posted on Feb, 13 2012 @ 02:37 PM
I am currently shopping for my second home.
I have a substantial down payment (20-25%) and am purchasing a second home as an investment (buyer's market, folks!).. I mention this to give an
example of the PROPER way to purchase a home.
These idiots getting homes at 3.5% down are typically losing tens of thousands in interest over the course of their loan. These loans aren't good for
the consumer - and the solution really is to just let the market alone to recover on it's own. More often than not these low down payment loans are
adjustable rate.. That means when the FED raises the Prime Rate (an inevitability within the next couple of years) your crappy 8% APR home loan
becomes a REALLY CRAPPY 15% APR loan..
Banks LOVE these kind of customers because they have an opportunity to make a metric **** ton of money off the higher interest. If the home owner
defaults, the banks repossess the property and sell it again. The bank can also claim this as a loss on their books, get a nice tax credit for it, and
still retain the property. Banks stand to make a fortune getting people into homes in today's market, pulling the carpet out from under them when the
market recovers and home values return to normal. With this cyclical earning potential it's no mystery why banks are willing to take risks on bad
Consumers need to educate themselves and stay away from these predatory loans. You are almost selling your soul when you get a non-traditional home
loan. Buyer beware! For the amount you are spending in additional interest you could pay off your bills, repair your credit, save up a down payment,
and get into a home YOU WANT at a reasonable rate and with a greater chance of successfully keeping the home.
edit on 13-2-2012 by TinkerHaus because: (no reason given)