ATLANTA — What’s old is new again and in the case of mortgage down payments, Channel 2 consumer adviser Clark Howard says that is not a good thing.
Howard explains why paying zero down up front could hurt you in the end.
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Of the ideas from the real estate bust 15 years ago, the zero down payment mortgage has come back to life.
Howard says taking out a loan with no money down puts yourself in a hard place.
“Because that means you’re upside down on that home from the minute you buy it. And life is not perfect. Things can happen,” he said.
“You may need to sell your home, but if you have no equity in it and you go to sell, you’re going to have to come to the closing table when you sell with potentially tens of thousands of dollars,” he added.
Howard says the shortcut to home ownership to buy a home with no money coming out of your pocket up front creates trouble. What advice does he give to homeowners instead?
“Take the time to save up a down payment and put some money on the table when you buy,” Howard said.
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