Following the bursting of the housing bubble, lenders were requiring 20 percent down on loans or else consumers had to go with the Federal Housing Administration (FHA) for a low down-payment loan. Now some banks are offering mortgages for as little as five percent down, according to CNNMoney. The FHA’s reserves were heavily tapped when it was making loans during the housing bust, forcing it to raise premiums, which opened the door for other lenders. TD Bank offers loans for five percent down, and even allows borrowers to receive two percent as a gift from a third party, requiring them to only have three percent of the sale price. MHProNews has learned while lenders require consumers to buy private mortgage insurance, it is only necessary until they build up 20 percent equity in the home.
(Image credit: HousingWire)