Quote:
Originally Posted by LuxLiving
disneysteve, educate me/us. Why would you never finance 100%?
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I think that takes a big, unnecessary risk. Look at the current housing mess. People financed 100% of the purchase and then the value of the home dropped 10 or 15 or 20%. Now they are stuck in a home that is worth thousands less than they paid. They can't sell because they wouldn't get enough to pay off the mortgage. Even worse are the ones who used creative financing hoping to sell or refi before payments shot up, but that is a seperate issue.
If you bought a 300K home with 60K down and a 240K mortgage, even if the home dropped in value by 20%, you'd still be able to get out if you had to (assuming you could sell the place of course). If you bought that same 300K home with a 300K mortgage and the value dropped to 240K, you're screwed unless you can come up with that 60K on your own. I suppose if you kept that 60K invested somewhere and could access it if you needed to, that would work. Just not the way I would advise doing things.
I guess I'm just more traditional and conservative.
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