No Money Down To Buy A House? No Problem!

by Silicon Valley Blogger on 2007-03-198

Trying to qualify for a mortgage loan? Want to get the best home loan rates? Before you do, read this piece.

You don’t want confrontation. You don’t want to get sucked into difficult arguments with your spouse, so when your wife and real estate agent collude, you give in, and sign your future away. Next thing you know, you’re paying for things like property taxes and home warranty insurance. Sadly, that’s the scene that was repeated in many households in the last few years. And till last year, everyone looked like a winner. With subprime mortgages less available in today’s climate, the blow to the real estate market is just beginning to be felt; it’s a much different story now, which makes this scene all the more ridiculous to watch today.

I’m sure you’ve seen this commercial floating around before. At this time, it’s pretty passe as it’s been replaced by the wailing and gnashing of teeth of people caught in the clutches of the disintegrating real estate market. It just shows you how things can turn on a dime within a short period of time; I remember catching this “Suzanne Researched This” commercial not that long ago and thinking, “Wow! Now that’s scary.” I thought whoever was behind this commercial had the nerve. Especially since I very well felt strongly how it was then the peak of the real estate bubble and it seemed obvious that there would be some serious payback down the road.

See for yourself and gnash your teeth too…. over what this has probably done to many homeowners today, or is it ex-homeowners? Oh, I’d suggest you watch this video here rather than at YouTube since over there, the comments are quite unsavory. Update: The ad has been pulled from YouTube but there are derivations of it still around. Here’s one of them.

Copyright © 2007 The Digerati Life. All Rights Reserved.

{ 7 comments… read them below or add one }

Shadox March 19, 2007 at 11:25 pm

Ouch! That’s painful. I would imagine Suzzane changed her name to Harry and is currently living as a farm hand somewhere in the farm belt.

The Digerati Life March 20, 2007 at 12:55 am

All I know is that working on a farm is *very* tough work!

Mary Pope-Handy March 23, 2007 at 7:34 am

I have seen both extremes of this situation. A couple of years ago I had some clients working with a lender who was “a family friend” and he helped them with financing the purchases of two homes simultaneously – one here and one (investment) elsewhere. The financing was very risky. I tried talking them out of it but they were anxious to make a huge profit, which the lender assured them they could do. (The lender I work with would NEVER talk people into risky loans.) They did successfully purchase both homes, but it was riduculously stressful to buy a first and second home at the same time, and I believe they have lost money on the remote deal.

The other extreme I also see: folks who can afford to purchase, but the sheer fear of it seems to cause them to freeze. When I saw your film clip, I thought of this example. Of course sometimes people are nudged or guilted into making a bad decision and they buy too much house and make themselves “house poor”. But there are some buyers who could comfortably qualify (with a standard loan and decent ratios) and they just cannot get themselves to the proverbial altar.

The numbers don’t lie. If the prospective buyer has turned in truthful financial paperwork to the lender, and the loan product chosen is not risky, and the ratios are not high, then the purchase should be doable. Some folks freak at the committment, though. And so they continue to rent….

A few years back I sold a house in which there had been tenants. These long term renters had been there not for a few years, not for a decade, but for a full 30 years. What happened? They could have afforded something. Someone should have helped them – or maybe even nudged them. For anyone to rent that long would have to constitute one of the “biggest financial mistakes” list on your site here.

Great blog! Long feedback 🙂

Silicon Valley Blogger March 23, 2007 at 8:43 am

Great comments Mary,
You are right about some of these making it to someone’s list of big financial mistakes. This is the type of feedback that would help readers out. So I appreciate your reporting from the field in such detail! 🙂

Tom Allen July 16, 2007 at 12:51 pm

Considering that buying a house is likely to be the single biggest financial undertaking that most individuals will make in their lives, it always amazes me that a lot of people don’t have a better understanding of the mortgage and real estate industries.

Any information like what you give here that can inform people and help them to make better decisions for themselves is a good thing. I run a mortgage information site myself and I always try to help.

TTFK November 3, 2007 at 2:07 pm

Raising the minimum wage to save the housing market … that has to be the STUPIDEST thing I have ever heard in my life!

This video is the result of the complete and total disconnect from reality.

Dallas Mortgage Broker December 9, 2007 at 1:32 pm

The credit markets have tightened up over the past 6 months. However, some tightening was definately needed. I’ve heard too many stories of people getting loans they weren’t qualified for or could barely qualify if all payments, bonuses, etc… came in as expected. However, as soon as there is any shortgage in cash, i.e. they don’t get their annual bonus, then everything starts to fall apart and credit card debt starts building up. The key to success is to not overstretch yourself with a home mortgage. You’ll be much happier and not so stessed out, especially around Christmas time.

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