In recent times much has changed about the financial industry, among lenders, and with mortgages. These changes have been made to combat the high rate of mortgage defaults that wrecked the housing and mortgage industries not so long ago. So many homebuyers were given mortgage loans on homes they could not reasonably afford, leading to a nationwide crisis.

Since the storm has finally began calming down, lenders are now much more demanding of borrowers than in the past. Steps are being taken to ensure the borrower is creditworthy and capable of paying off their debts and it is harder to get a mortgage loan than ever before. With credit scores much lower across the board than before, it is not easy to finance a home if you do not have all your finances in order.

Down Payment Required

Part of the loan application review process involves the requirement of a down payment by lenders. Most lenders require anywhere from 10-20% of the home’s purchase price to be put down in order to get a loan. If you have not saved enough, you may be refused a mortgage loan by some lenders. This means on a $200,000 home, you will need at least $20,000 in cash down. It is a lot of money as housing prices these days are much higher than in the recent past and are back on the rise.

There are some lenders, mostly governmental programs that will allow for less of a down payment. FHA loans for instance only require 3.5% currently. As of 2011, that percentage may be raised to 5%. Other programs like that of the USDA that offers mortgages to low income families in select areas may allow for no down payments but other criteria must be met to qualify.

Getting a Down Payment

The best way to achieve a healthy down payment is to start saving early. As soon as you know you are ready to be a homeowner, start putting away the cash. You can calculate the estimated amount of the home purchase price you can afford and then you can figure out how much needs to be set aside each month to stock away down payment money.

There is also down payment assistance programs offered in different states and through federal government programs. The majority of these programs have income limitations and not everyone will qualify. There are also down payment grants (money that does not have to be paid back) that are offered to eligible individuals.

Preparation for Homeownership

If you find it too difficult to save that much cash, you may want to rethink your preparedness for being a homeowner. Stashing your cash may be too difficult at the present time because of low income but in reality the cost of homeownership is expensive. It may not be the best time to buy a home of saving cash is a difficult task.

The best thing to do is explore your options. If your credit is good and you do not have a lot of debt, you may be able to secure a secondary loan to cover the costs of the home purchase and down payment in addition to a mortgage loan. If you are struggling financially or are unable to save enough cash towards a down payment in the immediate future, check out the variety of programs being offered at the local, state, and federal level. There may be a mortgage loan program that suits your needs and reduces the amount of upfront down payment costs you will be required to pay.