BrickBack - I have to say that while the foreclosure rates continue to rise many of these purchases were made by people that wanted to cash in on the real estate market and because of this artificial demand the prices soared and later crashed because the market could not sustain those types of gains.
I think that many banks are requiring up to 30% down for some borrowers because of the high default rate.
When you put that much money down on a property you are less likely to walk away from it. I really do not like the 80-20 loans that offer a primary mortgage on the 80% of the value and a second mortgage on the remaining 20% value. I don’t know of too many banks still offering this option but it really creates a problem for the borrower if he has to sell his home and the market is declining in value because there was no equity when the borrower first purchased the home so they will be upside down in the mortgage.
I think that it is a better idea to wait until you have the money for at least a 20% down payment because then you will be in a better position should you have to sell.
The home buying class would probably help some potential home buyers understand the financial implications of buying a home because the mortgage is part of it but the taxes and the homeowner’s insurance is another part that many people forget about when they factor their monthly budget for a home.