Down Payments 1960 vs. 2007

I bumped into a loan officer today, worried that the mortgage industry was in such shambles that even wealthy home-purchasers would never be able to get loans in today’s market. His rationale was that since standards have tightened and most home-buyers are required to have at least a 5% down payment, no houses will be sold.

I tried to console this young chap but to no avail. I told him that 30 years ago people couldn’t even think of owning their home without at least 20% down. He retorted, “Back then houses were a lot cheaper so 20% down was nothing, but thanks for your positivity,” rather sarcastically.

That was that and my day went on. But I got to thinking, is 5% down today, since prices of homes are higher, the same as 20% 30 years ago? The answer, undoubtedly is no. I found a really fun calculator through a google search that allows you to put in the year, the dollar amount you paid for services/products and what that service/product would cost you today. I found that a $20,000 down payment in 1960, would actually be about $138,000 today.

I know that if the mortgage industry required you to have 20% down payment like they used to, then we may see a decline in home sales. Then and only then. This chap needn’t worry. Lenders ask for 5% down. If you want to own a $200,000 home, I do not think $10,000 is much to ask. Do you? Let me know your feelings on the matter, discuss it in our forum, the link is below.

Melissa Fish Loan Consultant & Copywriter for uslso

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1 Comment for 'Down Payments 1960 vs. 2007'

Irving

October 6, 2007 | 11:28 am

So many websites are here today and gone tomorrow, but I really hope this one stays for a very long time. Very interesting and helpful. Thank you….

1 Comment for 'Down Payments 1960 vs. 2007'

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