Short answer: it helps. If you are buying an investment property, it might be imperative. I haven’t heard of too many investors getting zero down loans. As far as owner occupied homes are concerned, we are beginning to see some of the more traditional forms of home buying now that the Age of the Option ARMs is gone. And it helps to have 20% – 25% down. There are better rates available with 25% down.

But before you groan, I must add that if you have good credit there are various options out there for you with no or very little money down. If your credit score is above 700, there is a very good chance that you might be able to buy a home with very little out of pocket expenses. Most banks and sellers will give you up to 3% back for closing costs without throwing too much of a fuss thus helping you buy a home with almost no money down. And your private mortgage insurance might be tax deductible. Check with your tax planner.

Lenders are also very open to “gift funds” that are contributed by family as part of the down payment or closing costs. See, you might have more than you think!

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