| Saving the average 20% for a down payment on a | | | | (PMI). This insurance covers your mortgage should you |
| home can seem like a daunting task. If the selling price | | | | be unable to make payments. The cost of the |
| of the house you want to buy is $200,000, that means | | | | insurance varies depending on the lender and your |
| you need $40,000 in the bank to qualify for many | | | | specific situation, but expect to pay about $50 or so |
| conventional Home Loans. Fortunately, it is possible to | | | | for every $100,000 of your loan. You have a legal right |
| get 100% financing on your mortgage, which means | | | | to stop paying PMI once you have 20% equity in your |
| you need very little savings to buy your first house. | | | | home, and you'll probably have to fill out paperwork to |
| Here are some options: | | | | cancel your PMI. |
| Piggyback Loans | | | | Special loans |
| Piggyback loans are additional loans that help you | | | | Certain mortgage loans--like FHA loans or VA |
| cover the cost of your missing down payment. For | | | | loans--are designed for the special needs borrower. In |
| example, if your conventional mortgage covers 80% | | | | many cases, you can qualify for one of these loans |
| of the amount you need, you would need a piggyback | | | | with little or no down payment, provided you meet |
| loan for the remaining 20%. So if you need a $200,000 | | | | certain requirements like income restrictions, home |
| loan, your mortgage will be for $160,000 and your | | | | value restrictions and other criteria. Most mortgage |
| piggyback loan amount would be $40,000. Oftentimes | | | | lenders should be able to assess your situation and |
| piggyback loans will be Home Equity Loans or Home | | | | determine if you qualify for one of these special loans. |
| Equity Lines of Credit. | | | | If you don't have savings for a down payment, you still |
| Private Mortgage Insurance | | | | have many options available to you when you want to |
| In some cases, provided you have excellent credit and | | | | buy a home. It's possible to get 100% financing if you're |
| a solid income, you may be able to get 100% financing | | | | willing to take on an extra loan, pay for insurance or if |
| if you're willing to purchase Private Mortgage Insurance | | | | you qualify for special financing. |