- This topic has 300 replies, 23 voices, and was last updated 16 years, 9 months ago by Ranjan.
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February 13, 2008 at 7:24 PM #153301February 13, 2008 at 8:37 PM #152933nostradamusParticipant
The $417k is the amount the gov. would guarantee the loan for. Anything above that is a jumbo loan.
Less than 20% down means you pay PMI.
February 13, 2008 at 8:37 PM #153210nostradamusParticipantThe $417k is the amount the gov. would guarantee the loan for. Anything above that is a jumbo loan.
Less than 20% down means you pay PMI.
February 13, 2008 at 8:37 PM #153213nostradamusParticipantThe $417k is the amount the gov. would guarantee the loan for. Anything above that is a jumbo loan.
Less than 20% down means you pay PMI.
February 13, 2008 at 8:37 PM #153235nostradamusParticipantThe $417k is the amount the gov. would guarantee the loan for. Anything above that is a jumbo loan.
Less than 20% down means you pay PMI.
February 13, 2008 at 8:37 PM #153311nostradamusParticipantThe $417k is the amount the gov. would guarantee the loan for. Anything above that is a jumbo loan.
Less than 20% down means you pay PMI.
February 13, 2008 at 10:39 PM #152967RanjanParticipantwhy putting 10% down is such a bad thing?
The bank should be looking at documented income, assets and credit standing of the person they are issuing loan to.They got over-powered by greed, over-looked the basics and paid the price. Why should they vent it out on the disciplined and fiscally responsible citizens?
One could manage to put down 20% but may be willing to put 10% only. He/She can have other 10% in a form that’s easily usable for other purposes.
Does anyone have HLS’s email id?Would appreciate.
Thanks
Thanks
February 13, 2008 at 10:39 PM #153246RanjanParticipantwhy putting 10% down is such a bad thing?
The bank should be looking at documented income, assets and credit standing of the person they are issuing loan to.They got over-powered by greed, over-looked the basics and paid the price. Why should they vent it out on the disciplined and fiscally responsible citizens?
One could manage to put down 20% but may be willing to put 10% only. He/She can have other 10% in a form that’s easily usable for other purposes.
Does anyone have HLS’s email id?Would appreciate.
Thanks
Thanks
February 13, 2008 at 10:39 PM #153248RanjanParticipantwhy putting 10% down is such a bad thing?
The bank should be looking at documented income, assets and credit standing of the person they are issuing loan to.They got over-powered by greed, over-looked the basics and paid the price. Why should they vent it out on the disciplined and fiscally responsible citizens?
One could manage to put down 20% but may be willing to put 10% only. He/She can have other 10% in a form that’s easily usable for other purposes.
Does anyone have HLS’s email id?Would appreciate.
Thanks
Thanks
February 13, 2008 at 10:39 PM #153271RanjanParticipantwhy putting 10% down is such a bad thing?
The bank should be looking at documented income, assets and credit standing of the person they are issuing loan to.They got over-powered by greed, over-looked the basics and paid the price. Why should they vent it out on the disciplined and fiscally responsible citizens?
One could manage to put down 20% but may be willing to put 10% only. He/She can have other 10% in a form that’s easily usable for other purposes.
Does anyone have HLS’s email id?Would appreciate.
Thanks
Thanks
February 13, 2008 at 10:39 PM #153345RanjanParticipantwhy putting 10% down is such a bad thing?
The bank should be looking at documented income, assets and credit standing of the person they are issuing loan to.They got over-powered by greed, over-looked the basics and paid the price. Why should they vent it out on the disciplined and fiscally responsible citizens?
One could manage to put down 20% but may be willing to put 10% only. He/She can have other 10% in a form that’s easily usable for other purposes.
Does anyone have HLS’s email id?Would appreciate.
Thanks
Thanks
February 13, 2008 at 11:23 PM #152988patientrenterParticipantRanjan, requiring 10% down is only a very small protection for the (ultimate) lender in a non-recourse purchase loan state like CA facing major and persistent price declines. Credit scores, and wealth in other assets, mean even less. About all that protects the lenders in a market in major decline is the borrower’s downpayment, and a 10% downpayment is less than the projected one-year decline in home prices in most CA markets. It’s so small it’s a joke.
Consider this situation: Someone buys a $1 million house now with 10% down, so the ultimate lenders put up $900,000. In 3 years time the house is sold for $600,000. How do the lenders get their $900,000 back? They don’t of course, regardless of the credit or other assets of the borrower. No matter who the (non-recourse state) borrower is, the lenders get back just $600,000 less the sale expenses, and take a massive loss.
In my example, which isn’t too outlandish, the lenders would have to have received annual interest of $100,000 in excess of the Treasury rate for 3 years in order to be compensated for their $300,000 loss at the future foreclosure, ignoring their foreclosure and other costs. That’s 11.11% extra interest annually over and above the risk-free rate! Clearly, lenders still are not charging anything even close to the interest rates required to justify 10% downpayments. Before now, the lenders were all pricing in never-ending home price inflation. Now they are all pricing in huge government bailouts.
Patient renter in OC
February 13, 2008 at 11:23 PM #153263patientrenterParticipantRanjan, requiring 10% down is only a very small protection for the (ultimate) lender in a non-recourse purchase loan state like CA facing major and persistent price declines. Credit scores, and wealth in other assets, mean even less. About all that protects the lenders in a market in major decline is the borrower’s downpayment, and a 10% downpayment is less than the projected one-year decline in home prices in most CA markets. It’s so small it’s a joke.
Consider this situation: Someone buys a $1 million house now with 10% down, so the ultimate lenders put up $900,000. In 3 years time the house is sold for $600,000. How do the lenders get their $900,000 back? They don’t of course, regardless of the credit or other assets of the borrower. No matter who the (non-recourse state) borrower is, the lenders get back just $600,000 less the sale expenses, and take a massive loss.
In my example, which isn’t too outlandish, the lenders would have to have received annual interest of $100,000 in excess of the Treasury rate for 3 years in order to be compensated for their $300,000 loss at the future foreclosure, ignoring their foreclosure and other costs. That’s 11.11% extra interest annually over and above the risk-free rate! Clearly, lenders still are not charging anything even close to the interest rates required to justify 10% downpayments. Before now, the lenders were all pricing in never-ending home price inflation. Now they are all pricing in huge government bailouts.
Patient renter in OC
February 13, 2008 at 11:23 PM #153267patientrenterParticipantRanjan, requiring 10% down is only a very small protection for the (ultimate) lender in a non-recourse purchase loan state like CA facing major and persistent price declines. Credit scores, and wealth in other assets, mean even less. About all that protects the lenders in a market in major decline is the borrower’s downpayment, and a 10% downpayment is less than the projected one-year decline in home prices in most CA markets. It’s so small it’s a joke.
Consider this situation: Someone buys a $1 million house now with 10% down, so the ultimate lenders put up $900,000. In 3 years time the house is sold for $600,000. How do the lenders get their $900,000 back? They don’t of course, regardless of the credit or other assets of the borrower. No matter who the (non-recourse state) borrower is, the lenders get back just $600,000 less the sale expenses, and take a massive loss.
In my example, which isn’t too outlandish, the lenders would have to have received annual interest of $100,000 in excess of the Treasury rate for 3 years in order to be compensated for their $300,000 loss at the future foreclosure, ignoring their foreclosure and other costs. That’s 11.11% extra interest annually over and above the risk-free rate! Clearly, lenders still are not charging anything even close to the interest rates required to justify 10% downpayments. Before now, the lenders were all pricing in never-ending home price inflation. Now they are all pricing in huge government bailouts.
Patient renter in OC
February 13, 2008 at 11:23 PM #153288patientrenterParticipantRanjan, requiring 10% down is only a very small protection for the (ultimate) lender in a non-recourse purchase loan state like CA facing major and persistent price declines. Credit scores, and wealth in other assets, mean even less. About all that protects the lenders in a market in major decline is the borrower’s downpayment, and a 10% downpayment is less than the projected one-year decline in home prices in most CA markets. It’s so small it’s a joke.
Consider this situation: Someone buys a $1 million house now with 10% down, so the ultimate lenders put up $900,000. In 3 years time the house is sold for $600,000. How do the lenders get their $900,000 back? They don’t of course, regardless of the credit or other assets of the borrower. No matter who the (non-recourse state) borrower is, the lenders get back just $600,000 less the sale expenses, and take a massive loss.
In my example, which isn’t too outlandish, the lenders would have to have received annual interest of $100,000 in excess of the Treasury rate for 3 years in order to be compensated for their $300,000 loss at the future foreclosure, ignoring their foreclosure and other costs. That’s 11.11% extra interest annually over and above the risk-free rate! Clearly, lenders still are not charging anything even close to the interest rates required to justify 10% downpayments. Before now, the lenders were all pricing in never-ending home price inflation. Now they are all pricing in huge government bailouts.
Patient renter in OC
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