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0 Down Home Mortgage: Not Again!

Updated: Jun 5

Zero Down Home Mortgage

I couldn’t believe my eyes. I saw a news headline claiming no money-down mortgages were back. And then another headline. And another.


For those old enough to be experiencing the frustration of trying to buy a home in this market but young enough not to remember what happened in the years leading up to the 2008 housing crisis, let me provide you with a quick overview. 


Zero Down Mortgage Explained


In the years running up to 2008, lenders figured out clever ways for borrowers to purchase a home with nothing down. This was one of many variables that created a perfect storm, an entirely different subject. 


As it pertains to today, the lenders are back at it. Take this example from United Wholesale Mortgage. 


Example of a Scam Mortgage

What is the Problem?


What this means is that borrowers could be purchasing a home at a short-term peak of the housing market. When (or if) housing prices drop, those borrowers are now upside down on their mortgages. 


This is catastrophic for couples who are forced to move following a job loss or pay cut, because they can't afford to sell their homes, it would cost them too much. Using the example below, it would cost that couple $50,000 out of pocket to sell their home.


What does it mean to be underwater on your mortgage?

 

And that’s not all. Read 6 Reasons to Reconsider Buying a Home for more considerations.


 

What is the Solution?


If you can't afford at least 10% down (20% is strongly preferable), I suggest waiting or reevaluating and exploring homes in a lower price range.


Sure, you can find some cat on TikTok in a ten-million-dollar home he claims he bought with Bitcoin, telling you otherwise, but for most of us, the risk far outweighs the reward.


Of course, you can always continue to rent.


Rent or Buy: How to Decide


One of the topics included in our Marriage Toolkit is Rent or Buy? Our expert contributor is Modern Husbands Advisory Board Member Matt Frey.  Included is the graphic below comparing the cost of buying a home based on two different interest rates.


Should I Buy a House Now?

Marriage Toolkit


Our free Marriage Toolkit preview includes details of how to talk to your partner about money, which should be the first step in preparing to make one of the biggest purchasing decisions in your life. 


The toolkit is designed for couples who want to manage money and the home as a team to empower them with the knowledge and resources to start, strengthen, or rebuild their marriages.

Click here for a free preview of the Marriage Toolkit. 


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