flexiblefullpage
Currently Reading

Some Lenders Now Offer Bargain Mortgages, but Experts Say They May Not Be a Good Idea

Advertisement
billboard
Financing

Some Lenders Now Offer Bargain Mortgages, but Experts Say They May Not Be a Good Idea

Americans can now buy a home with just 1% down, but experts warn there are risks associated with bargain mortgages 


June 6, 2023
Thumbs up above white house next to stack of coins
Image: Ruzanna / stock.adobe.com

Last month, United Wholesale Mortgage, the nation’s largest home mortgage lender, announced it would begin offering loans requiring down payments of just 1% of the home’s purchase price. Fellow lender Rocket Mortgage soon followed in its footsteps, announcing the launch this week of a similar program called One+, which doesn’t require borrowers to pay private mortgage insurance (PMI), or PMI that traditionally kicks in with down payments of less than 20%, Realtor.com reports.

These bargain mortgages create a more affordable route to homeownership for cost-burdened Americans, but experts also warn that low down payment loans could be risky for borrowers who have limited savings.

And as home prices have begun falling in certain parts of the county, buyers who don’t make larger down payments could find themselves owing more on their mortgages than their homes are worth in these areas.

“Making it easier for everybody to get a mortgage with only 1% is like putting candy in front of a baby,” says mortgage lender Shmuel Shayowitz, president and chief lending officer at Approved Funding in River Edge, NJ. “People who should not be buying homes will be encouraged and enabled to buy homes.”

Read more

 

Advertisement
leaderboard2

Related Stories

Financing

Soaring Interest Rates Send Mortgage Demand to 27-Year Low

Two-decade high mortgage rates are causing buyers and prospective sellers to pull back from the housing market

Housing Policy + Finance

The Fed Presses Pause, but Experts Issue a Hawkish Warning

The Federal Reserve maintained its federal funds rate in September, but experts warn the pause will be temporary

Financing

How Much Are Americans Dishing Out for Mortgage Payments?

The number of Americans paying $2,000 per month for a home mortgage has nearly tripled within the last two years

Advertisement
boombox2

Top Articles

Advertisement
boombox1
Advertisement
native1
halfpage2

More in Category

COVID-19 may be easing its grip on the U.S. after a disastrous two years, but lingering supply chain disruptions have builders holding onto their pandemic business tactics

An archive of NHQA-winning companies that represent home building's best in Total Quality Management

Don’t let the current hype about single-family B2R communities obscure the need to create long-term sustainability and asset value

Advertisement
native2
Advertisement
halfpage1

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.