First-time buyers have traditionally bought with zero down, or the help of a gift from a relative for a down payment. However, this traditional method of buying a home might be in trouble. According to my mortgage sources, at least two mortgage insurance companies will limit mortgage insurance to 95% loan to value by the middle of January in California. Chances are the others will follow.

This means that mortgages might have to be reduced to 95% of the value of the home. Therefore, no 100% financing.

First-time buyers, if you have a house in mind, now is still a good time to get in before the loan available to you is gone. Escrows are typically thirty days, so there might still be time to get in before this rule changes, as so many others have in lending lately.

Beyond the middle of January, be prepared to have at least 5% down to buy a home. Gifts from relatives however can count toward that 5%.

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