Subject: Re: [Homestead] Bush zero-down payment on houses
Date: Tue, 05 Oct 2004 11:48:51 -0700
An unanswered question remains, he acknowledged: "We have no experience
of how these loans will perform when the market is weak."
Oh really? I wonder if he can take a wild guess.
Indeed. His answer is either an outright lie or he is incompetent. Even my
imperfect memory clearly recalls when southern California had lots of
over-financed places after the big defense budget cutbacks caused
widespread layoffs and PhDs were pumping gas. Foreclosure rates under
varying conditions are well established.
Very-high-percentage mortgage loans require very good credit scores, OR a
government program to insure or guarantee them, in which case we taxpayers
act as insurance underwriters. Non-government loans with less than 20
percent down payment require private mortgage insurance with the premium
paid by the borrower. To beat that, it sometimes makes sense to use a 20
percent second, with attendant higher interest rate, to get the
no-mortgage-insurance first loan. There are a gazillion mortgage plans, one
to fit every purchaser. Rely on a good mortgage broker to help you make the
decision of what is right for you. Know what you will do if you lose your
income, with the knowledge that a foreclosure will probably wreck your
credit score.