Banks offering mortgages with only 5% down payments
Les Christie | CNNMoney | November 5, 2013 | link
Good news for homebuyers who don’t have a lot of cash on hand: Banks are offering loans with down payments of just 5%.
After the housing bubble burst, buyers needed to come to the table with as much as 20% down or they had to turn to the Federal Housing Administration for a low down-payment loan.
TD Bank’s “Right Step” mortgage, for example, allows borrowers to secure a loan with a 5% down payment. It also allows them to receive as much as 2% of the sale price as a gift from a relative or other third party, so they would really only need 3% down.
Why the change of heart? Market opportunity for one thing.