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20 Percent Down Payment Mortgages Coming Soon


It looks as though borrowers will need to come up with a 20 percent down payment if they want to snag the best deal on their mortgage going forward.

Per government sources, the Office of the Comptroller of the Currency and the FDIC have agreed on a 20 percent down payment for a so-called “Qualified Residential Mortgage” (QRM).

A QRM is a mortgage that will be exempt from the risk retention standards required under the Dodd-Frank Act.

In short, mortgage lenders who originate mortgages that are not considered QRMs will have to hold onto at least five percent of the mortgage before selling it on the secondary market.

That means mortgage rates on such loans will be higher than QRMs, because the latter will be less risky and more marketable.

The good news is that borrowers who are required to put 20 percent down will be able to get 10 percent of it as a “gift,” so it’s really only a 10 percent down payment requirement.

Additionally, FHA loans are exempt from the risk retention rules, so you can always go that route for a low-down payment mortgage.

However, mortgage insurance premiums on FHA loans were recently increased by another quarter-percent.

Looks like zero down mortgages were singled out as a major negative component of the ongoing housing crisis.

Back in January, Wells Fargo called for a 30 percent minimum down payment on QRMs, which critics felt would squeeze smaller lenders out of the game.

Read more: Do you need a 20% down payment to buy a house?

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