Lets talk about the new Zero Down Mortgage Program – Add me on Instagram: GPStephan
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THE NO MONEY DOWN MORTGAGE:
This was launched as a brand new pilot program for first-time home buyers, that aims to help underserved neighborhoods in “designated markets throughout Charlotte, Dallas, Detroit, Los Angeles, and Miami.” This would allow individuals and families to obtain an affordable loan, with no money down, no PMI, no closing costs, and no minimum credit score.
Now, even though these loans ARE intended to help underserved neighborhoods, eligibility is based entirely income and home location, with prospective buyers being required to complete a “homebuyer certification course” prior to applying. This means, ANY first time buyer is able to apply as long as the home falls within the approved zip codes.
On the surface, it doesn’t appear to have many of the “Red Flags” that were associated with the 2008 Housing Crash:
Even though homeowners are putting NO MONEY DOWN, with NO CLOSING COSTS, and NO PMI…they are NOT getting variable interest rate loans, which, arguably – is where a lot of initial trouble started.
Second, it’s currently a pilot program within select zip codes of certain cities…so, even though ANY first time home buyer can apply who meets the eligibility requirement, it’s not prolific enough to affect real estate prices on a large scale.
Third, when people hear “NO MINIMUM CREDIT SCORE REQUIRED TO BUY A HOME,” it’s shown that – by including phone and utility payments – lenders can get a similar risk model and default rate, to calculating credit cards and loan payments – so, it makes SENSE to include alternative data to give people loans who OTHERWISE would not have qualified.
And fourth, unlike 2005’s “NO INCOME, NO JOB, NO ASSET” loans, Bank of America IS looking at income history, employment, and current assets to determine eligibility.
HOWEVER… the issue that I see in all of this, is that – offering NO MONEY DOWN mortgages, at a time where median prices are at an all time high – exposes the buyer to A LOT of risk in the event the market goes down, they lose their job, or – their income declines.
In those scenarios, it’s HIGHLY UNLIKELY that they’ll have enough equity to be able to sell their house, WITHOUT coming out of pocket a significant amount of money…and, essentially “locking them” into fixed monthly payments without a clear path out.
Obviously, this presents a SUBSTANTIAL RISK that – most likely, the person who’s putting no money down, is NOT going to be able to come out of pocket to sell, IN THE EVENT something unexpected happens and the market declines – and, unless prices keep going up – they’ll be “stuck” making the payments on their home, whether or not they can financially afford it.
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I agree that I don’t think it will cause a crash, but it scares me. I think it can be a good thing for people who have income that’s at least 3x the PITI payment but not much disposable income due to high rent. I just fear for the early 20-somethings with parents who tell them how wasteful and stupid it is to rent for any length of time.
Also, side note: we got a 0 down mortgage from Navy Federal in 2015 (conventional not VA). There are a handful of banks that have offered them for years, but they typically come with much higher interest rate. We paid 5.25% in a time when the norm was no higher than 4.5%.
I can already get 0 down through Navy Fed, I would like to see the prices drop far more though. I plan to buy next year so the lower they drop the better for me.
lol. Goodluck
Sounds like NINJA loans which helped cause the 2008 crash ( no job no income)
Could you make a video about the credit card competition act of 2022 🙏
Junk Mortgages are back. Time to short the real estate market
The problem with this type of loan is that it requires homes to be in “certain zip codes” aka THE GHETTO. Requiring that the properties be in zip codes where 50% of the population is either Black or Latino. This basically keeps People of Color from moving into nice “White” neighborhoods where schools are great, quality of living is high and the community as a whole is safe.
Sounds like NACA ( they are funded by Bank of America). 0 $ down, no minimum credit score, no pmi, lower interest rate and the ability to buy down your interest rate anytime during your mortgage life. Downsides: lengthy process, too much paperwork.
Is this a new reverse red tape program?
Just sold my house.
Waiting for the crash then I’ll buy something else.
Here we go baby!
Graham – love your videos. I’m in line w a lot of other commenters here, tough to save for down payment. Open question to you and anyone else, have you heard of Loftium? What is the general consensus on them?
id rather have no interest
It is a bad idea when the market is forced into a recession by Fed. More than likely the Fed is going to keep high rate for a year. When the recession hits everyone, Fed will slowly decrease the rate. By then, it is a game over for many idiots. And it would be a time to buy. Save your money till then.
This videos can prevent a lot of bad decisions but not a lot of people will get this knowledge 😔
Give them everything on a platter and they will still screw it up. If you have to be hand fed like a baby, you’re going to continue to be dependent the rest of your life. Looking forward to all the upcoming foreclosures. (I was an estimator for a large company that bought foreclosures and rehabbed them)
my gut feeling is something doesn’t sound right. im just gonna sit this one out and watch what happens
let me know what you think!
No money down and down payment grants have been around for a few years in my region.
do we just go to BoA website to apply for it?
whats up graham its guys here lol
Do you purposely say “what’s up Graham, its guys here”?
Yeeeaaah baby I think I’ll get me one of these esketit
It’s pretty much the racist zero everything home loan.
What’s up Grahms’
Looks like I picked the wrong week to stop sniffing glue 🤷♂️
*Michael Burry has entered the chat*
What’s up graham its guys here 😉
NINJA loans are back, baby!
Intention was very good with nuclear technology too but things went sideways and nuclear bombs were built and now it’s a threat to humankind.
xD “Whatt’s up Gram, guys here”
But isn’t it bad to have a 0 down when we’re win a housing shortage?
So it’s not worth buying a home rn because prices are high?
I see how they make their money… its in the extent of the loan term and also they may have some contingencies in place to say you broke their contract so they are taking the home from you…. they may even rent it out or sell if after getting many years of you paying on in so they really did not lose money if they can keep the market afloat with offering these types of loans… as in they get a majority on these loans with others and collude to shape the market… some lose their home in this also but its within the contract that people are signing where they may want a lawyer or something before even considering making this deal with this devil… LOL
Is this another red lining offer like the 1930’s
Gram cute animals are fine but if we could get some cute anime girls that would also be awesome lol
One perspective Graham is missing by virtue of not working at a bank is that banks do not offer $15k downpayment subsidy to Low to Medium Income (LMI) households because they want to make money on the loans. Most likely the bank is facing fair lending issues in response to which the regulators are mandating offering Special Purpose Credit Program. The bank will likely lose millions of dollars on SPCP to get out of their regulatory muck.
*Burien, WA Housing Prices Crater 19% YOY As Seattle Area Borrowers Take The Financial Beating Of Their Lives*
im in a grey zone where i can definitely afford the mortgage and taxes per month and not be overwhelmed by it, but i just cant afford the lump sum down payment so many people or places ask for. Was recently looking at a small house that i really liked and seemed perfect but i didnt have the 8000 id need to be able to drop just to be CONSIDERED. It really sucks as a single person first time buyer bc you just cant compete with people who have dual income or are more well off financially who are buying up all the cheaper places to rent out.
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Is this bot just going to be left alone?
I think this is an idea.
What is the best way to find a lender for this type of loan? I make well in the six figures but I went years with troubled credit and still working on it but it’s taking a long time.
This is one of those things that sounds good but your gut tells you fck that lol
Nice video !
dweebage alert guys….
CLICK BAIT Y’ALL
Stop talking about dodgecoin sheeesh
I like the idea of not determining loans based on credit. Some people may not have the financial means to get access to a credit card, may not make enough to justify a credit card fee (especially bigger credit card lenders), or they don’t have access to a bank account that would allow them to pay off a credit card (yes, some people do not have a bank account in this country). Or they simply don’t play the credit game (it does become pretty pointless to play if you have enough cash flow or savings. A lot of people play the credit game for cash back points on items they already were going to purchase with cash). And credit scores are such a crazy thing. I’ve seen people paying for food items with an Amazon Prime credit card and it blows my mind. The average American has between 4-12 credit cards. I have three and feel like it’s 1 too much. Credit scores are all based on usage of available credit line, payment history, and account history. So someone could theoretically have a high credit score, but no savings or assets to fall back on if they were to loose their income.
Aaah, “Equity” loans. They figured out how to justify it. Great. 2008 here we come!
What’s up Graham its guys here!
Click Bait
There are just two first-time home buyer loans with zero down. These are the VA loan (backed by the U.S. Department of Veterans Affairs) and the USDA loan (backed by the U.S. Department of Agriculture). Eligible borrowers can buy a house with no money down but will still have to pay for closing costs.
I think that a 0 down loan is not a good idea like it might help people in certain specific situations but it is just really risky especially with the market on its way down. If you’re willing and able, putting 20% down will always put you in a good situation
No comment
There’s thing I want to change
Not for my self
Whole world
One of them
Is shutting down housing market global
Opening free housing
Single person
Family size house
Buy your own power source
Get your own utilities
For the home 🏠
Like tent
Oh yeah! “The big banks showing mercy on the poor program”?…not a chance!!! Lol the poor pays more fees and always end up loosing more than anyone else.
Banks dont lend theyre borrowers…of your Credit in the soc sec acct. Read title 15 usc 1692, all consumer laws very closely
I hope these programs actually help some people get ahead; but sounds like 2007 all over again with many foreclosures to follow. We must be near the end of this housing bubble.
Whats up Graham. Its guys. 😆 🤣
Great video! Of all the loans being processed what percentage of buyers are using the BoA loan? Additionally, you mentioned home prices have doubled since the start of the pandemic. Can you share the source for this? All I have seen is they have gone up 20-30%. Lastly, how does the BoA loan option impact the real estate economy when we have historically the lowest inventory ever? Seems like it wouldn’t have much of an impact. Thanks
What’s up Graham it’s Guys here 😏
“Free home”- catch is you have to buy in the most violent and crime riddled neighborhoods. Ouch, tough call.
Gram- “What’s up Gram it’s guys here!”😆funny.
Hey, what about the China collapse you predicted? It should’ve happened weeks ago, did you forget or are you pretending you never talked about that ?
This is only going to make it worse. lmfao
The San Francisco PoppyLoan mortgage is still available with 100% financing for up to $2,000,000.
There up to something!
*Orlando, FL Housing Prices Crater 20% YOY As Sellers Slash Prices Double Digits Across Florida*
I’d love if you did a video about USDA loans!
What’s up Graham, it’s Guys here.
The zero down loan is a very small niche of people. Most people won’t be able to get it. If you make too much, you can’t get it. You can always get the 3.5% FHA loan for any new home buyer. Banks aren’t stupid and they are not trying to give out bad loans.
In my opinion give a loan for a people not well educated about money is a disaster!!! These people needs a guarantee home not a loan to buy a home!!! If you are poor or with less money in general, why you think these people still working in these low paying jobs ? Because these people have no time to work or they have complex personal problems that prevents them from improving. So in my opinion this is a new way to milk people like a cow
I look forward to these videos every week ily graham !
Give people houses they can’t afford. Then take them back after they can’t make the note.
Available for African American and Hispanics? Only in certain zip codes? It sounds like a form of legal segregation and housing redlining to me.
i had this loan when i bought my house back in 2007. they actually wrote me a chech for a few hundred bucks at closing lol..still living in the home now.
“I LIVE IN LAS VEGAS”
Soooo they will help them if they stay in a bad area but not if they find something great and can get out that area and afford better. That’s dirty dirty keeping them where they are at
Set up to make money on uneducated buyers. Keeping them down
Can you talk about rent and when and if it will come down ?
What are your thoughts on using this kind of loan as an opportunity for someone to create an airbnb?
*Colorado Springs, CO Housing Prices Crater 21% YOY As Excess, Empty And Defaulted Housing Inventory Blanket Denver Area*
Sad that home ownership is an “American Dream.” Anyone working 40 hours a week at a basic job should be able to afford a home, period, like the way it was during the 1950’s!!!!
Is there a loan that isn’t predatory?
Ftx
Wow these no money down loans sound quite risky. I’ve been seeing a lot of fixed adjustable loans since the rates started going up. Im fairly certain there will be another Great Depression in 6-8 years from now
One thing to be successful in life is to have the mindset of the rich. Spend less and invest More. Don’t give up on your dreams
“what’s up Graham, it’s guys here” is a funny mess up and I love it.
Without Glass-Steagle coming back, this stupidity WILL continue to cycle through.
What does this mean for our country? That is the bigger question you ignore.
Honestly this sounds kinda scary for the people falling for this
Wouldn’t it be advantageous to buy a house with 0 money down and then offset the costs of the mortgage by renting out the home and let the tenants pay off the debt while you essentially wait for a rebound of the market. Rent prices are high and unlikely to go down based on interests rates and housing prices.
Me just realizing that I have this sort of loan… 👀
What’s up Graham?
It’s guys here.
😂😂
man I’m so glad housing is considered an asset class and not a basic necessity for people to live and thrive.
BoA has been doing this for years. They work with a program called NACCA and while people who go through the program have a harder time buying a house because many people hate the process of working with them it has yet to actually fail for them.
The “What’s up Graham, it’s Guys here” did make me chuckle at the start – not sure if that was intended or not?
0 down and 10%+ variable rate. Should go well.
Last minute money grab before everything tanks 😬
Key word is FIXED RATE, inflation eat every month, dont worry.
“What’s up Graham it’s guys here?” Lol I wasn’t ready for that.
fish picture was 🤌
*Phoenix, AZ Housing Prices Crater 13% YOY As Mortgage Defaults Triple*