Will I really need 20% down for a home?
This post comes from Marilyn Lewis at MSN Money.
Some people are freaking out over talk that 20% down payments could become a new requirement for buying a home.
Washington Post columnist Michelle Singletary, for example, worries that "Proposed 20% down payment rule could put owning a home out of reach for many."
Mortgage columnist Kenneth Harney says :
Opponents have estimated that the combination of restrictions would squeeze the majority of first-time buyers out of the market, along with anywhere from 30 to 40% of conventional mortgage borrowers overall. For minority group and moderate income loan applicants, it would erect a nearly insurmountable roadblock -- and eliminate any possibility of a robust housing recovery.Well, freak no more. Yes, indeed, the possibility is being floated. Federal regulators have been talking up the idea while considering how to rewrite consumer rules for government-backed mortgages, the cheapest kind.
But while the final rule is not yet written, it seems unlikely to pass because of vociferous reaction against it.
Correcting sloppy lending
Not that it's a completely crazy idea. Supporters "say the new regulations represent a return to practical underwriting standards and would dissuade lenders from making and selling risky loans," writes the Post-Star , in Upstate New York.
The Post-Star talked with Glens Falls National Bank and Trust Co. CEO Tom Hoy, who thought "the long-term effect could be positive."
"People are consumed with the philosophy that everybody has to have their own home. But if we push people into situations they are not able to handle, it creates the debacle we had," Hoy said of subprime mortgages.Seeking Alpha blog recently pointed, in a posted entitled " One chart that explains the entire financial crisis ," to a correlation between falling rates of homeownership in the U.S. and the rising home purchases with 3% down payments.
Need for change
To understand the need for change, dial your Way Back machine back a few years to the housing bubble, circa 2003 or 2004 or 2005, and remind yourself how shoddy mortgage loans were flying off the shelves at mortgage lenders. Post continues after video.
Your gut told you there probably was something wrong with these get-rich-quick real-estate deals but it was pretty impressive watching your neighbors flip homes and vacation off their home equity .
Cheapest Home Equity Loan Rate - News
Your gut told you there probably was something wrong with these get-rich-quick real-estate deals but it was pretty impressive watching your neighbors flip homes and vacation off their home equity. Fast-forward to 2010 when the Dodd-Frank Act was signed
Mortgage costs are near historical lows, with lenders offering 30-year fixed-rate loans at about 4.2% to Californians seeking $400000 mortgages, online home-loan specialist Lending Tree said Thursday. But most of the lucky homeowners who still have
FirstBuy will see the Government and housebuilders provide buyers with an equity loan of up to 20 per cent, meaning potential buyers will have to put up a 5 per cent deposit to qualify for a 75 per cent mortgage. Borrowers face a tough decision on this
In addition, banks' lending criteria have tightened significantly since the boom years, real estate agents and economists said, and so-called jumbo and adjustable-rate loans remain difficult to secure. The loss of home equity also is keeping homeowners
Falling values have erased trillions of dollars in wealth for Americans who have kept their houses, spurring consumers to save more and spend less and robbing entrepreneurs of a tried-and-true tool--home-equity loans--for starting or expanding a small
Home Equity Loan Cheap Finance With Ease
A sweet home becomes sweeter when it acts as an asset during tough times. Home equity loan provide borrowers with a solution to release the equity in their home. You need not sell your home to get the money you need. This particular loan will be secured on the borrower’s home, without affecting his or her existing mortgage. These loans allow people to borrow the money at relatively low rate of interest and manageable monthly payments. The biggest advantage of a home equity loan is that interest on it is tax deductible. With a home equity loan, one can borrow a percentage of his or her home’s value. A borrower can use this loan for any purpose.
Such loans can be used for making improvements at home. These improvements may increase the value of the home. Home equity loans have become increasingly popular in the past few years. With property values rising, more people have realized the benefits. They allow you to borrow a certain amount of money, using your home’s equity as collateral. Most people use this amount for debt consolidation, college educations, vacations or car purchases. It is a secured loan. All secured loans are cheaper in terms of the rate of interest. This secured loan is appreciated over other loans because lenders are more lenient about the terms and conditions.
The home owners can utilize this financial help for any purpose as it is cheaper than most other types of loans. The home equity loan application requirements are quite simple. The additional details for equity loan application include the proof for ownership of home, and the proof for your current equity in home. The main advantage of these loans is its longer repayment periods. Most of the people intend to apply for such loans, in order renovate or reconstruct their home. Don’t apply for these loans just for the sake of it. Apply for it when you are in an emergency or in a need of money. These are also known as second mortgage loans. Such loans help a borrower get the cash in their home without selling it.
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