PMI

But..when the purchase price of a new home is increasing 20-30% a year (like it did in the Baltimore Market near where I live from 2002-2005), then borrowers lack the time to save an adequate down payment. I watched a community of townhouses—yes, I said townhouses about 4 blocks from my office in Owings Mills, MD go from starting prices of $320,000 to $475,000 in a period of nine months. That was cheap housing for the area; a single family home community about 3 miles away had starting prices in the $800,000’s (the actual costs were closer to $950,000-$1,000,000 when you added in things like kitchens, finished basements).

If you read Brandon’s article on PMI, you would find that he’s not upset over PMI, but rather at both the lousy customer service he received, and the underhanded way Wells Fargo calculated the LTV ratio (dividing the current principal with the lower of the two prices—original value versus original purchase price) to determine when you reach the magic 80% number. Factor in the fact that they also require you to use only THEIR appraisers and it’s enough to at the least make you shake your head in disbelief.

Buying a home for the average person has become such a bureaucratic nightmare that you really need to have a lawyer present when you go after a home. I’ve seen the mountain of paperwork that gets prepared—just for the mortgage. I’m a fairly intelligent person, but not only would I have a difficult time deciphering all of that legal lingo, I wouldn’t remember half of it within six months.

Back to the bank subject, however, it seems that the new era of digital everything (videos, music, etc) are eliminating a lot of jobs. Personally, I prefer a bank where I can walk in to the branch and have a cup of coffee with the manager while we take care of a problem or do some work involving my accounts. I don’t really care much about interest in savings—because my savings is either for something I want, or emergency funds. So, it’s going to get spent, one way or another.

You mean like this?