Half of Consumers Say They’d Never Be Able to Put 20% Down on a Mortgage

June 1, 2011 No Comments »

zero down

Old school thinkers generally say you should put 20 percent down on a home when taking out a mortgage.

After all, you can get a lower mortgage rate, qualify more easily, and avoid mortgage insurance costs.

But with home prices so high these days, it’s tough for prospective buyers to rustle up all that cash.

This was evidenced by a new poll released today from the National Foundation for Credit Counseling, which revealed that half of respondents believe they would never be able to come up with 20 percent to put down on a home.

A further 17 percent said they would have to borrow money for a down payment regardless of how much is required.

And 21 percent would need a loan that allowed for a much lower down payment, such as an FHA loan, which only requires 3.5 percent down.

Keep in mind home prices are lower than they used to be just a few years ago, so the down payment requirement wouldn’t be as high as it once was.

Just 12 percent said they’ve have “no trouble” putting 20 percent down, which calls into question the so-called Qualified Residential Mortgage currently in the works.

QRM loans would be exempt from risk-retention rules, and thus priced lower, but may require 20 percent down.

But the rules aren’t finalized, and there’s a good chance that 20 percent down payment requirement could drop to 10 percent to appease those who think it will hurt housing even more than it already is.

Read more: Mortgages with no money down.

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