Banks Loosen Standards On Down Payments

As a result of the 2008-2009 financial crisis, where many homeowners foreclosed on their properties, lenders raised credit standards considerably. The days of no money down loans are a thing of the past, with many banks requiring 20% down payments. But in light of recently improved economic conditions, some lenders are willing to approve mortgages with much smaller down payments. According to a new report, the average down payment in purchases with a 30-year fixed rate mortgage dropped to 16.1% nationwide in May from 17.6% two years ago. This article from Marketwatch.com explains that while a smaller down payment can make it easier to take advantage of today’s lower interest rates, the decision to buy a home with less money down could come with consequences.Continue reading.