Joe The Homeowner Keeps On Getting Smarter

Sound familiar? It should.

Prior to 1934, the norm for mortgages included 50% down payments, 2-3 year terms, and interest only payments ending in a balloon equal to the original amount borrowed. And that is why only 40% of the nation owned a home.

Then in 1934, FHA was created, revolutionizing the mortgage market by
amortizing loans over longer periods.

This led to

1. Lower monthly house payments
2. Amortized mortgages (spread-out payments and no balloons)
3. Small down payments
4. Affordable homeownership
5. Qualifying ratios

Yes, the advent of qualifying ratios meant a borrower no longer needed to be the brother-in-law of the banker to get a mortgage.

And then FNMA... Well history is repeating itself.

But Joe The Homeowner learns his lesson this time around. Joe is
understanding why he can't depend on the bank to know what he can afford in a mortgage. You can read more about Joe The Homeowner and ongoing Hope For Homeowners a three part series by Kate Ford.

By Kate Ford