In the past, it has been difficult for buyers to to get a mortgage without having a large down payment requirement. Some available options this year and going into next are the Federal Housing Administration’s low down-payment program. Now, banks like Wells Fargo, Bank of America, and TD Bank are offering as low as 5 percent in some mortgages to create an opportunity in the market and compete with FHA’s down payment loans.
TD Bank offers the “Right Step” loan with 5 percent down on mortgages and allows for 2 percent to be paid as a gift from a relative or third party. Most of the banks now offering 5 percent mortgages are requiring borrowers to pay for Private Mortgage Insurance (PMI), and maintain mortgage and home insurance until there is 20 percent equity built up in the home. FHA requires PMI for the lifespan of the loan. To know what works best for you, research your options.
Source: Money News