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They should have done this years ago, maybe a little less strict, but nothing like this would have happened. Now the probable are going to overdo it so people who are walking away are stuck in their rentals with high rents, for others it is too bad and I feel sorry for the once who really couldn't help it getting in trouble just because of really bad advise and/or health issues.
True... but you live in Houston... so 5% on a house could mean $5K.
5% on a house in my neighborhood could mean $20K.
Thats irrelevant... If the average home is $400,000 (so 5% is $20,000) and all you have is $5000, maybe buying is outside your reach for right now. I (of course) am not a fan of large down payments, but expecting 3% down is not unreasonable for lenders. Its fair to expect some risk on the part of the buyer and for them to show the capacity to save.
It stinks to be priced out of the market, but I think we learned that the solution is not 100% financing, low doumentation or teaser rates. I know, it became PC that all American's have a right to a home and the drive was to increase homeownership to unprecented levels. While that may be a good thing in theory, at times its best to step back and make sure its sustainable.
"These days, home buyers almost always have to make a substantial down payment, at least 5%"
Since when did 5% become substantial? Maybe if you cannot afford 5%, you should not be buying a house of that value or at all.
My husband and I recently moved from CA to TN. We are currently renting an apt., and have been renters in CA as well. My husband makes decent money in the IT field, we have 1 car payment, 1 low CC balance, & I am currently staying home with my 1 yr old son, and we do without a lot of nice things. I also have excellent credit. We have been trying to save money so that we can purchase a house soon. I still don't think it will be enough for a 5% down though.
My response to the quote is: How in the heck are you supposed to be able to save money with high rents, increasing gas prices, not to mention the prices for food & other goods. It's sad times when a husband has to work 2 jobs, or a mom has to go to work (having to pay for child care at that) to make a 5% down to buy a house.
I'm in my early 30's, and it is rough for us. Definately way worse than my parents had it.
I have always been very responsible with money matters, and it has gotten me nowhere!!! Just wanna say "thanks" to all the people who screwed everyone by buying houses they could not afford!
Hopefully things will get better instead of worse. I'm sick of renting!!!!
My husband and I recently moved from CA to TN. We are currently renting an apt., and have been renters in CA as well. My husband makes decent money in the IT field, we have 1 car payment, 1 low CC balance, & I am currently staying home with my 1 yr old son, and we do without a lot of nice things. I also have excellent credit. We have been trying to save money so that we can purchase a house soon. I still don't think it will be enough for a 5% down though.
My response to the quote is: How in the heck are you supposed to be able to save money with high rents, increasing gas prices, not to mention the prices for food & other goods. It's sad times when a husband has to work 2 jobs, or a mom has to go to work (having to pay for child care at that) to make a 5% down to buy a house.
I'm in my early 30's, and it is rough for us. Definately way worse than my parents had it.
I have always been very responsible with money matters, and it has gotten me nowhere!!! Just wanna say "thanks" to all the people who screwed everyone by buying houses they could not afford!
Hopefully things will get better instead of worse. I'm sick of renting!!!!
OK, I feel better now.............
We've been renters all our adult lives too, studying hard, working hard, saving. But there was no way we could buy a house here in Calif the last few years. We didn't know how anyone else could do it, not realizing all these no doc, zero down, etc loans were such the norm. We just kept saving and hoping we'd somehow save enough. Well, thanks to the bubble burst in housing, prices have finally started to come down enough that we at least have 10% saved, and don't have to get into a bidding war to buy a home. And because we could never afford a home, we have nothing to sell that would prevent us from buying.
Be patient, keep saving and I think the continuing crash of the housing market will help more folks like you and me by bringing prices back down to where they should be. Don't know if it can get back to how our parents had it, but you never know.
At least, that's my optimistic view of all this mess . . .
Try to set aside the emotional or societal "fairness aspects" of being required to come up with a significant down payment. Obviously "significant" or "substantial" are relative terms and are perceived differently depending upon your personal circumstance, and whether you are the buyer or lender.
If you are objective in evaluating a home sale as a business transaction, both Poltracker and rcarrillo have valid points. Clearly, the "walk-away" trend for mortgages in trouble is exacerbated by lack of equity, and people are less motivated if they have none of their money being risked. Historically, the reference standard for down payments was 20% when I first started buying houses. People saved, borrowed, bought a "starter" house and WAITED until they could afford it. The points of Poltracker and rcarrillo were that when people do this, the chance of successfully retaining the house are greater.
Although many people out of anger may agree with the sentiment
of your quip on Bill Gates, it is irrelevant to understanding one of the core reasons for the current housing debacle.
My husband and I recently moved from CA to TN. We are currently renting an apt., and have been renters in CA as well. My husband makes decent money in the IT field, we have 1 car payment, 1 low CC balance, & I am currently staying home with my 1 yr old son, and we do without a lot of nice things. I also have excellent credit. We have been trying to save money so that we can purchase a house soon. I still don't think it will be enough for a 5% down though.
My response to the quote is: How in the heck are you supposed to be able to save money with high rents, increasing gas prices, not to mention the prices for food & other goods. It's sad times when a husband has to work 2 jobs, or a mom has to go to work (having to pay for child care at that) to make a 5% down to buy a house.
I'm in my early 30's, and it is rough for us. Definately way worse than my parents had it.
I have always been very responsible with money matters, and it has gotten me nowhere!!! Just wanna say "thanks" to all the people who screwed everyone by buying houses they could not afford!
Hopefully things will get better instead of worse. I'm sick of renting!!!!
OK, I feel better now.............
I'm glad you feel better but I have some news for you. Home ownership is not a RIGHT that is owed to you but a PRIVLEGE to be earned. Saving is not easy - you have to give things up to do it. When we saved for our home, we put every cent we could in our savings account. That means we did not eat out, go to movies or go on vacation. We shopped at Walmart for clothes rather than a department stores and the thermostat was set 5 degrees higher in summer and 5 degrees lower in winter to save on electricity...I can go on and name a thousand other little things we did to save money. Long story short - it took almost 10 years to have enough money saved that we could buy the home that we wanted - with a down payment. We did it a dollar at a time. Stop making excuses and and lookiing for someone to hand you your dream - work for it and make it work. You will appreciate it much more in the end. Yup - I feel better now too.
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, for others it is too bad and I feel sorry for the once who really couldn't help it getting in trouble just because of really bad advise and/or health issues.
