that are a little lower than a level payment loan, maybe 5-15% less for 5 years.

Patient renter in OC

[patientrenter]

Rustico: “…wamu… LTV had recently been changed from 95 to 75”

For months, I’ve been reading that home prices in the near future would be dictated by 20% down requirements and fixed level payments thereafter. But then I see people saying they can get 10% down loans with low initial payments. It didn’t make any sense to me, but HLS and others apparently could still find dumb lenders willing to give cheap high-risk loans.

If I were a lender in California, land of the non-recourse mortgage loan, I sure wouldn’t lend to just about anybody, regardless of FICO, who put less of their own money down than a conservative estimate of the possible 5-year decline in the future market price of the home. Practically speaking, you can’t charge enough in basis points to cover the risk of that loss (unless the taxpayers are providing you with underpriced guarantees through FHA etc).

HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC

[patientrenter]

Rustico: “…wamu… LTV had recently been changed from 95 to 75”

For months, I’ve been reading that home prices in the near future would be dictated by 20% down requirements and fixed level payments thereafter. But then I see people saying they can get 10% down loans with low initial payments. It didn’t make any sense to me, but HLS and others apparently could still find dumb lenders willing to give cheap high-risk loans.

If I were a lender in California, land of the non-recourse mortgage loan, I sure wouldn’t lend to just about anybody, regardless of FICO, who put less of their own money down than a conservative estimate of the possible 5-year decline in the future market price of the home. Practically speaking, you can’t charge enough in basis points to cover the risk of that loss (unless the taxpayers are providing you with underpriced guarantees through FHA etc).

HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC

[patientrenter]

Rustico: “…wamu… LTV had recently been changed from 95 to 75”

For months, I’ve been reading that home prices in the near future would be dictated by 20% down requirements and fixed level payments thereafter. But then I see people saying they can get 10% down loans with low initial payments. It didn’t make any sense to me, but HLS and others apparently could still find dumb lenders willing to give cheap high-risk loans.

If I were a lender in California, land of the non-recourse mortgage loan, I sure wouldn’t lend to just about anybody, regardless of FICO, who put less of their own money down than a conservative estimate of the possible 5-year decline in the future market price of the home. Practically speaking, you can’t charge enough in basis points to cover the risk of that loss (unless the taxpayers are providing you with underpriced guarantees through FHA etc).

HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC

[patientrenter]

Rustico: “…wamu… LTV had recently been changed from 95 to 75”

For months, I’ve been reading that home prices in the near future would be dictated by 20% down requirements and fixed level payments thereafter. But then I see people saying they can get 10% down loans with low initial payments. It didn’t make any sense to me, but HLS and others apparently could still find dumb lenders willing to give cheap high-risk loans.

If I were a lender in California, land of the non-recourse mortgage loan, I sure wouldn’t lend to just about anybody, regardless of FICO, who put less of their own money down than a conservative estimate of the possible 5-year decline in the future market price of the home. Practically speaking, you can’t charge enough in basis points to cover the risk of that loss (unless the taxpayers are providing you with underpriced guarantees through FHA etc).

HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC

[patientrenter]

Rustico: “…wamu… LTV had recently been changed from 95 to 75”

For months, I’ve been reading that home prices in the near future would be dictated by 20% down requirements and fixed level payments thereafter. But then I see people saying they can get 10% down loans with low initial payments. It didn’t make any sense to me, but HLS and others apparently could still find dumb lenders willing to give cheap high-risk loans.

If I were a lender in California, land of the non-recourse mortgage loan, I sure wouldn’t lend to just about anybody, regardless of FICO, who put less of their own money down than a conservative estimate of the possible 5-year decline in the future market price of the home. Practically speaking, you can’t charge enough in basis points to cover the risk of that loss (unless the taxpayers are providing you with underpriced guarantees through FHA etc).

HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC

[Anonymous]

patient: “HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC”

I hope so. Everyone can’t afford that kind of down payment. In my opinion, people shouldn’t be punished because of the acts of others. Just because someone doesn’t put 20% down doesn’t mean they can’t afford the house or will let it foreclose.

[Anonymous]

patient: “HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC”

I hope so. Everyone can’t afford that kind of down payment. In my opinion, people shouldn’t be punished because of the acts of others. Just because someone doesn’t put 20% down doesn’t mean they can’t afford the house or will let it foreclose.

[Anonymous]

patient: “HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC”

I hope so. Everyone can’t afford that kind of down payment. In my opinion, people shouldn’t be punished because of the acts of others. Just because someone doesn’t put 20% down doesn’t mean they can’t afford the house or will let it foreclose.

[Anonymous]

patient: “HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC”

I hope so. Everyone can’t afford that kind of down payment. In my opinion, people shouldn’t be punished because of the acts of others. Just because someone doesn’t put 20% down doesn’t mean they can’t afford the house or will let it foreclose.

[Anonymous]

patient: “HLS and pasadenabroker and others, are there any dumb lenders still out there, meaning ones offering non-recourse loans with less than 20% down?

Patient renter in OC”

I hope so. Everyone can’t afford that kind of down payment. In my opinion, people shouldn’t be punished because of the acts of others. Just because someone doesn’t put 20% down doesn’t mean they can’t afford the house or will let it foreclose.

[Author]

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