It’s a heart-breaking story. A new twenty-something couple purchases their first home with one of those no money down deals. They sell the home a year later build a new home; also on a no money down deal. Twenty four months later the couple sells again and builds another house; you guessed it, no money down. Four years pass, the house has doubled its value. This twenty-something couple has a $100,000 in equity in their new home like magic.
Then the economy falters. New home sales slow just as their income drops. The couple starts selling their possessions to pay the mortgage. They decide to sell the house. No one will buy it. Six months later, their home is sold at foreclosure. Their equity is gone; and their credit is ruined.
The moral of this story: be careful with low interest rates and “No money down deals.”
Refinance a Mortgage – Five Things You Need to Know
Mortgage Calculator
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
