LendingTree: Down Payments Drop to 15% in First Quarter

April 30, 2014

Down payments declined in the first quarter and mortgage lenders are loosening standards slightly as rates rise and the housing market improves, according to a new analysis by LendingTree.

Down payment percentages for 30-year fixed-rate mortgages fell to a 15.78 percent average in the first quarter, compared with a 16.01 percent average in the fourth quarter of 2013. Credit scores for borrowers also have dropped 6 percent year over year, LendingTree reports.

"As the housing market improves and refinance activity declines, lenders are adapting their guidelines to improve credit accessibility for borrowers," says Doug Lebda, LendingTree founder and CEO. "Relaxed lending guidelines translates to a larger pool of qualified home buyers that could boost the housing recovery. While lenders still need proof that a borrower has the financial ability to repay the loan, lenders have started to accept lower down payments and credit scores from potential borrowers."

The following states had the lowest average down payment percentage for a 30-year fixed-rate conventional loan, according to LendingTree:

  • North Dakota: 12.31%
  • Nebraska: 12.50%
  • West Virginia: 12.50%
  • Missouri: 12.89%
  • Alabama: 12.89%
  • New Mexico: 12.89%

The states with the highest average downpayment percentages are:

  • New Jersey: 19.36%
  • New York: 18.54%
  • California: 18.21%
  • Connecticut: 18.01%
  • Hawaii: 17.89%

Source: LendingTree

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