Who thinks it is crazy to have to put a 20% down payment on a home these days?

Question

I know some people would like to say that "In my day, we had to put 20% down, no questions asked."

I'm here to say this generation is different, and the world is different.

Back "in the day" there were 15% interest rates so you could actually SAVE money by putting it in a bank. Now you get a .005 interest savings rate. Our society is not BUILT to save money anymore, it's meant to spend.

If we require a 20% down payment for all buyers, our economy would collapse because you would be eliminating most of the middle of the class and below.

Answer 1

They're practically giving houses away--IF you have good credit. Plus low interest rates! Heck GET TWO!! LOL!

Answer 2

I do not think it is crazy to have to put down 20% for a home loan.  A home is a privilege, not a right.  That means you need to earn it.  Second, our economy will not collapse if you save money, on the contrary, our economy is on the verge of collapse because people were not living within their means.

You need to change your mindset, you are blaming others for the daily choices you make.

Prioritize what you want, set goals, and start putting money away.  Interest rates on savings accounts may not be great, but look into other investment options (ROTH IRA, CDs, Money Market accounts, etc.).  If you want something, you have to work towards it.

Answer 3

Too many people can't pay off their home loans and the houses are going into foreclosure. This means the lenders don't get their money back that they loaned out.

Why would you keep loaning money to people who can't pay it back?

Answer 4

Actually, if "this" generation was putting down 20%, a lot of the current credit crisis would not exist.  The US economy would not be in the mess it is now.  Today, with single digit interest rates (ask your parents about 15%+ interest rates), the bank have been over extending credit to people who do not have the means to handle a mortgage, with such little down

Back in the Say

Saving...You can save a lot of money, by investing it.  There has never been 15% interest rates paid in bank accounts ever. With a conservative investments you can easily get around 5%.  Saving is the easy part.....Send less then you earn.  Our society is not built around spending that is more a marketing and advertising hit.  Look carefully, today governments are warning you to SAVE for the future.

Your last statement just makes no sense.  If you force people to save for there downpayments how would that eliminate the middle class ?  The middle class is dictated by there earnings, not their spending.  The economy, would take a bit of a hit as people saved some money, but in the long run the savings on interest payments would give these people much more spending $$ in the future.

Answer 5

How is it you haven't been listening to the news the last 2 yrs? the real estate market HAS collapsed because banks were lending money to people and NOT requiring down payments and low initial artes - and guess what - when those rates adjusted they couldn;t afford the new payments - which means they really couldn;t afford the houses and they had no equity stake in them from a down payment, so they just walked away and left the banks with all the losses.

If you can';t save money - you don;t deserve to own a house.

The only time you got 15% in a savings acct was the early 80's when inflation was running 18%

Answer 6

Not only is it crazy but completely unrealistic.  For a $180,000 home you have to put down $36,000.  If it's your first home, who the heck has that kind of cash to put down.  Not me and not for alot of other people.

Answer 7

Hey

Thats so lame.  Are you american or canadian.  Last time I heard its 10% down payment.  =(

Answer 8

your generation , you talk like 15% was  a few  centuries ago . Realtors need that down payment to assure that the house will be sold and that the time and paper work is all paid for . houses in my area are a dime a dozen now . my daughter is looking into a beautiful home with only 10% down . that's how great the time is to buy !

Answer 9

"Back in the day", there were absolutely not any such thing as savings accounts that paid 15 percent interest. On the contrary, we earned about 5 percent interest on any money we had in the bank -- but the mortgage interest rates were hovering up in the 15 percent or above range! The difference between what you could earn on investments and what you had to pay out in interest was actually far *greater* than it is today.

Anyone my age (older, but nowhere near ready for retirement yet) looks at today's single-digit interest rates for mortgages and wishes we had had such an advantage when *we* were first-time homebuyers.

Every generation can find something to complain about if they look hard enough. In my opinion, if more people had put down a good solid ten to twenty percent down payment on their current homes, the whole mortgage crisis wouldn't exist.

Answer 10

well idk about that, my mom is a realtor and she says you can get ones for 5%, 3% and even 0% down. its the interest rates that are the downers.

Answer 11

I've heard lots of stories of average folks (middle class and below) putting down 20% and even more on homes by not accepting the cop-out that "Our society is not BUILT to save money anymore, it's meant to spend." , which is baloney, as evidenced by the many (myself included) who live on less than we make, on purpose.By putting at least 20% down on a home it eliminates the need for either personal mortgage insurance (PMI) which must be paid when the value of the loan exceeds 80% of the value of the house, or a second mortgage with lousy terms to cover 20% of the loan amount to avoid paying PMI.