As mortgage rates fall to absurd-like levels, the cost of home ownership drops, too. Mortgage payments are 18% less expensive today as compared to one year ago.
For today's home buyers, though, "making mortgage payments" may not be a concern -- it may be making a downpayment. Thankfully, a bevy of low- and no-downpayment mortgage options remain available to buyers in all U.S. markets. The most difficult part of an economic recovery can be identifying its bottom; even the experts can't tell a "blip" from a "bounce"
The arguments seem to run contrary to long-standing beliefs about homeownership. For decades, experts have emphasized the need for a sizable down payment — a rule of thumb being 20 percent — on the premise that borrowers with a sizable chunk of equity in a home are less likely to walk away when things get bad.
“If our goal is to prevent foreclosures, I can’t think of anything more effective than requiring a down payment,” said Paul S. Willen, a senior economist and policy adviser at the Federal Reserve Bank of Boston.
Unfortunately, home affordability is rising faster than buyers' abilities to make a downpayment. Few first-time buyers have large savings on-hand, and many of today's "move-up" buyers are netting little or no home equity from their respective home sales.
Know more about the story. Read: http://dealbook.nytimes.com/2013/04/24/down-payment-rules-are-at-heart-of-mortgage-debate/