5 ms·

The bigger reason is you can buy a house with 20% down (or less) in the US, where that is nearly impossible just about anywhere else in the world Edit: I shoul

The bigger reason is you can buy a house with 20% down (or less) in the US, where that is nearly impossible just about anywhere else in the world Edit: I should say anyone can buy a house for 20% down or less. In much of the world some can do this, but credit is not extended to nearly as many of the population as it is in the US

tjr225 5y ago
This would make me think houses should be even more expensive than they currently are
fraa-orolo 5y ago
I just bought an apartment with 15% down. It's in the EU; 15% down is about the standard here with no special exceptions. With government assistance programmes it can be even 5% down but you'd have to qualify for some protected category.
- toomuchtodo 5y ago
  How long is the rate fixed for?
  - fraa-orolo 5y ago
    The rate is based on Euribor [1], fixed for 6 months in my case (and commonly most everyone) but anything between 3 to 24 months was possible. [1] https://en.wikipedia.org/wiki/Euribor https://en.wikipedia.org/wiki/Euribor
    - lupire 5y ago
      Wow. What's going to happen your payment when rates go back above 0 to stop rampant inflation?
    - nemo44x 5y ago
      I wish you well but the way things look, you’re completely fucked. Your interest rates have been so unsustainably low for so long. And now things are going up fast and will likely continue to due to rapid inflation. Good luck!
  - gtirloni 5y ago
    Forever? Here in Brazil we negotiate a yearly rate for the whole extension of the contract. Isn't this standard?
    - toomuchtodo 5y ago
      In the US, 15, 20, and 30 year fixed are boring standard mortgages, with various adjustable rate mortgages available from 1-10 years (and even some interest only products, where you’re essentially just renting the property from the bank and not building any equity).
      - aaronblohowiak 5y ago
        Agreed except for your mischaracterization at the end. An I/O mortgage is a leveraged asset speculation you live in, without the “forced low interest savings” of traditional mortgages.
        deleted 5y ago
        [deleted]
        toomuchtodo 5y ago
        Historically, real estate has always appreciated at a health rate except during a handful of tail events. It’s less speculation and more allocating capital elsewhere versus dead capital in your home (and if the interest rate spread between the note and your other investment growth opportunities is significantly robust to make the effort worth while).
throwyawayyyy 5y ago
I'm surprised. I only know the US and the UK, but in the UK it can go down as far as a 5% deposit. Honestly US deposit requirements seem high.
- wahern 5y ago
  20% down (80% loan-to-value (LTV)) is the standard minimum for avoiding mortgage insurance. If you're willing to pay a mortgage insurance premium, 5% down (95% LTV) is not uncommon AFAIU, especially for large, "jumbo" mortgages, at least in coastal California. (Elsewhere it's probably the case that jumbo mortgages require a greater equity stake, not lower. Coastal California is a little unique. While prices are nuts, the risk of a significant valuation crash is negligible compared to, say, Nevada or Florida, so issuing banks are more comfortable with the additional risk and seemingly more eager to have that asset in their portfolio.) Also, in case there's some confusion, "deposit" and "down payment" are distinct. In American real estate parlance a deposit is earnest money (often 5% of the initial offer) to bind the seller into closing--the process of finalizing contracts among all involved parties, and transferring assets. A deposit might be forfeited if the buyer pulls out. A minimum down payment is the minimum equity a mortgagee (e.g. bank) requires the borrower to hold in the property as a condition of making the loan.
Patrol8394 5y ago
> that is nearly impossible just about anywhere else in the world I don't know about "anywhere else in the world" but I can guarantee you that you can buy a property everywhere in EU with a 20%. Also, property taxes in EU are generally lower than US. I keep saying that americans, pay lots of taxes, they are simply not aware of it.
- nemo44x 5y ago
  Yeah it’s true. Property taxes are so low in the UK. With “free” healthcare and almost no property tax, it’s easy to retire young. But it’s harder to make retirement money.
- scarface74 5y ago
  By “less”, you can easily buy a house with 3.5% (FHA). The requirements aren’t that strict.

tjr225 5y ago

This would make me think houses should be even more expensive than they currently are

fraa-orolo 5y ago

I just bought an apartment with 15% down. It's in the EU; 15% down is about the standard here with no special exceptions. With government assistance programmes it can be even 5% down but you'd have to qualify for some protected category.

toomuchtodo 5y ago
How long is the rate fixed for?
- fraa-orolo 5y ago
  The rate is based on Euribor [1], fixed for 6 months in my case (and commonly most everyone) but anything between 3 to 24 months was possible. [1] https://en.wikipedia.org/wiki/Euribor https://en.wikipedia.org/wiki/Euribor
  - lupire 5y ago
    Wow. What's going to happen your payment when rates go back above 0 to stop rampant inflation?
  - nemo44x 5y ago
    I wish you well but the way things look, you’re completely fucked. Your interest rates have been so unsustainably low for so long. And now things are going up fast and will likely continue to due to rapid inflation. Good luck!
- gtirloni 5y ago
  Forever? Here in Brazil we negotiate a yearly rate for the whole extension of the contract. Isn't this standard?
  - toomuchtodo 5y ago
    In the US, 15, 20, and 30 year fixed are boring standard mortgages, with various adjustable rate mortgages available from 1-10 years (and even some interest only products, where you’re essentially just renting the property from the bank and not building any equity).
    - aaronblohowiak 5y ago
      Agreed except for your mischaracterization at the end. An I/O mortgage is a leveraged asset speculation you live in, without the “forced low interest savings” of traditional mortgages.
      - deleted 5y ago
        [deleted]
      - toomuchtodo 5y ago
        Historically, real estate has always appreciated at a health rate except during a handful of tail events. It’s less speculation and more allocating capital elsewhere versus dead capital in your home (and if the interest rate spread between the note and your other investment growth opportunities is significantly robust to make the effort worth while).

throwyawayyyy 5y ago

I'm surprised. I only know the US and the UK, but in the UK it can go down as far as a 5% deposit. Honestly US deposit requirements seem high.

wahern 5y ago
20% down (80% loan-to-value (LTV)) is the standard minimum for avoiding mortgage insurance. If you're willing to pay a mortgage insurance premium, 5% down (95% LTV) is not uncommon AFAIU, especially for large, "jumbo" mortgages, at least in coastal California. (Elsewhere it's probably the case that jumbo mortgages require a greater equity stake, not lower. Coastal California is a little unique. While prices are nuts, the risk of a significant valuation crash is negligible compared to, say, Nevada or Florida, so issuing banks are more comfortable with the additional risk and seemingly more eager to have that asset in their portfolio.) Also, in case there's some confusion, "deposit" and "down payment" are distinct. In American real estate parlance a deposit is earnest money (often 5% of the initial offer) to bind the seller into closing--the process of finalizing contracts among all involved parties, and transferring assets. A deposit might be forfeited if the buyer pulls out. A minimum down payment is the minimum equity a mortgagee (e.g. bank) requires the borrower to hold in the property as a condition of making the loan.

Patrol8394 5y ago

> that is nearly impossible just about anywhere else in the world I don't know about "anywhere else in the world" but I can guarantee you that you can buy a property everywhere in EU with a 20%. Also, property taxes in EU are generally lower than US. I keep saying that americans, pay lots of taxes, they are simply not aware of it.

nemo44x 5y ago
Yeah it’s true. Property taxes are so low in the UK. With “free” healthcare and almost no property tax, it’s easy to retire young. But it’s harder to make retirement money.
scarface74 5y ago
By “less”, you can easily buy a house with 3.5% (FHA). The requirements aren’t that strict.