I believe it is a bad idea to have a 3% down payment and I think the mortgage will be very high when the payment is so low. It is not worth it to get the mortgage so high and is not really useful if you cannot afford the mortgage in the later years. I believe that one must be very careful while doing the down payment and calculate it accordingly if they are able to pay the mortgage or not.
I think that anything in life is possible. This person may get lucky and inherit a large amount of money tomorrow. Things happen. I think that it can be doable if someone wants it bad enough. There is so much money moving around that all it takes is to find where it is. Or maybe I am just a dreamer.
This is what caused the recent housing bubble and now they want to create another one. Brilliant. 3% down means that if the housing market drops by 10% the person has negative equity. That means there is no reason for him to continue making payments. As ussual after the next bubble, the too big to fail banks will be bailed out at tax payer expense.
I think it's a horrible idea. 3% is way too little. I think somewhere along the lines of 10-20% is much more feasible... nowadays people want to get a loan for everything and that works fine as long as the interest rates are this low but once the situation gets back to normal I think a lot of people will have trouble paying their mortgage if it's too big.
When we do such a small down payment there isn't really a commitment about the place so the business might even not go ahead, so I agree with what you say crimsong, a bigger down payment is important.
The president is trying to force lenders to lower PMI as well. Looks like we'll see another bubble. As for people who deliberately walk out on mortgages just because the real estate market temporarily drops, they deserve every bit of hell they will go through as a consequence of doing something so short sighted.