I read an article the other day that stated the time of buying a home with no money down will soon be a thing of the past. We bought our house with no down payment. It enabled us to get a home sooner and we have been making our payments without a problem since. For us, it worked out well. It is becoming more difficult to get a mortgage today than it has been in recent years, due to the recent high rate of default. Many of the subdivisions in our area have a high rate of default and I believe there are 2 reasons for it. They are a high percentage of loans that do not have fixed interest rates and reduced lending requirements. There were a large number of people that were given loans that could not afford them for the long haul. Loans without fixed rates will have payments that go up at some point in time. Many lenders will allow you a payment that is actually more than you can afford. You should try to keep your payment at about 25% of your gross income.
Tags: mortgages, mortgage default, foreclosure, lending requirements, fixed rate mortgages