Meet Matt Ishiba. From Bakeries to exterminators to autism treatment clinics he owns over 1,000 small businesses.
He owns over 1,000 small businesses.
(Yeah small businessmen let’s give them preferential treatment.)
Anyway, he also owns the Phoenix Suns, (NBA) the Phoenix Mercury (WNBA) and holds a 75% share of United Wholesale Mortgage (UWM),the now publicly-traded company he inherited from his father which is the center of his fortune and how he got his start. (He inherited it from his father.)
Anyway, the mortgage-lending business has been slow (see chart)
Putting aside the elephant in the room, what would someone’s monthly payments look like with nothing down? Are there that many people that make enough money to afford really high monthly payments, but just don’t have the expendable cash for a down payment?
According to Realtor.com
If your mortgage rate stays the same (It wouldn’t because you are a higher-risk borrower)
When you switch from borrowing 80% to borrowing 100% your PMI increases only a little so your monthly payment goes up only about 27%.
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However this was not my experience. Decades ago I dabbled as a real estate salesperson and I found:
Interest rates were higher for people with low down payments (we didn’t have zero down them)
and
The mortgage insurance on the last additional borrowing was usurious!
In the end, it was the equivalent of borrowing 80% at slightly higher rate and borrowing the additional 20% (17.5% in those days) at credit card rates.
LOL, only 27%? Paying almost 3k on a monthly payment for a 300k house is a bit extreme IMO. How are property taxes only 55 dollars? I pay over 10 times that amount in property taxes.
I notice the max is a 500k home. I don’t even want to think about what that would cost.
Look, I’m a little weird when it comes to expendable cash. I do everything I can to not have that tied up.
It’s close to all interest loans which I don’t know even know how it’s allowed to exist basically hardily anything goes to principal but they do it because the interest payments are a lot of times cheaper than renting.
None of that helps you with the super sized monthly payment. I’ll take a much cheaper rent any day. However, in NJ they don’t exist either. But in other states, like NC, it’s much cheaper to rent.
No, I probably should have added more to that since that blurb was really not complete. Sorry.
You pay a smaller payment at the beginning of the loan by covering interest only for a set amount of years. Usually about 1/3 of the life of the loan. After that you basically have a variable rate loan paying both interest and principle and your payment skyrockets compared to what you were paying.
From my understanding the lender kept negotiating with him basically allowing him to keep paying interest only payments up until the point the house quadrupled in value then they quit giving him that deal. making his house payment like 4 times higher that he couldn’t pay and since he was paring interest only forever he had no equity to leave with…
The article stated 10’s of thousands fall prey to those type of loans.
