Originally Posted by pbrauer
President Bush's weekend campaign promise that he will push legislation allowing for no money down on some federally insured mortgages could cost taxpayers as much as $500 million over four years because of a higher rate of defaults, according to the Congressional Budget Office.And that was before the election, yet Conservative voted to give Bush another 4 years; which Bush used to wreck the economy with his homeownership plan. Those are the results Conservative voted for.
The election-year idea may appeal to those who can't save as fast as home prices are rising. But some financial planners warn that increasingly common no- and low-down-payment programs can be ruinous for some consumers -- especially if home values decline.
If housing prices fall, consumers with little or no money of their own invested in the home are more vulnerable to ending up with mortgages larger than the value of the house.
And those who can't afford large down payments usually don't have enough savings to serve as a cushion if someone in the household gets sick or is laid off.