Proposed Loan for RENTERS!

The FEDS have proposed ZERO DOWN for RENTERS.

It has become a fact that just a few months ago America met the benchmark for more renters than anytime in the last 50 years. It includes the statistic , from the PEW research center, that 65% of all household headed by the age of 35 or younger are renters. Now if we look at what the CDC has provided for the mean age of women having birth we see another eye opener. 26.3 is the mean age of a woman to first give birth. This would come to conclude that much of our renters are also parents.

WHAT DOES THIS MEAN?

This often means that coming up with a down payment may become nearly impossible! Sure, companies like Imagine Home Lending may offer Zero down to outlying addresses that are eligible and VA eligible service members. But how about those renters in the city that are not eligible service members.

Let alone renters that qualify for ANY ZERO DOWN PROGRAM.

NO FEAR...THE FED HAS A PLAN

(Or Fear)

The Federal Reserve has made a statement of a proposed plan to offer a solution to renters with no down payment. It is sort of a 30 year fixed monthly payment with an adjustable interest rate.

Here is the proposal.

NO MONEY DOWN

ADD AN EQUITY ACCOUNT

So what is this equity account all about?

EQUITY ACCOUNT=PAY DOWN PRINCIPAL

EQUITY ACCOUNT=FUNDS FOR RISING RATES

In terms we may all understand here it is. This is a 30 year mortgage, designed in which your monthly payment would be according to what you can afford. There would be no down payment. An equity account is put into place. This equity account is put into use when the rates fluctuate. Remember this is an adjustable rate mortgage with fixed payments. As interest rates go up so does your equity account and as they go down so does your equity account. As you gain more equity in your equity account you can either pay down principal or keep the funds in for backup of rising rates.

IS THIS GOOD OR BAD?

One catch....What if rates only increase?

Correct, drained accounts

Okay Two Catches....There is NO Refinance option.

Correct, when rates drop it is placed into the equity account.

REMEMBER FOLKS...THIS IS JUST A PROPOSAL?

TELL US YOUR THOUGHTS? GOOD OR BAD?