DEQ's
Rodkin Discusses Saving for a Home Versus Alternate Loans and PMI
Posted September 27, 2011, at 10:38 a.m.
Send Dennis your real estate questions at dennis@rodkin.com.
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Deal Estate: The Blog is the online extension of Chicago magazine’s monthly “Deal Estate” column, which is written by Dennis Rodkin. On the blog, Rodkin—who has been covering the local housing scene for Chicago since 1991—provides timely updates on new homes to hit the market, recent high-end sales, and other residential real-estate news from the city and suburbs.
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Got a hot housing tip? Contact Rodkin at dennis@rodkin.com.
Follow Dennis on Twitter at twitter.com/dealestate
And with our friends at CLTV's HomesPlus
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I think the answer is just missing a few points. I've seen buyers get 95% conventional financing, and not to mention the FHA loans that only require 3.5% down. Of course, you still pay the PMI, but these options are out there.
Also, you mention that home prices may not spike in the 4-6 years from now that it will take them to save their downpayment.... BUT... will mortgage rates be as low as they are today? For example, a $200k loan at 4.5% today will cost you just over $1000/mo in P&I. But a $190k loan (let's say prices continue to drop) at a 5.5% rate (let's say rates go up in that time)will cost closer to $1100/mo. So.. home affordability isn't just dependent on home price, but also rates. And rates today are at an unprecedented low.