Buyers' down payment funds - Posted by Greg-Sacramento

Posted by Bob on June 16, 2005 at 12:26:12:

Sorry, wrong email addy… try this one bob_smith_17280@hotmail.com

Buyers’ down payment funds - Posted by Greg-Sacramento

Posted by Greg-Sacramento on June 13, 2005 at 21:44:14:

Hello all.
I was wondering if you lenders out there (commercial & private)in the more expensive housing areas could give your impressions of first time home buyers’ ability to come up with a reasonable down payment. By “reasonable” I mean something like 10%.
Here in Sacramento, California, our median house prices have skyrocketed since 2000. Our sleepy little affordable town has been dragged into the high priced housing market (still low priced by Bay Area standards). So it seems first time home buyers are leveraging themselves pretty heavily with adjustables, interest onlys, etc. in order to buy anything.
My interest, as an investor, lies in selling houses to my first time home buyers. I use the lease-option (getting about 3% down) and land contract (8-10% down)for a year or two, then get them refinanced thru a mortgage broker. My problem is that I haven’t done this since '96, which seems like a different life time, now.
I find it hard to believe that wages have increased that much in our town to expect bigger and bigger down payments from these buyers who seem to be stretching to the max already.
Maybe I’m answering my own question here. But what kind of down payments are you folks getting for first timers - including you investors with land contracts or seller financed deals?
What kind of down payment have you folks seen? Any help bringing me into the 21st century would be appreciated.

Re: Buyers’ down payment funds - Posted by Bob Smith

Posted by Bob Smith on June 15, 2005 at 16:23:40:

That’s the thing. You hit the nail right on the head… wages ARE NOT going up, yet RE prices are going up by double digits yearly. There’s one word for this type of situation: Unsustainable.

Imagine if your landlord raised your rent by 20% each year. Would you stay there? Could you afford to stay there? The same thing is happening in the housing market. People are stretching just to buy a dump. They only thing that shocks them is the property tax bill. They’re surprised to see it go up so much… they should have had that same surprise at the asking price of the house.

Re: Buyers’ down payment funds - Posted by rdlazo

Posted by rdlazo on June 14, 2005 at 08:40:20:

I have experience but I think I will
try your Idea. I am in Inland Empire
area of Calif very similar locality
as far as prices which is high but lower
than Orange andd L A area.You might
think you are a newbie(Rookie)
but you have one of the best ideas I
have seen here for a newbies idea.
You just need to perfect it or put
it to near there where you can make
the profit and cash flow you are looking
for. Idea is get back the cash you put in or
little more or less then the cash
flow you are shooting for for your
risk and effort.Your buyers wil be
less picky on the house and they know
they have to pay more becasue of their
poor credit.Though financing to many
is available you still have niche
once you learn how financing
goes with people short of cash
and middle FICO below 620.
People with low FICO will be
disappointed with the rates and
trouble of getting loans. Comparison
is high rates and high closing cost
with low FICO home buyers while if
you get it or buy them subject to with
no closing cost and reasonble rates
then yo can sell them at higher rates
and just make your buyers put 3 to 5%
option and closing cost money then
you will be alright. Raise their payments
higher than your monthly payments for
your cash flow.
If you are capable of getting a
license you have advantage of getting
commission on purchase side and maybe
commission on the loans too to help you
for the front money if the property you
are buying is listed with a broker.
E mail me for more ideas.
rdlazo

Re: Buyers’ down payment funds - Posted by Devon Daughety

Posted by Devon Daughety on June 14, 2005 at 24:02:16:

I am in the Northern VA/DC Metro area market which is definitely an expensive market (you can’t even get a 1200 sq. ft single family home thats 100 years old for less than $500K). Anyways, I am a mortgage broker myself and it seems as though the younger professionals and first time homebuyers are buying with $0 down financing. The new generation isn’t really saving as much as the older generations that is for sure. And new loan programs came out where you can get 100% financing with credit scores from like 575… which you probably know is extremely low… so pretty much anyone can get financed. If i can be of any more assistance, shoot me an email. Thanks,

Re: Buyers’ down payment funds - Posted by Greg-Sacramento

Posted by Greg-Sacramento on June 16, 2005 at 10:54:46:

Bob,
I sent you an e-mail. It didn’t go thru.

Re: Buyers’ down payment funds - Posted by Bob Smith

Posted by Bob Smith on June 15, 2005 at 16:18:48:

Don’t save as much??? Perhaps that’s because they don’t earn as much? My Dad (baby boomer) was a high-school drop-out who made 40 - 50K as a machinist for Westinghouse in the 1980’s. All of those kind of jobs (think high paying) are now in China and/or India. I’m a college grad with BA in Math and Business (Phi Beta Kappa). I earn 38K per year and my health insurance goes up double digits yearly… just like houses do. How’s that for a bit of perspective? Younger generations don’t save because they earn far smaller sums of money when compared to previous generations. The party for America is over.