20% Down Payment... Here's One Realtor's Opinion

Bryan Robertson stirred up the pot really well with his recent featured post, Why is NAR fighting the 20% down rule in QRM?

The HUGE take-away from Bryan's post is, "Congress is working on legislation to define rules for a Qualified Residential Mortgage which includes provisions that would require 20% down payments on new loans, higher ratios for refinancing, consistent debt-to-income ratios, and a requirement to verify borrowers incomes. The rules do not apply to Fannie and Freddie loans, which constitute 90% of the market".

20% downpayment or more in conventional loans.

You could still do a 3 1/2% downpayment on a FHA federally-insured home loan.

By the time I read Bryan's post at 193 comments, I find each and every comment very interesting.

 

This post is not about what, why or how much. Here is just my personal opinion about saving for a down payment, no matter what amount it is: 3 1/2% on a FHA loan, 5% on a conventional, 20% or even 100% down.

I like the concept that buyers need to save for a down payment.

Isn't something such as HOMEOWNERSHIP be something worth saving and waiting for?

Homeownership is not a RIGHT (in my opinion). It's a privilege. It's not a sin to rent too.

Long-term plans should include homeownership eventually but many people (including myself) jump the gun too early to buy a home. I'm not saying Rent for the rest of your life but clean up your financial mess and/or debt-load to life becomes less stressful when you are a homeowner.

At Financial Peace University, we educate home owners to-be to have 3-6 months of household expenses and no consumer debt before buying a home on a 20% down payment on a 15-year note.

I believe no one will argue how much less stress life would be if any homeowner puts himself/ herself at that position before homeownership.

But to me, the beauty of this whole process lies in the journey of getting there.

Do you know how much sacrifices that must be made to get to that perfect tipping point of beginning homeownership? Most Americans have credit card, car notes and student loan messes to clean up, before saving for 3-6 months of household expenses. Then, another 20% of homeownership.

Do you realize how different one would think about finances, realizing between wants and needs all throughout this process? That's all I have to say.

Every time I see a family who wants to take up this journey this way, all the kudos to them.

Yes, this group of people are the few and far between. And there is a bunch of people who choose to take up homeownership this way.

I dont advocate or condemn those who don't do it this way. I serve them as clients too. If my client asks me for my opinion, I will share my heart. But not everyone you serve, you just speak into their lives.

My fear is never being afraid for doing and saying the right things in this business. In the end, I know who provides clients to me.

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Originally Posted in 20% Down Payment... Here's One Realtor's Opinion