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EmailBanks push for higher down payments
The pool of potential home buyers may shrink as banks demand higher down payments, The Wall Street Journal reported.
Much of the push for higher down payments comes as banks try to lessen their risk. The reasoning is that by having buyers dish out more cash, they will be more invested in the home less likely to be delinquent on mortgage payments.
During the housing boom, many home buyers put little, if any, money on a down payment. Currently, the median payment in nine major U.S. cities is about 22 percent. That percentage has doubled in the past three years. Last week, the Obama administration proposed to gradually raise down payments to 10 percent on conventional loans, those guaranteed by Freddie Mac and Fannie Mae.
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