With home prices these days it’s very hard to save up 20% of the purchase price as is traditionally expected. With the median home price being $230,000 you’d need to have $46,000 cash.
Just about all lenders these days offer 100% financing. However, if you are not putting 20% down than the lender will require you to have Private Mortage Insurance (PMI). The insurance will cost you hundreds of dollars every month. It’s cost will be included in you monthly mortgage payment.
The good news is that there are now programs that are structured to allow you to avoid the PMI. You simply need to talk with your mortgage lender about what loans are available for you. Your Realtor will also have a good idea of which lenders offer programs suitable for your situation. Your Realtor can save you a lot time looking around for the right lender.
Keep in mind that 100% loans still have closing costs! Closing costs are normally approximately $3000 and up. Your realtor can explain which fees you’re being charged are legitimate and which are “junk fees”. This can sometimes save you hundreds of dollars.
What if you don’t even have enough money for closing costs?
Some lenders have “grant”, “assistance”, “gift”, “bond”… programs where they will actually give you the cash needed to purchase. Your Realtor will know which lenders or government departments offer programs that you can utilize.