Take reports of lenders easing the credit squeeze with a pinch of salt.
It still holds true that the larger the down payment, the more likely you are to get a mortgage and at the lowest rate.
LendingTree recently released a study analyzing down payments for borrowers in each state and found overall, nationwide, the average down payment is down 9.4 percent since 2011.
Rather than lenders actually requiring less down, some of the decrease could be due to fewer investors coming to market with larger down payments, if not all cash.
With fewer moneybags investors to count, it could appear that down payments are dropping.
Another statistic could suggest, the opposite, a statistical rise in down payments - fewer Federal Housing Administration (FHA) insured loans.
The U.S. Department of Housing and Urban Development (HUD) reported in its 2012 annual report to congress, FHA insured purchase loans fell from about 777,000 in 2011 to about 734,000 in 2012 - the same period during the Lending Tree survey.
Statistically, with fewer people opting for lower down payment mortgages, the level of down payments could appear to rise.
Here's another statistic: The recent Federal Reserve Senior Loan Officer Survey (SLOS) found that only 8 percent of banks loosened mortgage credit conditions in the past three months through April.
However you measure reports of mortgage credit easing, the larger down payment remains the industry-underwriting staple. Lenders remain risk adverse and prefer to loan money to borrowers who share as much of the risk as possible.
Unfortunately the down payment remains among the greatest obstacles to buying a home, so get with it.
Here are a few ways to save more money, faster.
-Budget to save. You won't know where you can cut costs if you don't know where your money goes. A budget tracks your income and your expenditures. It lets you see money coming in and money going out and where you can curb expenditures and save money.
-Save smart. Find expenditures you can reduce and divert that money directly from your paycheck into a savings or other interest bearing account.
The more you save, the more options you'll have to diversify savings into investments for a better return on your money.
-Stop impulsive and compulsive spending habits. You don't need a jolt from the cafe every morning. That jolt is probably what's making you so impulsive. Wake up with a brisk walk instead of hot latte.
Stream movies and microwave your popcorn at home instead of going to the movies every Friday night.
Bag your lunch, go generic at the supermarket, reduce data gigabytes from 10 to 5 on your smart phone and wait until you get home to Tweet.
Likewise use technology at home to read magazines and get other information. Lose those print subscriptions, reduce your cable television channels and cut back on other services you can buy for less.
You get the idea.
-Dump credit. Stop the "emergency credit card" only nonsense. If you are saving money, there's your emergency fund. Any kind of credit allows you to spend more than you have and then pay through the nose for high credit card interest rates.
-Stop loaning money to the federal government. A tax rebate is nothing more than a loan to Uncle Sam, until tax return filing time, but you get zero interest. Adjust your W-4 to match your true tax liability and save the difference.
-Liquidate valuable hobby assets. What's more important? Buying a home or storing baseball cards? Something's got to give.
-De-clutter your garage, attic and closets. Use online services to sell you stuff to other rubes who are more interested in buying stuff than buying a home. When you move, you'll have less stuff and a smaller mortgage to take along.
-Get a job. A second job, maybe even a third. You don't have to be down on your luck to look for work. Seasonal work, a home-based business, working half a night shift, or otherwise finding additional sources of income can really help speed up that home buy.
Published: July 18, 2013
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