No Money Down Mortgages

Do they have at least 6 months of emergency cash like most banks want? How can you have no emergency cash with 0% down? I guess same ppl who can't live on $5000 a month...

I agree #1, & before people jump in with "the vast majority of apartments in Manhattan are Co-ops and they don't allow 100% financing" let me say that the vast majority of new construction in Manhattan has been and will continue to be condos...

yeah wait a minute... I can't remember seeing any properties that allow 0% down actually. Coops are like 20%+ and condos are 10%+. Spread your FUD elsewhere (Fear Uncertainty Doubt)

I would love to take the apt off their hands ASAP please give out the address and contact info.

highly doubtful story.

Everyone keeps saying buy, don't rent. My friends were paying $1,900 and 2300 for rent. That's why they bought...thinking their jobs (I don't know the exact amount they earn) rather than rent. My point is there are problems beginning in Manhattan just like every where else!! P.S. They are getting help from family and are TRYING to keep their apartments

well if they didn't own, they would be in danger of getting evicted anyway, which would damage their credit score...

O my God . . . two people!! THE SKY IS FALLING!

and notice they are trying to keep it... and they are getting help from family. Interesting. Sounds a little too logical.

Ummm, just because your friends were stupid enough to try and buy with 0% down, doesn't mean that a downward trend in Manhattan is developing.

It just means that your friends were really stupid, and they don't deserve to be homeowners at this point in their lives.

This is precisely why I'm glad that most of Manhattan is either co-op or high priced condos for the wealthy who in general don't need to leverage their financial position unless they're doing so to arbitrage their cash position.

this is not a true story.c'mon guys. find me a condo where you can buy 0% down. someone.anyone.

This is sad and scary - a 750k mortgage requires a lot of income - so they were making a lot of income but hadnt saved any money?! wow - also dont they have to put 10% down. How did they get around that?!

This is not a true story. This is a fabrication. I would be awfully curious to hear the addresses of these (2!) manhattan buildings that ask for no money down. Regardless of your point of view--bear, bull, buyer, renter, doubter, believer, whatever...this story aint true.

#3 you're right when saying that "the vast majority of new construction is condos" but the available inventory is still mostly coops.

Unlike condos, coops take precautions against allowing such tenants...if a condo owner forcloses - more likely than with a coop - it can mean greater doomsday for the rest of the tenants in the building who rely on that occupant for common charges.

As a result you would see the price of condos drop more in line with coops

The condo builders really don't care whether you pay 0% or 10% down. They're only interested in the cash at closing so it doesn't matter where you get it from. Sponsor units, even in coops certainly allow 0% down. The only reason some condo builders want 10% down is because the "new" condo will be ready 1 yr down the road and they want some cash on hand for the operation. If you buy an existing condo, you can get it for 0% down as long as you are approved.

plus if you use a mtg calculator, whether you pay 0, 5, or 10% down. It has very little affect on a 30 yr fixed mtg schedule as in your payments will only be lower by a $100-$300 so why do ppl keeping saying put down 10%? Sure, you have 10% equity but if you're losing your job, you're going to have sell regardless.

I dont think you should be able to to do 100% mortgage with an existing condo. To get a contract you have to put 10% down right away. I guess you can borrow from friends and family for that - but not likely that a bank lends you money in a week for that 10% down.

Also note that some new construction requires more than a 10% deposit. The Avery, for instance, requires 15% and the Element requires 20%. Also not all sponsor units have open financing.

this makes no sense to me. they are losing their apartments because they lost their jobs. it wouldnt matter if they lived in illinois, florida or nyc. if you have a mortgage and you lose your income, AND YOU DONT HAVE RESERVE MONEY, you are gonna lose your home. as someone else pointed out, even if they were renting, they would be in trouble.

if your point is that that economy is downturning, because these two new homeowners lost their jobs... well... we dont know why exactly they lost their jobs? why cant they find new ones?

#2 and #8 here, thank you #20. I think the whole concept of emergency cash is foreign. For a renter, emergency cash <= downpayment which really means they can't afford to buy, which explains why on another thread they think they can't live on 5k a month.

Emergency cash is crazy. Living in New York, whether renting or owning is expensive. When friends, family visit they are always amazed how much restaurants, etc. cost. Few people can keep six months emergency cash on hand.

if you can't keep 6 months emergency, you're nowhere near ready to own. You need to cut your expenses because you need a downpayment then 6 months emergency at least. I had 100 months emergency, that is why i'm buying/upgrading. Read "The Millionaire Next Door".

#22 it all depends on your priorities. My acct told me that optimally your living costs (i.e. rent or mortgage/tax/maint) should not exceed 30% of your gross income if you're saving for a house. If you put aside even $50 a month you won't miss it...that's how you build reserve cash.

NYC costs are higher than the rest of the country but so are salaries. And you don't HAVE to live in Manhattan. Instead of living beyond your means, get a roommate or move to the outer borroughs/hoboken. And eat the $5.95 chinese dinner special or the $1 hot dogs.

And if you can't afford to live in NYC then move back to Ohio.

" the Millionaire Next Door" Thanx! That's the second time today I've heard that title so I just ordered it from the library. Sounds good.

Not everything will be relevant for you, but certain things will be. 1) Your perception of a millionaire. 2) How to cut spending

I'm not terribly surprised that someone who put 0% down is in risk of foreclosure. The default rate for people who put less than 20% down is much higher than the default rate for people who put more than 20% down. This has very, very little to do with the lower monthly payments. It has a lot to do with the behaviors that motivate one group to spend all their disposable income the other to save up a down payment.

OP, I notice you didn't say that your hypothetical friends were forced to take loans against or withdrawls from their 401(k) plans or IRAs to make their mortgage payments. Let me guess...they don't have retirement savings. No retirement savings, no emergency fund, no downpayment...I'm not shocked that someone with such terrible financial discipline is in trouble.

Your "friends" were stupid to buy at all. And they were extremely stupid to buy expensive one bedrooms. They could have spent half as much and gotten a small studio as their starter apartment. Their story tells very little for people who have an ouce of financial sense.

#27 - nicely put - couldn't say it better.