why do people expect not to lose their home if they don't save a dime for it?

Question

putting a few thousand on a home don't secure you owning a home, why do people have this low standard attitude on buying a home this way, why not rent and save up the money and put about 75 to 90 percent down at least.....everybodys a loan shark nowadays you know

Answer 1

Simply because it would take most people far too long to save 75% to 90% of the price of a home. To add insult to injury, try getting a mortgage that small. You'll pay premium rates for a "mini" even with excellent credit.

I've never put up more than 5% of the purchase price and in decades of ownership of many homes have never lost one to foreclosure. It's all about buying within your means, pure and simple.

Answer 2

Are you a Dave Ramsey fan? : ) My husband had a similar mindset as you, but we realized that on our income it would take probably 5-10 years to save up that much! The way we see it, why not put a few thousand down initially and be able to enjoy our home while we pay for it? We just bought a house that was within our means, putting about 6% down, fixed rate, and we know that we may have to make some sacrifices like not eating out all the time, but it's worth if for home ownership and to not be throwing money down the drain every month for rent.

The thing I don't understand is people who put NOTHING down, 100% financing on a home with an ARM just so they can get into it, and then they can't afford the monthly payments once it adjusts... that is pretty much a guaranteed path to foreclosure.