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Downside to 100% financing?

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foofighter74
Established Contributor

Re: Downside to 100% financing?

Very few of these "rules" you'll hear people preaching are one size fits all.  The fact is, everyone's situation is a little different.  If you did 100% financing, and then were forced to sell in 5 years for whatever reason...then you deal with it then.  As for building equity, obviously this depends on how quickly you can pay down a significant amount of principal and what the house is actually worth. 

 

Several years ago, people would be thrilled with a 5 or 6 percent interest rate...and the last thing anyone would want to do, especially those who were planning on staying in their home for 10 or more years, would be take lender credits for closing costs in exchange for accepting a higher interest rate.  But with rates so low, you can take maximum lender credits and still wind up with a great interest rate, and pay little in closing costs. 

 

You can find people who will tell you a 401K loan is a bad idea no matter what the reason for it is. Other people will argue just as passionately that 401k loans can be a great tool to take advantage of when needed.  Opinions vary and there are posititve points on both sides of the ledger about many things in regards to buying a house.

 

Things change all the time.  The industry changes. The financial markets change. Housing markets change.  Your own financial situation changes.  While it's great to plan and have some idea of what you want for the future, the truth is you can't plan for every contingency.  If you're comfortable with 100% financing, then that's all that really matters. 

 

 

Message 11 of 34
playboy
Regular Contributor

Re: Downside to 100% financing?

What if I turned into a smurf and it started raining Jelly beans from the sky?  What if Apple actually caught up to Android in terms of having a mobile operating system that isn't boring................oops.  The value of your home could go up in the next 5 years and you would have equity.  The value could down and you'd be upside down like alot of people today.  You financed 100% and that works for you.  No need to worry about what anyone else thinks bc we're not you.  


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Message 12 of 34
foofighter74
Established Contributor

Re: Downside to 100% financing?


@playboy wrote:

What if I turned into a smurf


 

Then you'd have to try and obtain financing on a 3 bedroom, 2.5 bath mushroom home. lol

 

Message 13 of 34
playboy
Regular Contributor

Re: Downside to 100% financing?


@foofighter74 wrote:

@playboy wrote:

What if I turned into a smurf


 

Then you'd have to try and obtain financing on a 3 bedroom, 2.5 bath mushroom home. lol

 


You're right.  But I could put smurfette on the loan.


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Message 14 of 34
MovingForward_2012
Valued Contributor

Re: Downside to 100% financing?


@foofighter74 wrote:

@playboy wrote:

What if I turned into a smurf


 

Then you'd have to try and obtain financing on a 3 bedroom, 2.5 bath mushroom home. lol

 


Haha!  You two are funny!  Great post foofighter! 

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Message 15 of 34
foofighter74
Established Contributor

Re: Downside to 100% financing?

Actually, Wells Fargo foreclosed on Gargamel's castle....so Smurfette bought it for almost nothing. Smiley Tongue

Message 16 of 34
indecison
Regular Contributor

Re: Downside to 100% financing?


@playboy wrote:

@foofighter74 wrote:

@playboy wrote:

What if I turned into a smurf


 

Then you'd have to try and obtain financing on a 3 bedroom, 2.5 bath mushroom home. lol

 


You're right.  But I could put smurfette on the loan.


Your screen name suggests you should just smurf her not live with her!!!

Message 17 of 34
tooleman694
Valued Contributor

Re: Downside to 100% financing?

I agree if it works for your situation then do it. But there are a ton of negatives about it.

 

And if you are cool with that, then who the hell is anyone to tell you not to do it.

Message 18 of 34
NewbieReed
Frequent Contributor

Re: Downside to 100% financing?


@indecison wrote:

@playboy wrote:

@foofighter74 wrote:

@playboy wrote:

What if I turned into a smurf


 

Then you'd have to try and obtain financing on a 3 bedroom, 2.5 bath mushroom home. lol

 


You're right.  But I could put smurfette on the loan.


Your screen name suggests you should just smurf her not live with her!!!


I always get a good laugh on these forums lol

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Message 19 of 34
NewbieReed
Frequent Contributor

Re: Downside to 100% financing?


@playboy wrote:

What if I turned into a smurf and it started raining Jelly beans from the sky?  What if Apple actually caught up to Android in terms of having a mobile operating system that isn't boring................oops.  The value of your home could go up in the next 5 years and you would have equity.  The value could down and you'd be upside down like alot of people today.  You financed 100% and that works for you.  No need to worry about what anyone else thinks bc we're not you.  


Yea, sure I understand all of this. Thanks for the info everyone. i just wanted to know what everyone thinks about it. In the end, as with everything, I do what I want, but I just wanted to see what the general consensus is on this topic.

 

100% financing may or may not be for us. We are still deciding.

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Message 20 of 34
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