I’m a bit perplexed about something. Back in the good ole’ days, when Americans weren’t buying McMansions and didn’t feel the sense of entitlement that they do today, people would put 20% down to purchase a home or a condo. The rest would be financed.<\/p>\n
As the economy soared in the 1990’s and 2000’s, that threshold was reduced to 10% and 5%. As real estate prices skyrocketed to absurd levels, mortgages were offered with no money down. Now, I’m the first to admit that I find that insane. And, quite frankly, I feel no sympathy towards the people who purchased homes well beyond their means when they couldn’t even prove themselves capable of saving enough money to put down even a modest down payment. I mean, come on, the fact that you had no money saved to even purchase a residence in the first place should be the biggest warning sign to any lender that you’re not ready for ownership.<\/p>\n
Anyway, although I find “no money down” to be absurd, in areas of the country where real estate is rather high (northeast, west coast, etc…) I can understand requiring 10% down.<\/p>\n
But now with banks no longer lending as freely as they once did, and the economy effectively in the shithole, banks are\u00a0increasing the down payment requirement to 25% for condos. TWENTY-FIVE percent! That’s insane. Considering Boston area condos start in the $200K range and can go for as much as $500K for a decent 2 bedroom place (even in areas like Somerville, Medford, and Arlington), this means some people will need to have $50,000 to $125,000 (or more) in cash up front.<\/p>\n
Add to that the fact that you should\u00a0keep a reserve of 3-6 months worth of expenses\u00a0in savings, and this is going to severely limit the ability of many (if not most) people to purchase a new residence. I thought the whole purpose of these stimulus packages was to increase bank\u00a0lending and increase purchasing? If somebody has 10% ($50,000 in cash), plus 6 months in reserves, plus a solid job, plus a stellar credit rating….shouldn’t they be able to buy?<\/p>\n
I don’t think there should be exceptions to the rule…that’s how this whole mess started. But is it too much to ask to just\u00a0implement some realistic rules in the first place?<\/p>\n","protected":false},"excerpt":{"rendered":"
I’m a bit perplexed about something. Back in the good ole’ days, when Americans weren’t buying McMansions and didn’t feel the sense of entitlement that they do today, people would put 20% down to purchase a home or a condo. The rest would be financed. As the economy soared in the 1990’s and 2000’s, that […]<\/p>\n","protected":false},"author":74,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1949","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/archive.blogs.harvard.edu\/snarl\/wp-json\/wp\/v2\/posts\/1949","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/archive.blogs.harvard.edu\/snarl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/archive.blogs.harvard.edu\/snarl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/snarl\/wp-json\/wp\/v2\/users\/74"}],"replies":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/snarl\/wp-json\/wp\/v2\/comments?post=1949"}],"version-history":[{"count":0,"href":"https:\/\/archive.blogs.harvard.edu\/snarl\/wp-json\/wp\/v2\/posts\/1949\/revisions"}],"wp:attachment":[{"href":"https:\/\/archive.blogs.harvard.edu\/snarl\/wp-json\/wp\/v2\/media?parent=1949"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/snarl\/wp-json\/wp\/v2\/categories?post=1949"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/snarl\/wp-json\/wp\/v2\/tags?post=1949"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}