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SD Transplant.
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January 10, 2009 at 4:18 PM #327359January 10, 2009 at 5:58 PM #326861
patientrenter
Participant[quote=CONCHO]Also, don’t forget that many of the financial geniuses (I unfortunately must include myself in this group) who have been waiting to purchase a home have had their down payments reduced because they had some portion of it in stocks. Even if they didn’t have any of their down payment in stocks, they probably had a lot of their retirement portfolio in stocks and that value is now much less. When lenders look at these borrowers balance sheets, they will be hesitant to lend as much as they would have before because they have fewer assets now.[/quote]
If this debt madness really does finally go away, then people who have to rely on borrowing against their retirement savings to buy a home will not be able to get a loan. Prices will match the paying ability of real buyers. The notion that it’s OK to buy a home when you can only make it happen by reducing the money you dedicated to support you in your retirement is nuts!
Sorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.
January 10, 2009 at 5:58 PM #327199Participant[quote=CONCHO]Also, don’t forget that many of the financial geniuses (I unfortunately must include myself in this group) who have been waiting to purchase a home have had their down payments reduced because they had some portion of it in stocks. Even if they didn’t have any of their down payment in stocks, they probably had a lot of their retirement portfolio in stocks and that value is now much less. When lenders look at these borrowers balance sheets, they will be hesitant to lend as much as they would have before because they have fewer assets now.[/quote]
If this debt madness really does finally go away, then people who have to rely on borrowing against their retirement savings to buy a home will not be able to get a loan. Prices will match the paying ability of real buyers. The notion that it’s OK to buy a home when you can only make it happen by reducing the money you dedicated to support you in your retirement is nuts!
Sorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.
January 10, 2009 at 5:58 PM #327272Participant[quote=CONCHO]Also, don’t forget that many of the financial geniuses (I unfortunately must include myself in this group) who have been waiting to purchase a home have had their down payments reduced because they had some portion of it in stocks. Even if they didn’t have any of their down payment in stocks, they probably had a lot of their retirement portfolio in stocks and that value is now much less. When lenders look at these borrowers balance sheets, they will be hesitant to lend as much as they would have before because they have fewer assets now.[/quote]
If this debt madness really does finally go away, then people who have to rely on borrowing against their retirement savings to buy a home will not be able to get a loan. Prices will match the paying ability of real buyers. The notion that it’s OK to buy a home when you can only make it happen by reducing the money you dedicated to support you in your retirement is nuts!
Sorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.
January 10, 2009 at 5:58 PM #327291Participant[quote=CONCHO]Also, don’t forget that many of the financial geniuses (I unfortunately must include myself in this group) who have been waiting to purchase a home have had their down payments reduced because they had some portion of it in stocks. Even if they didn’t have any of their down payment in stocks, they probably had a lot of their retirement portfolio in stocks and that value is now much less. When lenders look at these borrowers balance sheets, they will be hesitant to lend as much as they would have before because they have fewer assets now.[/quote]
If this debt madness really does finally go away, then people who have to rely on borrowing against their retirement savings to buy a home will not be able to get a loan. Prices will match the paying ability of real buyers. The notion that it’s OK to buy a home when you can only make it happen by reducing the money you dedicated to support you in your retirement is nuts!
Sorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.
January 10, 2009 at 5:58 PM #327374Participant[quote=CONCHO]Also, don’t forget that many of the financial geniuses (I unfortunately must include myself in this group) who have been waiting to purchase a home have had their down payments reduced because they had some portion of it in stocks. Even if they didn’t have any of their down payment in stocks, they probably had a lot of their retirement portfolio in stocks and that value is now much less. When lenders look at these borrowers balance sheets, they will be hesitant to lend as much as they would have before because they have fewer assets now.[/quote]
If this debt madness really does finally go away, then people who have to rely on borrowing against their retirement savings to buy a home will not be able to get a loan. Prices will match the paying ability of real buyers. The notion that it’s OK to buy a home when you can only make it happen by reducing the money you dedicated to support you in your retirement is nuts!
Sorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.
January 10, 2009 at 8:39 PM #326888blahblahblah
ParticipantSorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.
I didn’t mean that people were borrowing against their retirement savings, I was just referring to the fact that borrowers’ balance sheets have been drastically reduced. When you apply for a home loan, you disclose all of your assets and debts, including your 401K/IRAs, etc… Your lender will use this value, along with your income and credit history, in determining how much to loan you. The buyer who a year ago had a $300K 401K now has a $175K 401K, so lenders will not be willing to lend him as much. He’s not borrowing against those savings, but the lender is using that amount in determining how much he qualifies for. I totally agree that you shouldn’t borrow (much anyway) against your retirement savings to purchase a home.
January 10, 2009 at 8:39 PM #327225ParticipantSorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.
I didn’t mean that people were borrowing against their retirement savings, I was just referring to the fact that borrowers’ balance sheets have been drastically reduced. When you apply for a home loan, you disclose all of your assets and debts, including your 401K/IRAs, etc… Your lender will use this value, along with your income and credit history, in determining how much to loan you. The buyer who a year ago had a $300K 401K now has a $175K 401K, so lenders will not be willing to lend him as much. He’s not borrowing against those savings, but the lender is using that amount in determining how much he qualifies for. I totally agree that you shouldn’t borrow (much anyway) against your retirement savings to purchase a home.
January 10, 2009 at 8:39 PM #327297ParticipantSorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.
I didn’t mean that people were borrowing against their retirement savings, I was just referring to the fact that borrowers’ balance sheets have been drastically reduced. When you apply for a home loan, you disclose all of your assets and debts, including your 401K/IRAs, etc… Your lender will use this value, along with your income and credit history, in determining how much to loan you. The buyer who a year ago had a $300K 401K now has a $175K 401K, so lenders will not be willing to lend him as much. He’s not borrowing against those savings, but the lender is using that amount in determining how much he qualifies for. I totally agree that you shouldn’t borrow (much anyway) against your retirement savings to purchase a home.
January 10, 2009 at 8:39 PM #327317ParticipantSorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.
I didn’t mean that people were borrowing against their retirement savings, I was just referring to the fact that borrowers’ balance sheets have been drastically reduced. When you apply for a home loan, you disclose all of your assets and debts, including your 401K/IRAs, etc… Your lender will use this value, along with your income and credit history, in determining how much to loan you. The buyer who a year ago had a $300K 401K now has a $175K 401K, so lenders will not be willing to lend him as much. He’s not borrowing against those savings, but the lender is using that amount in determining how much he qualifies for. I totally agree that you shouldn’t borrow (much anyway) against your retirement savings to purchase a home.
January 10, 2009 at 8:39 PM #327399ParticipantSorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.
I didn’t mean that people were borrowing against their retirement savings, I was just referring to the fact that borrowers’ balance sheets have been drastically reduced. When you apply for a home loan, you disclose all of your assets and debts, including your 401K/IRAs, etc… Your lender will use this value, along with your income and credit history, in determining how much to loan you. The buyer who a year ago had a $300K 401K now has a $175K 401K, so lenders will not be willing to lend him as much. He’s not borrowing against those savings, but the lender is using that amount in determining how much he qualifies for. I totally agree that you shouldn’t borrow (much anyway) against your retirement savings to purchase a home.
January 10, 2009 at 9:46 PM #326901ParticipantI misunderstood, CONCHO. Thanks for the correction. Why would a lender in a non-recourse state like California care much how many other assets you have? Even if they cared some, why would they give any weight to qualified retirement assets?
Let’s face it, homeowners who are in difficulties are not going to cash in their 410k to pay the mortgage if the value of the home is much below the mortgage.
Whilst I accept that lenders may be taking these other factors into account to justify lending, it all strikes me as desperate attempts to avoid requiring big cash downpayments with careful appraisals, which are the only real protections against default losses.
January 10, 2009 at 9:46 PM #327240ParticipantI misunderstood, CONCHO. Thanks for the correction. Why would a lender in a non-recourse state like California care much how many other assets you have? Even if they cared some, why would they give any weight to qualified retirement assets?
Let’s face it, homeowners who are in difficulties are not going to cash in their 410k to pay the mortgage if the value of the home is much below the mortgage.
Whilst I accept that lenders may be taking these other factors into account to justify lending, it all strikes me as desperate attempts to avoid requiring big cash downpayments with careful appraisals, which are the only real protections against default losses.
January 10, 2009 at 9:46 PM #327311ParticipantI misunderstood, CONCHO. Thanks for the correction. Why would a lender in a non-recourse state like California care much how many other assets you have? Even if they cared some, why would they give any weight to qualified retirement assets?
Let’s face it, homeowners who are in difficulties are not going to cash in their 410k to pay the mortgage if the value of the home is much below the mortgage.
Whilst I accept that lenders may be taking these other factors into account to justify lending, it all strikes me as desperate attempts to avoid requiring big cash downpayments with careful appraisals, which are the only real protections against default losses.
January 10, 2009 at 9:46 PM #327331ParticipantI misunderstood, CONCHO. Thanks for the correction. Why would a lender in a non-recourse state like California care much how many other assets you have? Even if they cared some, why would they give any weight to qualified retirement assets?
Let’s face it, homeowners who are in difficulties are not going to cash in their 410k to pay the mortgage if the value of the home is much below the mortgage.
Whilst I accept that lenders may be taking these other factors into account to justify lending, it all strikes me as desperate attempts to avoid requiring big cash downpayments with careful appraisals, which are the only real protections against default losses.
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