Legal-Ease: New tools to help initiate home ownership

Years ago, buying a home was pretty straightforward. A buyer would pay a 20% down payment and pay off the remaining 80% over time. But as the demand for homeownership grew, more people without the 20% down payment wanted to purchase homes. Private mortgage insurance began to be used in the homebuying process.

In the years right before the housing crisis, people made assumptions that home prices would continually and aggressively increase every year. Lenders saw this as an opportunity to help more people who hadn’t saved the 20% down payment.

Decades ago, buying a home was a pretty consistent experience for most people. A homebuyer would save 20 percent of the value/purchase price of the home. The 20 percent would be the “down payment,” and the 80 percent to complete the purchase was loaned by a lender to the homebuyer, who paid back the 80 percent over a couple decades.

Lenders would find investors who would loan the money to the banks, so that the lenders could loan more money directly to homebuyers. Over time, some of the largest investors became federal agencies commonly known as Fannie Mae and Freddie Mac.

Read more about the homebuying process and new tools to help initiate home ownership in Lee’s article in the Lima News here: Legal-Ease: New tools to help initiate home ownership

Source:, “Legal-Ease: New tools to help initiate home ownership,” by Lee R. Schroeder, August 18, 2018

Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.

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