Buy, Buy OR Bye, Bye! What’s in the Works That Could Keep You From EVER Owning A Home!
Sep 24th, 2010 by Kay
Emails and articles are beginning to contain a common thread that could weave a net and trap you from ever owning a home. Clip that thread now while you still can.
It seems that some are questioning whether our nation is supposed to make it easy to buy a home. Others wonder if it’s the nation’s job to assure homeownership to all.
Are we going back to the day that singles live with parents much longer, and newly marrieds must rent for years to save enormous downpayments before they can afford to buy a home of their own? Ask your grandparents about that!
My question is: If minimum or no downpayments and lower credit scores have created huge numbers of foreclosures, why didn’t FHA and VA financing reveal that many years ago?
(A high percentage of my brokerage work since 1988 has been with first-time and move-up homebuyers.)
Since their inception, both FHA and VA have successfully assured home mortgage loans requiring small or no downpayments, lower credit scores, and all the while loaning higher amounts than conventional financing.
Lowering the nation’s commitment to homeownership could directly affect you. Requiring huge cash outlays could automatically throw a lot of “starters” like you into the net, and assure your hard-earned money increases the landlord’s slice of the cash flow pie.
What was the problem really, and is anything reliable being done about it?
Most agree that many bought homes they could not afford, thus foreclosures grew like an uncontrollable germ.  Both the following changes could directly immunize that virus:
Let’s think about lenders (1) increasing the debt-to-income ratio, and (2) adding a “home maintenance” monthly amount as a “debt.”
Yes, both these changes would lower the buyer’s maximum price, but they would assure he can afford the payment and have some extra cash for unexpected expenses.
I often tell my buyer clients this, “There is life after the closing, be sure you can live it!” It has always been amazing to me that clients tend to find houses they love in the price range they can afford, regardless! How interesting!
Lenders can make these rule changes, or you can make them for yourself. Take control of your financial life. Don’t let anyone push you into a mortgage loan you are not comfortable with!
Buy less than you can afford. You’ll be able to find a home in your “best” price range, and rest assured you can pay for it, and keep it maintained. There is sufficient inventory in the Triad area where I work.