Homebuyers are often advised to come up with at least a 20 percent down payment,
or face the likely additional expense of private mortgage insurance. But this
year, at least, that counsel would not have saved them as much money as in the
Rules put in place in late 2008 by Fannie Mae and similar rules adopted by Freddie Mac are less favorable to borrowers who put down 20 percent to 25 percent, considered to be the industry minimum. (Fannie and Freddie are the government-controlled companies that establish the underwriting standards for most of the nation’s loans.)
For most people, it turns out, smaller down payments result in lower interest rates. Whether that benefits borrowers in the long term, though, is open to debate.
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