Help borrowers reshape their old way of thinking

Many borrowers believe 20% down on their home purchase is their only option. But you know it’s not.

Take this opportunity to reinforce your role as a Trusted Advisor by offering a slightly different angle to your borrowers who have 20% to put down: Ask them to consider putting 15% down instead. Their monthly principal and interest payment will go up a bit, and they’ll need to purchase a small amount of MGIC mortgage insurance. BUT they get to hold on to the difference… in their savings… for investing… for making home improvements.

The effects of moving from Point A to Point B

  • By putting 15% down instead of 20%, borrowers actually save money on GSE delivery fees
  • Using that discount in combination with MGIC borrower-paid single or monthly premiums provides a wealth of opportunities for borrowers at minimal cost

Dispelling the Myth - Infographic

Shaping the opportunity for your borrowers

It may seem counterintuitive, but putting 5% less down (15% instead of 20%) can have many advantages for borrowers. There are numerous borrowers who could take advantage of this new line of thinking. Here are some reasons why they should:
  • During the first year after closing on a home, homebuyers tend to spend $8,233-$10,601 on appliances, furnishings and property alterations.1 If they put all of their savings into the 20% down payment, will they be prepared for these normal expenses?
  • 30% of Gen-Xers took loans or early withdrawals from their retirement savings during the Great Recession.2 Do you have borrowers who’d like to replenish those funds? Does your institution offer IRAs?
  • 30% of 2017 and 2018 purchase loans sold to Fannie Mae and Freddie Mac were done at LTVs between 75.01%-80%3
  • 68% of Millennial first-time homebuyers wish to put down less than 20%; 12% say they could put more down but would like to save money for other investments.4 Can you recommend a certificate of deposit from your institution?

Read our blog post to dig into the details: A new angle dispelling an old mortgage myth.


1 National Association of Home Builders special study, Spending Patterns of Home Buyers, July 2017
2 Federal Reserve Board of Governors Report, May 2017
3 Morstat data
4 ValueInsured, March 2018

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