I know I put down over half of the price of my condo on the downpayment in 1991 to make my payments small. I basically have only 10 or 11 years left on my mortage and am considering paying it all off with my savings to help with medical costs. (The money gets spent one way or another, doesn’t it?)
The small downpayment strategy doesn’t make sense to me.
Small and no-downpayments were encouraged by this administration as part of its “ownership society”. What this does is broaden the pool of buyers, which serves to drive up housing prices. It makes housing more susceptible to flippers and speculators since they can tie up housing with little cost. It makes loan fraud much easier to bring off.
I expect that the days of loan brokers and easy loans are done, regardless of what politicians do. Investors are learning the hard way that traditional lending standards protected them as well as the borrower. They won’t be providing the cheap money that fueled the bubble.