According to a story on NewsOK, home loan investor Freddie Mac recently announced they are no purchasing mortgages that require extremely low down payments. In the past, lenders could offer loan with zero or one percent down payments, and then “gift” the remaining down payment to the buyer. This “gift” was actually not a gift at all – the lender would charge a higher interest rate to the buyer, inflating the cost of the loan to cover this “gift” and then some. Freddie Mac was worried that this led buyers to pay higher rates without understanding actually what they were getting or paying for. However, it is important to know that Fannie Mae still purchases these types of loans.
What does this mean to the typical home buyer in central Oklahoma? It basically means that you will most likely need to come up with at least 3% down payment if you want to purchase a house, unless you qualify for a VA or Native American loan or some other type of low-down-payment mortgage loan.
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