No Money Down

One important fact unknown to many home buyers is that a home can be purchased with very little down payment. Keep in mind however, that low down or zero down payment home loans are not right for everyone. The monthly payment will be higher, as the more money you put down, the less your monthly payment. BUT, if the difference is only a few thousand dollars, your mortgage payment will increase very little anyway.

Other reasons for selecting a zero or low down payment loan is to hold on to your cash. Again, if your monthly income is good and the higher monthly payment doesn't affect your qualification (and is in keeping with what you want to pay per month), then perhaps you would want to save your available funds for other purposes. Also, PMI is not an issue with these 100% loans.

Some banks and mortgage companies are now offering conventional loans to non-veterans with no down payment. Zero down home loans are especially popular among baby-boomers who prefer to keep their assets in higher returning investments like stock mutual funds or 401-K plans instead of sinking thousands of dollars into dead equity in their homes.