100% financing?

Question

I applied for a loan and got approved, but my bank says they do not offer 100% financing anymore (like they did with my first home 3 years ago) so I have to come up with 3% down because of the current housing crisis. Is this all banks or just mine?

Answer 1

100% financing is pretty much dead.  

(1) with no down payment, there is no cushion for the bank if the value of the house drops.

(2) many people (obviously not all) had no commitment to staying with the loan, since they had nothing invested

(3) it is a sign that some people (obviously not all) had bad financial management skills if they couldn't save up a down payment, so 100% mortgages caused a lot of pain for lenders

Answer 2

More and more banks are starting to do this because of the housing crisis.  BMO is starting this policy in the fall with a required minimum 5% down and it has canceled  it's 40-year mortgage program.