More Banks Offering Loans with only 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.

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

Source: “Banks Offering Mortgages with Only 5% Down Payments,” CNNMoney 11/5/13

FHA’s Mortgage Delinquencies Soar?

Interesting news to share! At a time when the mortgage market is seeing steady signs of improvement, loans backed by the Federal Housing Administration (FHA) continue to see an increase in the number of borrowers seriously delinquent on their mortgage and falling into foreclosure, according to a new quarterly report issued by the Office of the Comptroller of the Currency.

For the year ending March 31, FHA-backed loans delinquent 90 days or more increased nearly 27 percent, while foreclosures soared nearly 17 percent.

“We expect the new books will continue with their better performance, primarily because of the steps that were put in place,” FHA officials told CNNMoney. “And we are benefiting from having more high-credit borrowers.”

Source: “Closer to Bailout? FHA’s Mortgage Delinquencies Soar,” CNNMoney 7/9/12