Given the state of the economy, I can easily understand why a lot of people are willing to pay the extra fees to keep more of their own cash available (in fact, I will probably be buying in the next year, and am leaning towards going the FHA route for just that reason – I can afford 10% down, but it would seriously deplete my cash reserves, and in this economy, I’d rather keep those reserves just in case).[/quote]
Thanks, SDE, I think we are in the same boat…about looking at buying next year with 5% down, 10 if that’s impossible… Being a knife-catcher, but being serious, I struggled hard to make all my payments on my previous home and as a result I didn’t save anything… Hey, I didn’t know I could be bailed out! 🙂 Now, I am slowly buliding up, I have a better job and I am renting, but I’d hate to dump all this hard-earned cash in a down payment.
I know that this low to no downpayment played a major role in this housing market mess, but I would like to see more lenders giving 95% financing with good rates if the applicants have excellent credit scores and well-documented enough income (debt-to-gross income ratio of 28-33%)…I know quite a few people that were in my situation and got out just in time , with “affordable” losses. So now they have little if any savings for a future downpayment. They make good income, have as stable jobs as one can hope for so they would so they are able to afford the monthly payment, but not the down payment. They seem they will be left out of the housing market – even if you save $1000/mo for downpayment only, it takes at least 7-8 years to save 100K -which is 20% of a relatively modest (depending on the area) home of 500K.
