some of the silly things that people believe and promote

[miamited]

Down-payment. Any good lender is going to demand that the borrower has skin in the game so a down-payment is going to be most likely needed and that can be difficult.

Hey WIP

No, that's not a requirement. Mortgage companies still make low or no down payment loans. They're just more expensive. It will add a PMI premium to the total payment and likely a slightly higher rate, but that is now governed to be removed when a borrower does get 20% skin in the game.

So a borrower with good credit can still get a mortgage and will still be coming out better than rented in the long run, but the initial, first 5 years or so if one works to pay down the initial mortgage balance, will generally still be better off 30 years down the road than they would have been had they continued to rent and have nothing to show for it 30 years down the road.

 

[miamited]

WIP. And there are ways around the PMI, if memory serves me right and mortgage companies still operate as they did when I was shopping for them.

1. Borrow the money from family or really good friends.

2. Take out two mortgages. One small mortgage for the 20% value and then another for the big one.

Yes, this takes a bit of careful planning, but it does provide a way for someone to be a homeowner rather than a home renter without the need for a big chunk of money to get into home ownership.

And even renters generally need to have some savings to move. They are going to need the first, last and deposit money and that can often be 5-8 thousand dollars.

 

[miamited]

The last home I purchased in Miami was just over $200k. This was in 1995 and a $200k home was a pretty nice place then. I only had $30k for the down payment. So I contacted an uncle who was fairly flush and asked him to loan me the additional $10k. He did have to sign a document that he wasn't expecting repayment of the money, but we both knew what we were going to do as regards the matter. I was able to buy the. home with a 20% down payment and 10 years later I sold that $200k home for over $600k. Trust me, if someone really, really wants to buy a home and has resonableally good credit, it can be done.