Here Come the Zero Down Payment Mortgages
The signs of financial catastrophe are all around us. Grocery prices have not decreased much since the worst days of the pandemic. Well-paying jobs are beyond anyone’s hopes. Today, you are lucky if you can get a low-paying job and supplement it with gigs; most of us have no choice but to cobble together as many gigs as we can, pay as much of the bills as we can afford to, and then pay off our buy now pay later (BNPL) purchases and our astronomical 1099 taxes in installments. Forget homeownership; no one can afford to buy a house unless they are buying it with the proceeds of the sale of a house they already own, or if their parents give them money for a down payment. Mortgage interest rates are through the roof. The old folks keep saying that it could be worse, though; they remember the subprime mortgage crisis. It may be hard to get a mortgage loan, but isn’t that better than banks lending you a mortgage with the full knowledge that you can’t repay it? Someone should let the old folks know that frighteningly risky mortgage loans are back; this time, they are called zero down payment mortgages. If you are tempted by the idea of homeownership without a down payment and you want to find out whether it is worth the risk, contact a Boca Raton foreclosure defense lawyer.
Two Debts Owed to the Same Lender Are Worse Than One
Like the best movie monsters, monstrously risky mortgage loans are always evolving. The monster of the week in this year’s creature feature is called United Wholesale Mortgage (UWM). The process of applying for a UWM loan is similar to any other mortgage or large loan, except that you don’t have to put down a down payment out of your own funds. Instead, the lender issues it to you as an interest-free loan. You don’t have to repay it until you sell the house or refinance the loan. When you can keep up with the mortgage payments, everything is fine, but if you default on the mortgage, you owe the down payment, too. In other words, as long as you keep feeding the monster in your front yard, the monster in your closet won’t bite you. If you don’t, it’s a feeding frenzy, and you’re the main course.
Rock on With Your Faint Glimmer of Hope
People who apply for zero down payment mortgages do so because they don’t have the money for a down payment, so they can’t get a more affordable mortgage. Their only other option is renting, which is a pretty horrible monster, too. Choosing between a zero percent down mortgage and renting is choosing between the opportunity to build equity, assuming things go right, and the opportunity to get out of your commitment fairly cheaply, if things go wrong.
Work With a Debt Lawyer About Conquering the Mortgage Monster
A South Florida debt lawyer can help you decide whether taking out a home mortgage is worth the risk. Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.
