Sales of existing homes decline for the fourth month in a row, mainly due to higher home prices combined with higher mortgages rates. The one thing that could help some people buy a home is the fact that the 3 percent down mortgage is making a return.
For just a 3 percent down payment, certain consumers can now get a loan from both government-sponsored lenders (Fannie Mae and Freddie Mac) for a home purchase or refinance transaction, which means the agency will finance up to 97 percent loan-to-value.
WSB Consumer expert Clark Howard says, "we are back to something that a lot of people said would never happen again."
Is it a good idea? Howard says he has mixed feelings about. It can be good for first-time homebuyers in some situations, but he also doesn't love the easy access to low down payment mortgages as an overall trend.
He says the credit score required to qualify for a loan is much lower now too. "A credit score as low as 620 or 640 could qualify you for one of these 3 percent down mortgages," says Howard.