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Is a loan for 100% of home value ever a good thing?

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  • Is a loan for 100% of home value ever a good thing?

    Serious question.
    There is a loan company offering Veterans 100% loan to value loans.
    What happens to the H.O. if the market crashes again?
    Rightly are the simple so called.

  • #2
    Don't call me no HO.
    ..................................................
    Just because you do not take an interest in politics doesn't mean politics won't take an interest in you.

    ...Pericles

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    • #3


      I know people get themselves into a situation. But this out is almost never going to be a good situation in the end.
      bildette and I were talking about house pricing the other day. It has gotten out of hand and most can never really have a place of their own now. I feel a lot of homes are over built in size and it reflects in the pricing. I bought my brother out on our family home when mom died for 25000 dollars. Original selling price when new in 1964 was 16500 dollars. It is now taxed on 320000 dollars. Nice return on our money. Not everyone with kids can drop for that price these days....but we know what happened when they started putting 20000 dollar a year families into 300000 dollar homes. The numbers don't work.
      Last edited by bildo; 10-25-2017, 08:22 AM.

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      • #4
        The only time getting that kind of loan is ok is if you know bankruptcy is on your radar soon, sad for the banking system to offer such upside down loans.

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        • #5
          Originally posted by TrumpIsGreat View Post
          The only time getting that kind of loan is ok is if you know bankruptcy is on your radar soon, sad for the banking system to offer such upside down loans.
          If it's being offered to veterans only then you can bet the government will pickup the loss. Or, it could be like a student loan where you can't BK out of it.

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          • #6
            What is the projected income source from the borrowers? What is the loan size limit? What kind of interest rate?

            Zip
            665 - Neighbor of the Beast

            Originally Posted by RobRoy: I believe that the only way Obama will remain in power is if he suspends elections. And at that point he is no longer president. He is dictator. But I don't believe he will even survive that long. It could be suicide, impeachment by BOTH parties, you name it.

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            • #7
              Originally posted by TrumpIsGreat View Post
              The only time getting that kind of loan is ok is if you know bankruptcy is on your radar soon, sad for the banking system to offer such upside down loans.
              Have you ever taken out a mortgage?

              I bought my house 16 years ago when the subprime boondoggle was at peak. I bought a $250,000 house with $3000 down.

              The bank told me they'd lend me as much as $350,000 at the time. I forget the interest rate but it wasn't kind.

              We went with the 250K loan because the wife and I figured we could still handle the payments if one of us lost our jobs.

              The economy crashed and the house lost $75 K in value. My wife was laid off and didn't work for a year and a half. I managed to keep my day job and we made the payments. According to Zillow the house is now up to $430 K in value (I wish!) and payoff is down to $140K. We managed to keep the house through the recession and frankly I look at the property as my cash out for retirement.

              So I disagree that a zero interest loan is for those who anticipate bankruptcy. It depends very much on the specific circumstances.

              Zip
              665 - Neighbor of the Beast

              Originally Posted by RobRoy: I believe that the only way Obama will remain in power is if he suspends elections. And at that point he is no longer president. He is dictator. But I don't believe he will even survive that long. It could be suicide, impeachment by BOTH parties, you name it.

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              • #8
                Not black/white answer.

                If the house is under-priced and the borrower is leveraged in higher earning assets, then zero down mat be a good deal.

                Most banks have pretty strict LTV standards as a matter of external regulations.

                VA loans lower the risk to the lender, and are a great way for service members to start building credit and acquire an assett.

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                • #9
                  Originally posted by nedezero1 View Post
                  Not black/white answer.

                  If the house is under-priced and the borrower is leveraged in higher earning assets, then zero down mat be a good deal.

                  Most banks have pretty strict LTV standards as a matter of external regulations.

                  VA loans lower the risk to the lender, and are a great way for service members to start building credit and acquire an assett.
                  Right.
                  As always in these matters, it depends.
                  Add to what ned says above, zip suggests that you need to consider:
                  'What is the projected income source from the borrowers? What is the loan size limit? What kind of interest rate?'
                  To you I'm an atheist; but to God, I'm the Loyal Opposition.

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                  • #10
                    Originally posted by nedezero1 View Post
                    Not black/white answer.

                    If the house is under-priced and the borrower is leveraged in higher earning assets, then zero down mat be a good deal.

                    Most banks have pretty strict LTV standards as a matter of external regulations.

                    VA loans lower the risk to the lender, and are a great way for service members to start building credit and acquire an assett.

                    Would this be considered predatory in your opinion? Not being snarky.
                    It doesn't seem right to me to put yourself at risk in this economic climate.

                    Rightly are the simple so called.

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                    • #11
                      Originally posted by Zipperhead View Post

                      Have you ever taken out a mortgage?

                      I bought my house 16 years ago when the subprime boondoggle was at peak. I bought a $250,000 house with $3000 down.

                      The bank told me they'd lend me as much as $350,000 at the time. I forget the interest rate but it wasn't kind.

                      We went with the 250K loan because the wife and I figured we could still handle the payments if one of us lost our jobs.

                      The economy crashed and the house lost $75 K in value. My wife was laid off and didn't work for a year and a half. I managed to keep my day job and we made the payments. According to Zillow the house is now up to $430 K in value (I wish!) and payoff is down to $140K. We managed to keep the house through the recession and frankly I look at the property as my cash out for retirement.

                      So I disagree that a zero interest loan is for those who anticipate bankruptcy. It depends very much on the specific circumstances.

                      Zip
                      Yep, I have bought and sold 6 houses so far and am listing this house today for sale so i can buy another one as soon as possible. The market is booming since President Trump took over. Unlike the last 8 years, it took me 3 years to find a buyer under the last administrations bs. I am not in an argumentative mood ever, so whatever you say is right. Of course buying anything with a zero interest rate would be a great deal, if you can afford the payments. The advertisement for these VA loans make it pretty clear who they are going for. They start off with, are you under water on your house, do you need money to pay your high interest credit cards off etc....And then they give you an out, we loan veterans up to 110% of your home value so you can take vacations, buy new TV's, pay CC off etc...If you can't afford your current payment, have loaded your CC and live from check to check we can help. I never ever recommend it. BTW, I paid cash for this house with the equity I made on the last one, so don't ask me if I know what I am doing again please.
                      Last edited by TrumpIsGreat; 10-25-2017, 09:58 AM.

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                      • #12
                        Originally posted by Zipperhead View Post

                        So I disagree that a zero interest loan is for those who anticipate bankruptcy. It depends very much on the specific circumstances.

                        Zip
                        Who said anything about a zero interest loan?

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                        • #13
                          Originally posted by Telecruiser View Post

                          Who said anything about a zero interest loan?
                          Sorry my mistake. Zero money down is what I meant to say. Thanks for the correction.

                          Zip
                          665 - Neighbor of the Beast

                          Originally Posted by RobRoy: I believe that the only way Obama will remain in power is if he suspends elections. And at that point he is no longer president. He is dictator. But I don't believe he will even survive that long. It could be suicide, impeachment by BOTH parties, you name it.

                          Comment


                          • #14
                            Originally posted by TrumpIsGreat View Post
                            The market is booming since President Trump took over.
                            Dow is down 130 points right now. Do you blame Trump?

                            Zip
                            665 - Neighbor of the Beast

                            Originally Posted by RobRoy: I believe that the only way Obama will remain in power is if he suspends elections. And at that point he is no longer president. He is dictator. But I don't believe he will even survive that long. It could be suicide, impeachment by BOTH parties, you name it.

                            Comment


                            • #15
                              Originally posted by Zipperhead View Post
                              Dow is down 130 points right now. Do you blame Trump?

                              Zip
                              Zip, I am not going to piss in that bucket with you, heck I thought we were getting along. I don't argue, just state my state. This thread is about whether a fellow member should invest in one of the biggest investments ever. I feel it my responsibility to shed light on what I consider border line predatory loans, especially to fellow service members. Ok with you? And, BTW, since this thread is about the housing market, i was referring to the HOUSING market, it is booming, I have realtors begging me to sell because they want more homes. Ha, I am listening to the 'newdaylending' commercial right now.
                              Last edited by TrumpIsGreat; 10-25-2017, 10:29 AM.

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