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Old 11-28-2008, 08:32 PM
MortgageOpolis MortgageOpolis is offline
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Join Date: Nov 2008
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Your response would be valid if you were purchasing a home purely as an investment.. like a stock option. However, when individuals purchase their first home.. it's usually because they want to OWN a home and not flip it when prices go up, or sell it when the value drops. Personally, I've had a property that dove in price from $105,000 to $42,000 in 3 years and as timing had it, we were relocating. I considered walking away, but, thought otherwise because of the impact on my credit and future borrowing capacity. We decided to rent it, which just covered the mortgage payment. We sold 8 years later for $148,000. Not only did we make a $43K profit on the sale... the renter paid down our mortgage $30K! My point is that home values go up and down and as long as you're willing to ride it out... you should be okay.
Your response to individuals with zero downpayment, is ignorant in that you're assuming they're irresponsible borrowers. Many professionals such as doctors, lawyers, teachers, etc. graduate from school without any savings, only a good paying job. I've had 2 clients default on their mortgages this year, one individual had $40K down and the other had $80K down. I've yet to have any of my clients who bought with Zero down, default on their mortgage because they do have to have good credit, good employment and they're not short sighted. They realize their home is primarily just that.. their home. Secondly, realestate is an investment and over the long term, property will actually appreciate... it's cyclical like the stock market. Have a look at what is happening in the stock markets... investor's are selling because the value of their portfolio's have plummeted. They lose actual cash the moment the sell! The golden rule when investing is buy low and sell high, not the other way around.

Take Care,
Dave

Last edited by MortgageOpolis; 11-28-2008 at 08:34 PM. Reason: spelling
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