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Mortgages being front loaded with interest is unrelated to not requiring a down payment. If you have to sell a home in the first 3-6 years it's usually pretty bad, as your equity doesn't outstrip your fees and taxes yet (this usually isn't too bad, but depending on the situation it might be nice to have the closing costs, agent fees, taxes, and difference between your mortgage and your rent over N months back). Having a down payment just means you also locked that up, so that's probably even worse, not better as you're arguing. And depending on the market, down payments may not be large anyway. People with higher credit scores (honestly not that high) can get an FHA loan for as little as 3.5% down. That's not that significant, especially compared to 10-20%. Re: being surprised by a big tax bill, BofA is running this program under its Community Homeownership Commitment, all of the programs under which provide--and sometimes require--new homeowner financial education. Re: interest rates, the existing Affordable Loan Solution loans (again under the same Community Honeownership Program) are around .25 and .5 points higher than comparable normal mortgages. That's significant, but hardly predatory, and they're all fixed rate and have caps on LTV (105%). I mean, I'm also distrustful. I feel like a bank shill, which is pretty uncomfortable. I believe their policies have immiserated and killed people knowingly, and they should probably be regulated out of profitability. But this program seems like what most people in the field have been advocating for for a while: lower barriers, educate and support people, help them start building wealth in their homes and grow their communities. [education]: https://homeloans.bankofamerica.com/affordable-lending [community homeownership commitment]: https://promotions.bankofamerica.com/homeloans/homeowner [community affordable loan solution]: https://newsroom.bankofamerica.com/content/newsroom/press-re... [rate]: https://www.freeandclear.com/resources/mortgage-insights/ban... (not the best source, but best I could find) |