Quote:
Originally Posted by tgrundke
Because history (2008) has taught us a few (broad brush) lessons:
1. People who have no skin in the game (NINJA loans, 2% and 5% DP loans) default at exponentially higher rates than those who who make 20% DPs.
2. If you cannot afford a reasonable down payment, statistically, you're going to have a tough time paying for emergency repairs, regular maintenance and upkeep, taxes.
Remember: the argument here is that affordability has been negatively impacted due to 15+ years of artificially low interest rates which have helped to create a speculative bubble.
There are over 12 million "second homes" (vacation homes, AirBNBs, etc.), and that number skyrocketed in the last 7 years thanks to the popularity of the STR fad, made possible by artificially low rates.
Keeping rates elevated for longer will help bring valuations down. It will, however, take some time.
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If you bought a home that wasn't zero down, you have skin in the game. Stop being ridiculous.
I'm not talking about second homes.