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More Banks Offering Up Loans for 5% Down?



For the last few years, buyers have been hard-pressed to land a mortgage if they didn’t have a 20 percent down payment, unless they turned to the Federal Housing Administration’s low down-payment loans.


But a growing number of banks are now offering loans with just 5 percent down, CNNMoney reports. For example, Bank of America, Wells Fargo, and TD Bank are among the banks reportedly offering mortgages with down payments as low as 5 percent.


TD Bank is offering a “Right Step” loan product that allows borrowers to get a loan with a 5 percent down payment while also allowing borrowers to get up to 2 percent of the sales price as a gift from a relative or third party. In actuality, then, borrowers would only need to come up with a 3 percent down payment themselves.


Banks that are offering 5-percent down payment loans, however, are requiring borrowers to purchase private mortgage insurance. Borrowers will have to keep PMI until they build up 20 percent equity in the home.


If you want more information on this new phenomenon, contact Synergy Mortgage Services located in Oviedo, Florida. Keller Williams Lake Nona has partnered with Synergy Mortgage Services for the past three years. Synergy Mortgage works with a variety of lenders that offer loan products and terms to fit your needs whether you are purchasing or refinancing your primary residence, vacation home or investment property.


Source: “Banks Offering Mortgages with Only 5% Down Payments,” CNNMoney (Nov. 5, 2013)




Low Down Payments

Media Contact: Victoria Melendez

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