Taunya Fagan Bozeman Real Estate Blog: Bozeman Information and Listings: The 4% Mortgage Solution - From Publisher of Dream Homes Magazine - Blassis

The 4% Mortgage Solution - From Publisher of Dream Homes Magazine - Blassis

   Warren Bufett: "I don't think it's getting worse. I think what people want to do is make it get worse."

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What do you think about this 4% Mortgage Solution?

By Michael Blassis, Publisher, Dream Homes Magazines

All Existing Mortgages

  • Provide 4% Interest-Only loans to ALL homeowners with an existing mortgage from an accredited institution on their primary residences for a five-year term regardless of the homeowner's credit rating. After the first five-year term is up, the maximum interest rate increase is limited to 1% for one more five-year term. After that, the homeowner will refinance based on the market.
  • If a home is currently valued for less than the homeowner paid for it, the 4% solution will stop the current slide in home prices and the home should be worth its original purchase price or more within the five years.

New Buyers

  • 10% down for first-time buyers.
  • 20% down for move-up buyers.
  • 25% or more down NO docs. The buyer has real skin in the game. The lender should not have to worry about the buyer walking away from the loan because he or she has more than a fourth of the equity. No-docs loans are very important for small businesses and freelancers who have difficulty providing documentation of their incomes since their incomes change year to year.
  • 4% loans will enable buyers to afford higher-priced properties, further stimulating and supporting home prices.

Eliminate Computer Zestimates

Government Tax Benefit

Minimum Overhead and Bank Profits

Conforming Rates

No More Toxic Loans 

The complete article, with much more information, is at Dream Homes Magazine

 

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Comment balloon 4 commentsTaunya Fagan • October 10 2008 10:39PM

Comments

Taunya, interesting... my concern would be that implementing a short term loan on a widespread scale may just delay the inevitable.  Why not just make it a 15 or 20 year term, by then many will have moved or rrefinanced and it wouldn't be a big deal.

I think you could kiss the return on your CD or savings account Good-bye though!

Posted by Garren Grup, REALTOR, ABR, CNE,CDPE, GRI, Naples & Bonita Springs, FL (John R. Wood REALTORS) about 10 years ago

Thanks for taking the time to respond, Garren...I was hoping the entry would garner some interesting pros and cons...

Posted by Taunya Fagan, Bozeman Real Estate: Luxury Homes, Land, Ranches (ESTATE House, Bozeman Real Estate) about 10 years ago

I think the pros are that it would stop the slide of people in ARM's but in the end any action taken by the governemnt to save loans that people can't afford only devalues the loans of people who are amking their paymetns on time...I do agree that they need to do away with AVM's since they are mostly out of touch with what the market is really doing.  I think something that is at the heart of the problem is jumbo loans and how they relate to private mortgage insurance.  We can no longer do N/O/O  properties with MI and on top of that I/O products are now being removed from major lenders...The lending enviornemnt is rewarding mistakes to try and avoid a shrinking of credit and values but you can't stop a market from behaving the way it needs to to correct itself.  Just my 2 cents always enjoy your blog...

Posted by Nathan Goodman (Ranch & Resort Group) about 10 years ago

Thanks for reading, Nathan. There is no good solution is there?

Posted by Taunya Fagan, Bozeman Real Estate: Luxury Homes, Land, Ranches (ESTATE House, Bozeman Real Estate) about 10 years ago

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