CNBC reports that increasingly, homebuyers are deciding to put lower down payments on their home purchases, increasing their risk should home prices begin to falter.
In the past 12 months, 1.5 million borrowers bought their homes with down payments of less than 10 percent, meaning they financed more than 90 percent. That marks a seven-year high, according to Black Knight Financial Services.
The good news is that the majority of this growth is not happening at the very lowest down payment levels. Most is happening in the 5 to 9 percent down payment range. In addition, today’s down payment loans tend to be fixed rate and first loans, not the adjustable rate and secondary “piggyback” loans seen in the days before the last housing crash.
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