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Comment by toomuchtodo | Hacker News Reader

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Yes, you can get away with a 3% down payment with an FHA loan. But 3% is still $6K on a $200K property, even more if you're trying for a $250K or $300K property. That doesn't include closing costs, nor an emergency fund you need for homeowner expenses that traditionally come up.

Sure, you can afford the house at closing. Are you financially well off enough to afford it for the next 15/30 years (depending on loan term) so as to not lose your equity?

Probably not, and that's not going to get fixed until incomes start rising.

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Counterpoint: the question you're asking has to be asked about renting also!

Are you financially well off enough to afford what the rent is going to be over the next 15-30 years?

If you aren't well off enough for the mortgage or the rent, then you're fucked either way.

Now suppose we equate mortgage with rent, and declare that the payments you're making aren't contributing to equity---they are just pure rent. Then the equity you have in that $200K property is the $6K you put in. That is what is at risk relative to renting.

(Of course we are ignoring the effects of location. Relative mortgages versus rents and the longer term picture in a given area and such.)

If the rent gets too high, you can just move. If you lose your job, good luck dealing with that mortgage.

The problem with buying a place is you get stuck in one location.

So your answer to rising rent is to constantly move to comparatively worse and worse locations? Because if rent's going up, it's going up everywhere. So to get a lower rent, you're talking about downgrading.

Also, to add to your comment, I don't see how you're "stuck" with owning any more than renting. Moving is a hassle no matter what. But if you're moving out of a place which you own, you have flexibility about dates. You can set things up so that you have a comfortable week to move.

With rentals, you typically have to hand over the old place on the same day you get the new place. All the renters play a a ridiculous round of "musical suites" at the end of the month.

Only if you're lucky, the place you're moving to is already vacant, and the new landlord is kind enough to give you the key in advance, or the old landlord doesn't have anyone moving in right away and lets you have access to the old place for a couple of days.

Not to mention the less you put down the more you're going to pay in interest over the long haul.

Indeed! The only time putting little down makes sense is if interest rates are low (they're currently at historical lows, and the Fed is starting the ratchet to move them up) or you're sure there's going to be significant appreciation in the value of the property to overcome the expense of that interest.

Of course that is true, but mortgages have options to make regular balloon payments and such. You can "catch the train now" and beat that problem down later. If you're young and starting out in a good field, you can expect your income to rise.

How much you're going to pay and how long it will take is just a projection based on the current numbers: interest rate, remaining principal and payment size. The projection isn't reality.

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