I don't want to be perfect, just better...

Monday, November 10, 2008

O’Neill: 20 percent down or no mortgage

Former Treasury Secretary O'Neill has thrown down the gauntlet (not literally).

He says no one should get a mortgage with out a 20% down payment.

I think that it is a great idea especially for low income and people with poor credit histories who wish to purchase a home. I think it shows determination and foresight if you show up to the table with twenty percent down.

However it would create an enormous burden on some especially those who live in expensive metropolitan areas (like me). Home prices average here average $600,000. So for me to purchase an average home I would need a down payment of $120,000.

I think twenty percent down is a great sentiment however you have to consider how unreasonable that is in certain areas of the country. I am all for stringent rules and regulations for the mortgage and financial industries and for those of us who need to engage their services.

Do you think twenty percent down is reasonable or unreasonable?

Do you think your down payments (car, home, boat, etc) should be based on your credit score?

Do you think there should be a certain age at which you should buy a home?

I mean people always would tell me to wait until I was financially stable to purchase my first home. Then the advice became "you should buy before you get priced out of the market". It was those words that spurred the housing boom everyone feeling like if they didn't buy right now then they would never be able to afford a home, couple that with exotic loans and boom we have some of the reasons the economy is on the slump.

Now people are saying buy, because the home prices are correcting themselves. Its the best time to buy, why are 'people' always encouraging you to spend money, this is not the time to blow money frivolously. I know you have to have seen the people living in their cars, and in shelters or living double with relatives or taking in boarders because they have lost their home or are on the verge of losing their home. I don't want to be in this situation, and I fear I would be in this situation if I rushed in to buy one of these homes that are readily available now. It is the keeping up with the Joneses mentality that we should have shed in the fifth grade. I am beginning to think we are all on the inside a fifth grader.

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