Credit Card Center Advertiser Disclosure

Regular Contributor
Posts: 218
Registered: ‎07-29-2007
0 Kudos

Re: And that's another reason I'm buying a home t...

TheNewWorldMan wrote:

twnkltoz wrote:
Many people defaulted on their mortgages because they couldn't afford them.  Their lenders approved them for way more than they could afford, and they couldn't make the payments.  That's why lenders are raising the minimum scores for 100% financing.  Credit history is important.

And that's another reason I'm buying a home the coming months we're going to see a pendulum effect.  The system will over-react (it always does) and we'll go from mortgages being handed out like candy on Halloween to practically NOBODY getting approved.  Banks are going to shy away from high and even medium-risk'll have to have the credit rating of Satan Himself to qualify for a mortgage.  And since for me that's, oh, about thirty years away, it ain't gonna happen.
The one plus side to this for potential homebuyers is that by 2008 to 2009, with all that jive mortgage money pulled from the housing market, demand will slump and housing prices will plummet.  So if you're more fortunate than I am and you have $30,000 or so of cash, or a nosebleed credit rating, you'll be able to get yourself a great deal on a home.

first off Mr. Doom and Gloom:
You come across as an "America is Dumb" type.  Just leave then.  Smiley Wink
Secondly - do you realize that if housing prices "plummet" as you say, many of us won't have jobs with which to buy these homes at ANY price anymore?
From BK to 700 FICOs in 4.5 yrs.
Valued Contributor
Posts: 2,374
Registered: ‎03-15-2007
0 Kudos

Re: And that's another reason I'm buying a home t...

Joe77 wrote:

first off Mr. Doom and Gloom:
You come across as an "America is Dumb" type. Just leave then. Smiley Wink
Secondly - do you realize that if housing prices "plummet" as you say, many of us won't have jobs with which to buy these homes at ANY price anymore?

That may just come to pass.

Housing prices are overinflated in the United States. The cost of housing has consistently gone up 3 to 4 times as fast as wages, for over a decade now. Common sense says this is unsustainable. In order to afford these inflated housing costs, millions of people took out loans that would require substantially higher incomes to repay in the long run. In short, billions of dollars in fiat money was pumped into the economy, creating an asset bubble.

Now reality is asserting itself, and now that the supply of fiat money is drying up, people are confronted with the reality that the real value of their homes did not go from, say, $190,000 to $450,000 between 1998 and today. The Home Equity Fairy didn't apply a layer of gold to their roofs. The actual value of the home is the 1998 price plus your common garden-variety inflation, which would make it, oh, probably around $250,000. Not almost half a mil.

There are two basic ways this can be resolved. The smartest is to allow the laws of economics to assert themselves, and the value of the asset to return to market levels. The only other alternative is for the government to step in and either confiscate money from the rest of the economy to prop up asset prices, or print money and run a deficit to prop up the asset prices. In both cases, the consequences are worse.
- - - -
in a credit-scoring postnuclear Stone Age...

Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.

† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
‡ Credit cards for FICO Score ranges: The score ranges are guidelines based on internal myFICO analysis of actual applicant approvals, and having a FICO Score in a particular range does not guarantee you will be approved for credit cards recommended in that range. These ranges were not provided by any card issuer.

* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.