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Tag Archives: Rates

Your Mortgage Rate With 20 Percent Down

Your Mortgage Rate With 20 Percent Down

 

 

Your Mortgage Rate With 20 Percent Down: A 20% down payment from a first time borrower doesn’t always generate a better rate than one with a lesser down payment.

1. When the down payment is less than 20% for a first time borrower, the mortgage rate is often secured by insurance. Because the insurance reduces the risk for the lender it can result in a lower mortgage rate to the borrower.

2. Conversely the loan with a 20% down payment does not enjoy the reduced rate as no insurance is provided against the risk so the rate becomes higher to the borrower.

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