[roob1]

Housing Markets...

[Garywt]

I believe that is because many come to the Villages with money to put down. It is not that it is a required down payment. Also there are no first time buyer deals in The Villages.

[manaboutown]

It is a retirement community. Folks have cashed out of their old homes, frequently pay all cash and usually downsize to lower their overhead.

[Boomer]

Originally Posted by Garywt

I believe that is because many come to the Villages with money to put down. It is not that it is a required down payment. Also there are no first time buyer deals in The Villages.

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

[golfing eagles]

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

There you go again, confusing people with the facts! Just stop it!!!!

[vintageogauge]

There was a statistic printed when we first moved here 4-1/2 years ago that 55% of the homes sold were full cash deals.

[Dana1963]

At our stage in life I couldn’t imagine carrying a mortgage I don’t even like auto loan payments with 0% interest. But then again people love reverse mortgages

[villagetinker]

Originally Posted by Dana1963

At our stage in life I couldn’t imagine carrying a mortgage I don’t even like auto loan payments with 0% interest. But then again people love reverse mortgages

We took the mortgage since our investments are making almost twice the interest rate on the mortgage.

[DAVES]

Originally Posted by Dana1963

At our stage in life I couldn’t imagine carrying a mortgage I don’t even like auto loan payments with 0% interest. But then again people love reverse mortgages

All these things are a matter of opinion. It is a financial as well as a personality decision. Can't imagine carrying a mortgage. People finances and understanding of money are far different. Free of a monthly bank payment? You still pay common charges, taxes, water etc. A mortgage is the cheapest source of money there is. Whatever the amount is do you come out ahead with that money in your house or can it earn more elsewhere?

Auto loan with zero interest. You are usually offered zero interest or $$$$$$ off. Which is the better deal? The answer is usually-it depends.

Qualifying for a mortgage. You need to show income to pay the mortgage. I was amused when I was told to get a letter from my brokerage that they will send me $$$$$$ per month so I could fill in the line on my mortgage application. The bank told me to do this. The brokerage has a form for this. Reality, after you get the mortgage, you can call the brokerage and stop the checks.

There is no shortage of choices. We all need to pick what is best for us understanding risks and rewards.

[DAVES]

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

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.

[JMintzer]

The current (very) low interest rates make carrying a mortgage much more attractive, leaving the funds available for investment gains (which should be significantly higher than the mortgage rates). Add in the interest deduction on your taxes (if your home in TV is your primary residence, or an investment property), and it's even MORE attractive to carry a mortgage...

We put down 25% on our home in TV, mostly because we still own our home up in the DC area (for now)... Once I fully retire and we become Frogs, we'll sell the house (which is paid off), and decide what to do with the remainder of our mortgage.

We may decide to invest in a small condo up here, since that's where the kids live, but we'll make that decision when the time comes, once we see how often we travel back to the DC area...

[JoMar]

Originally Posted by villagetinker

We took the mortgage since our investments are making almost twice the interest rate on the mortgage.

Agree, paying cash just doesn't make sense at this age (77). Plus it is unlikely a 30 year mortgage will be paid off. Paying cash for stuff at todays interest rates and investment return is giving money away.

[manaboutown]

IMHO it can make sense to highly leverage one's home with a large mortgage and it can make sense to own a home free and clear. It just depends.

When I was young, starting out, I always borrowed as much as possible on a home. I itemized deductions so the interest (and RE taxes) were tax deductible. When I sold a home it had inevitably appreciated and its gain could be deferred upon purchasing another home above its sale price within a certain period of time. I then invested whatever cash I might have put down on the home elsewhere. The internal rates of return on my small down payments were fantastic.

In today's tax environment I no longer itemize deductions so cannot deduct interest on a home mortgage. Granted, mortgage interest rates are historically low, around 2-3% so if one can make more on their investments after taxes that option can still make sense. Given stock market performance over the past dozen years one could have done very well obtaining a mortgage and investing cash that could have paid for a home. Homes too have appreciated so perhaps this has been a win, win, win situation. A couple can sell a home and if certain residency and holding period conditions are met pay no tax on up to $500,000 in gain.

On the other hand at my age of 79 I am no longer comfortable with much debt and am happy to live in a free and clear home. It has greatly appreciated, my stock market investments have appreciated. Although I have left some money on the table I have slept well.

[charlieo1126@gmail.com]

14 homes or condos some very expensive, I never put more then 20% down it’s always made financial sense to me and especially during these time of very low interest rates . I just got the last mortgage in April at 82 there’s nothing wrong with good debt

[OrangeBlossomBaby]

Originally Posted by JoMar

Agree, paying cash just doesn't make sense at this age (77). Plus it is unlikely a 30 year mortgage will be paid off. Paying cash for stuff at todays interest rates and investment return is giving money away.

Depends on your investments.

We had to borrow against ours just to afford our house because of our particular circumstances. If we die together tomorrow, our "estate" won't owe anything to our investments (which are actually insurance policies with nice cash values), and it'll get a house that it owes nothing on. No debt collectors at the door of our next of kin demanding their payment.

We have nothing, but we also owe nothing. I personally feel this is the best option when you're older.