AMEN!
My roommate is a Mortgage Broker.I havee expressed interest in buying a home next year and he keeps pushing me to do 100% financing first time buyer BS. I kept telling him I was going to put 20% down and he keeps telling me not to. I tell him I need the mortgage payment down enough where I can pay it and I want to build up equity. He keeps pushing me the other way. I will not go to him when it’s time.
There are some excellent programs for first-time buyers out there. Before deciding on any program you should run the numbers.
When mortgage rates are really low you pay off your principle very fast. Use your computer and run off the payment schedules on a 5% versus a 7% mortgage. There’s a big difference.
Also factor in PMI if you are required to take it.
Every home I ever bought I bought with the knowledge that I can afford the monthly payment. I refinanced every home I ever bought to reduce my monthly payment and put money in my pocket. Every loan I ever took was fixed. Every home I ever bought I bought with no money down because having the cash was more important to me than reducing a 30 year fixed mortgage by 100 bucks a month.
As much as people got talked into buying homes with these 20-10-10 mortgages or variable rate mortgages, I believe more people tried to game the system, get the mortgage, get the hosue, flip the house at a profit and pay off the loan.
When the market went south, these people got screwed and now they are using the “women and minorities hardest hit” excuse to get compensation.