Wednesday, September 13, 2006

Charge that Down Payment

Buying into a condo that requires a down payment and don't want to put any money down? According to the Real Deal, American Express has got your back. The credit card company has teamed up with the Moinian Group to allow buyers to charge their down payment to their American Express. Of course it's due in 30 days, but you can buy now and pay later.
American Express says that it's a benefit to it's members, that they can accrue precious points to qualify them for round trip tickets to Paris or some remote island. Moinian Group is trying to sell condos. It's win-win right?
When it comes to articles about mortgages these days it's all about how borrower's are taking out riskier and riskier loans to finance their homes. That these risky loans are going to cause mass hysteria and foreclosures across the land. There's no way out.
Or is there? How about charging your down payment to a high interest credit card? Yeah...that's the ticket.
My take, why not let the buyer obtain 100% financing. It's obviously safer than letting them charge their down payment to a credit card. Our debt load is huge, no question. Americans love to charge their purchases. Is it because we get miles? Or are the credit card companies offering these incentives because they want those precious credit card balances at 24% interest?
Here in New York we can charge our rent. Why not charge our down payments too?

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