Yesterday, I received three responses that disagreed with the amount of down-payment I suggested (20%) for first time home-buyers. The gist of the disagreement was: "There aren't many first time home buyers who have that much to put down..." I welcome and respect the opinions and comments I received. Thanks, for taking the time.
And here's bit of a rebuttal.
With the recent mortgage debacle, not yet behind us, home buyers who have to borrow have fewer choices, The FEDS are putting up more of the cash than private lenders, who saw investors flee in droves from mortgage-backed securities to other, less risky investment vehicles.
Now, I am no prophet, but I do believe it's going to take awhile for all of this to settle down. I am all for folks owning and and STAYING IN their own homes--but the reality is qualifying requirements for borrowers are becoming what you'd expect--more stringent.
So, all I am saying is the more one has to put down, the better. I am also saying, for too long, things have been too easy. (Home ownership is not a "right." Lenders and consumers have not been prudent. Greed, and comsumption, fueled by consumer debt, have ruled.)
I will admit that maybe 10% down is in the "twilight zone" and a bit optimistic and seemingly impossible for people to save for a down-payment.
But is it?
In one of my comments yesterday, I related the story of a buyer client I was privileged to serve last year: In one weekend, she picked a home, and we closed in less than 30 days. She paid CASH--$150,000 in cash. She and her husband are in their 50's; this was their FIRST HOME. She has a cleaning business. She and her husband SAVED that money over the years to, one day buy the home of their dreams.
They OWN their home. No one will ever be able to take it away! And, it will pass down to their daughter when they are gone. Some might say this is old fashioned, depression era idealism--for me, it's a breathe of fresh air.
I have such respect for these hard working, principled people who have a backbone and the discipline to do the right things, in the right ways, for the right reasons.
If you happen to have a copy-of today's Wall Street Journal--grab a cup of coffee...we'll all take a stiff whiff--and please see the front page story--"Mortgage Crisis Extends its Reach."
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