Monday, May 30, 2005

Freddie Mac's Homeownership Guide

Check out Freddie Mac's: Is Homeownership Right for You? webpage. Interesting.

Here are some of the noteworthy finds:
  • Under 'What are the risks?' " Your monthly mortgage payment may be larger than your rent." may? It should read 'most likely will' ! Hello.
  • "Property values can depreciate" thanks for the information.
  • "To get a quick idea of what you can afford to spend, multiply your annual gross income (before taxes) by 2.5. For example, if your annual household income is $50,000, you might be able to qualify for a $125,000 home. This is just a rough estimate - the actual number will vary based on factors such as your debt and credit history." Hmm. Then how come you are bundling up loans where people are purchasing homes worth 5 times their income.
  • "Don't forget that you also have to save for the down payment, closing costs, inspections costs, moving, and other related expenses. " Ever heard of negative amortization loans?

Theis website directly contradicts the lending practices of Freddie Mac. Freddie no wonder you are in trouble.


  1. Those are some very old guidlines. They're from the time when housing was priced in some sort of sane way. Around here, however, renters don't get a break either. You're going to be broke whichever way you go.

  2. 2.5 times income? Must be joking. They mean 25 times, right?