Quote:
Originally Posted by Boomer
Exactly right. It’s not required. The style of writing is making it sound that way though.
The article’s headline says, “Cities Where You Will Need the Biggest Down Payment to Snag a Home.”
The article is a classic example of writing based on a keyword search or an algorithm by someone with no first-hand knowledge, but with space to fill. The word ‘need’ is misleading. More cash buyers and big down payments? Yes. But the reasons are unique to TV and topping the list skews the other rankings.
Word choice matters, real information does too — but nobody much seems to care anymore.
Boomer
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I think most of us have been on both sides of the issue. We sold our previous home in another state. The deal was full price and a cash deal-that was roughly 10 years ago.
A great deal for us. We all know of cases where you draft a contract, the property is essentially off the market and then the buyer can't get a mortgage. Perhaps, the house does not appraise for that value or the person overstated income, understated debt etc.
A large down payment, vastly reduces the bank's risk but does not reduce the interest charged. It may prevent your paying mortgage insurance. You are paying to insure the bank's risk.
Real estate is truly different financial world. No other loan is, can be so highly leveraged.
Interest can be deductible. The real owner is often the bank. The person whose name is on the deed, cannot pack up the house or land and move it to another state or country.