NY Metro blog Curbed presented an interesting article and subsequent discussion about brand new condominium apartments selling in Brooklyn for $355,000. The Buyer needs only $10,000 for downpayment; the builder is paying all the closing costs.
This certainly is a wonderful opportunity for anyone to buy a first home with minimum investment: one of the defining philosophies of my entire career.
I was very intrigued by the subsequent discussion. And more than a little bit concerned once again at people’s lack of tolerance, rudeness, and downright nastiness when posting to internet discussions.
I posted some observations to the Curbed thread. Here they are:
“This article points to a truth I learned when I started in the mortgage biz eighteen years ago: people want to own their own home, but, living in NY Metro area, it’s difficult to come up with large downpayments and closing cost monies.
Say what you will about the location, the opportunity to own a “piece of the rock” for $10,000 is fantastic. And, as someone pointed out, the cc’s on new construction are substantial, usually 8% of the mortgage amount ($27,000 in this case). So, having the builder pay that is not only unique, but enhances an already great opportunity.
I wanted to make an observation on the whole location argument. From my reading of this thread, it appears there are those who believe the location of this condo is horrible, others who think it’s fine, and others who don’t care about the location, they just want to own something at a reasonable price.
I started out lending mortgage money in 1989. That’s long before NY was such an attractive place to live (in fact I escaped to the suburbs just three years later; couldn’t wait to get out of the city I grew up in). Back then, graffiti, filth, dog-poop everywhere, crime, poor subway service, were all the norm for life in the Big Apple.
New York was not then the shining star it is today.
You all might find it difficult to believe, but even then, people bought homes and apartments in New York City. And they did it in huge numbers. People weren’t thinking about the dismal state of things around the city, instead, they wanted to make a dream come true, own a home, and improve their financial (and ultimately personal) situation.
Homeownership does that. No matter your opinion on renting versus buying, bubble versus crash, or where your money really goes (landlord or bank): owning a home is one of the single most beneficial experiences any one person or family can undertake.
Finally, I wanted to address the observation about high foreclosures with a low downpayment. Forget it. I’ve been putting people in homes with very little money down for nearly twenty years. And folks pay their mortgage.
The notion that low down is more likely to lead to foreclosure is a myth. I know it from real world experience. Foreclosure is more likely to result from a financial cataclysm like job loss, illness, or divorce, not from putting low downpayments.”