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I still don’t understand how people got those loans. Being self-employed, even w/ terrific ratings, I had an incredibly difficult time just getting a minimal mortgage so I’d have some tax benefit. I’d sold my co-op for more than the house cost & had a long-standing relationship w/ the bank. It seems to me that lenders were nuts to fund 100% & borrowers were idiotic to take them.
It totally amazed me that the couple selling the condo took out a 100% finance and then on top of that borrowed to put in another 20-25k. I’m not the most financially responsible person in the world, but that sounds nutty even to me. If you do 100% finance, how in the hell do you manage to get another loan for upgrades? at 100%, you have no equity to tap. WTF?
Gem, yes…I loved how he put it…’Set the market instead of trying to chase the market’ by slashing the price over and over again. I think that show should be required viewing for all current and soon-to-be home sellers.
It wasn’t the taking out of 100% mortgages that “caused” anything. It was the fact that they were carrying too much debt and couldn’t afford the payments when either 1.) they lost their jobs or some of their income or 2.) they had an ARM and it adjusted up and they couldn’t afford the new payment.
Even the fact that they had negative equity in and of itself is not an issue unless thay have to sell the house or can’t make the payments for reasons like 1 & 2 above.
There is nothing inherently wrong with a 100% mortgage as long as the buyer is fully aware of all the risks, and can make the payments. That said, most people did not. Anyone with an ounce of sense knew they were a dangerous leveraging of your personal balance sheet, especially the ARMS.
Snappy,
I don’t think 100% financing per se caused the bubble – more an issue of the absolute numbers involved. That is it was 100% of already inflated prices and was extended to people whose incomes could not reasonably come close to covering their expenses for long, or whose other assets were very limited.
Kens, I know but DH’s sarcasm and kidding radar has not been functioning correctly so have to make sure he aint thinking “WTF, that dirty girl could be in M4L’s bldg?”
I still don’t understand how people got those loans. Being self-employed, even w/ terrific ratings, I had an incredibly difficult time just getting a minimal mortgage so I’d have some tax benefit. I’d sold my co-op for more than the house cost & had a long-standing relationship w/ the bank. It seems to me that lenders were nuts to fund 100% & borrowers were idiotic to take them.
Winthrop – I’m going to the one tonight. Damn Rain!!
It totally amazed me that the couple selling the condo took out a 100% finance and then on top of that borrowed to put in another 20-25k. I’m not the most financially responsible person in the world, but that sounds nutty even to me. If you do 100% finance, how in the hell do you manage to get another loan for upgrades? at 100%, you have no equity to tap. WTF?
Dibs is right
Name all the streets and I’ll put together a mneumonic for you.
Gem, yes…I loved how he put it…’Set the market instead of trying to chase the market’ by slashing the price over and over again. I think that show should be required viewing for all current and soon-to-be home sellers.
It wasn’t the taking out of 100% mortgages that “caused” anything. It was the fact that they were carrying too much debt and couldn’t afford the payments when either 1.) they lost their jobs or some of their income or 2.) they had an ARM and it adjusted up and they couldn’t afford the new payment.
Even the fact that they had negative equity in and of itself is not an issue unless thay have to sell the house or can’t make the payments for reasons like 1 & 2 above.
There is nothing inherently wrong with a 100% mortgage as long as the buyer is fully aware of all the risks, and can make the payments. That said, most people did not. Anyone with an ounce of sense knew they were a dangerous leveraging of your personal balance sheet, especially the ARMS.
Snappy,
I don’t think 100% financing per se caused the bubble – more an issue of the absolute numbers involved. That is it was 100% of already inflated prices and was extended to people whose incomes could not reasonably come close to covering their expenses for long, or whose other assets were very limited.
Kens, I know but DH’s sarcasm and kidding radar has not been functioning correctly so have to make sure he aint thinking “WTF, that dirty girl could be in M4L’s bldg?”