Didn't We Almost Have It All

There was a point during the Great Housing Bubble where it seemed one could have it all. You wanted a dream house? Just find someone to give you a no doc loan with a teaser rate and 100% financing and you could have any home you wanted. No commitments and no compromises were required. No need to worry about the rates resetting - the advice was to just refinance or sell the property. After a year or two of ownership why not take out some equity out to buy your dream car to go with that dream house. For those who fed into the ideals it was like we almost had it all.

Almost... but those days are gone. Those who bought into the bubble's ideals are in the most trouble. Those who hesitated know that the bubble paradigm has changed. The new paradigm is very similar to the pre-bubble paradigm. The big shift is down payments. Not only are they required again - but in Sunday's Record about sacrificing for a down payment. (For those still in trying to maintain the bubble mentality sacrifice means "forfeiture of something highly valued for the sake of one considered to have a greater value or claim.") The article is titled How to raise a solid down payment. Lets take a look -

In rare instances, low- to no-down-payment loans are still available to novice buyers seeking to purchase a starter home. But such mortgages are now much harder to obtain - especially if you're self-employed or have blemished credit, says Eric Tyson, co-author of "Mortgages for Dummies."

"In this era of foreclosures, lenders are extremely conservative about their standards. Anyway, people with a solid, 20 percent down payment always get the best possible terms on a mortgage," Tyson says.

...
If you've long been accustomed to the freedom of having at least one car per driver in your household, scaling back could at first seem like a drastic downshift in your lifestyle. Yet as Moore points out, this needn't be a permanent change

...
As financial advisers can attest, the first step toward freeing up money for savings is to hack away at your routine spending. That means taking several hours to review your checkbook and credit card statements to see where your money is now going. While doing so, many people are shocked to see how much money slips away through small expenditures, such as buying the latest CDs or going out to lunch with co-workers.

...
Mortgage lenders frown on the use of borrowed money for a down payment - even if it comes from your best friend on the easiest of repayment terms. But most are fine with the use of a cash gift for all or part of your down payment.

During the bubble we almost had it all. We did not need to give up cars for a down payment - we did not need a down payment. We did not need to give up indulgences - with teaser rates we could afford our cars, home and all the indulgences we wanted. Unfortunately we can not have it all. And we are paying the price for trying. Also unfortunately some are paying the price more than other.