The Down Payment
 or most first-time home buyers, their down payment is 5 to 10 percent of the purchase price of the house. If you don't have that much cash sitting around, there are some alternatives.
How much can you afford?
Let's be clear, a 5 percent down payment on a $150,000 house would be $7,500, 10 percent would be $15,000.
And, you will need to make sure that you have enough additional cash to cover closing costs (2-5%) or $3,750 to $7,500 on that $150,000 house.
Example: $150,000 house
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Other options
Keep renting
If you don't have enough cash, there are alternatives, the first of which is that you rent for now and start saving money so you can afford to buy later.
Private mortgage insurance
If you have at least 3%, but can't make a 20 percent down payment, you will need to get private mortgage insurance. This protects the lender in case you can't make the payments.
Government programs
The government offers several programs to help buyers get loans with small down payments. If you are a certified U.S. military veteran, you can even get a mortgage with no down payment.
Family gifts
Will your parents, or other family members, give you the money needed to make a down payment?
Seller take backs
If you are in a buyer's market, you might be able to get the seller to help you. Either with the down payment, or by paying some of the closing costs.
Investment partner
An investor gives you some of the down payment money in exchange for equity in the house as an investment.
Down payment assistance
Every day hundreds of home owners participate in bond and grant programs to receive down payment assistance from nonprofit organizations.
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Next Step: Down payment stratergies
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Information subject to change at any time for any reason.
Copyright 1999, Austin Home Loan, All Rights Reserved
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