Launderess,
Five percent down is probably the minimun people will be asking up front. Around here, a TV news report said that lenders have gone back to requiring 20% down for new purchases. They are that gun shy. Anything under 20% requires mortgage insurance, and I guess the mortgage insurers have taken it on the chin lately. Not that they probably don't deserve it and not that they probably can't afford it.
When I bought in '97, I was able to put 20% down (thanks, booming high tech stock) and avoid mortgage insurance. Even so, my initial fixed loan rate was 8.25% with points (I forget, I think it was around 1.5% points). Over the years I've been able to do a series of "no-cost" refi's with the same bank. The last refi, in 2003, got me down to 4.875%, fixed, on a 15 year, no points no fees. That turned the entire purchase into a 22 year mortgage and I'll be paid up a year after my official retirement age. It's my only long term debt. I paid off my student loans about 20 years ago, and pay off any credit card balance in full every month. Although some brokers were pushing variable rate loans on me, I spurned them, remembering what happened in the late 70's and early 80's to variable mortgage rates.
Funny, back in '99, Suze Orman was advising people to rent, not buy. I wrote her a note saying I thought she was wrong - and she was. It was a great time to buy into real estate. My own home value has at least doubled since '97, even with the recent leveling off of the market. Of course she never replied; I didn't expect a reply. But it was the last time I read her stuff or watched her on the TV. By around 2001, the window had slammed shut, and home prices began skyrocketing. Maybe she was just prescient... lol... but I think, rather, she was just clinging to untimely homilies about how home ownership can be more costly than renting (it can).
Perhaps this is the time of another real estate buying opportunity. I don't know. My guess is that people will be buying if they can afford it without going into risky debt. There are just too many real and intangible benefits to owning your own home, even with high prices and tight credit. And, compared to 1997, mortgage rates are still very reasonable today.
Five percent down is probably the minimun people will be asking up front. Around here, a TV news report said that lenders have gone back to requiring 20% down for new purchases. They are that gun shy. Anything under 20% requires mortgage insurance, and I guess the mortgage insurers have taken it on the chin lately. Not that they probably don't deserve it and not that they probably can't afford it.
When I bought in '97, I was able to put 20% down (thanks, booming high tech stock) and avoid mortgage insurance. Even so, my initial fixed loan rate was 8.25% with points (I forget, I think it was around 1.5% points). Over the years I've been able to do a series of "no-cost" refi's with the same bank. The last refi, in 2003, got me down to 4.875%, fixed, on a 15 year, no points no fees. That turned the entire purchase into a 22 year mortgage and I'll be paid up a year after my official retirement age. It's my only long term debt. I paid off my student loans about 20 years ago, and pay off any credit card balance in full every month. Although some brokers were pushing variable rate loans on me, I spurned them, remembering what happened in the late 70's and early 80's to variable mortgage rates.
Funny, back in '99, Suze Orman was advising people to rent, not buy. I wrote her a note saying I thought she was wrong - and she was. It was a great time to buy into real estate. My own home value has at least doubled since '97, even with the recent leveling off of the market. Of course she never replied; I didn't expect a reply. But it was the last time I read her stuff or watched her on the TV. By around 2001, the window had slammed shut, and home prices began skyrocketing. Maybe she was just prescient... lol... but I think, rather, she was just clinging to untimely homilies about how home ownership can be more costly than renting (it can).
Perhaps this is the time of another real estate buying opportunity. I don't know. My guess is that people will be buying if they can afford it without going into risky debt. There are just too many real and intangible benefits to owning your own home, even with high prices and tight credit. And, compared to 1997, mortgage rates are still very reasonable today.
