Mortgage Financing - Low Down Payment Home Loans

Low Down Payment

Many people who are contemplating buying a home would like to go into their deal with a low down payment. Traditionally, lenders have required that home buyers be able to make a down payment of at least 20% of a home's purchase price to get a home loan or mortgage. However, mortgage lenders will grant home loans to qualifying home buyers with a down payment of as little as 3 to 5 percent of the purchase price, if the mortgage is insured.

With private mortgage insurance it is possible to buy a home with little money up fron. In fact, home loans with down payments of less than 20% are increasingly popular. They are called "low down payment mortgages." This is good news for the millions of home buyers who are finding it difficult to save a large down payment, especially for their first house.

As with all things, there is a trade off. The lower your down payment is, the larger your monthly payment will be. Many people are simply not in a position to put up a 20% down payment though so low down payment mortgage financing is all that they can hope for.