You Don't Need 20% Down

Is a down payment standing between you and your dreams of homeownership? Most people think you need at least 20 percent down in order to buy a home. But that isn't always the case. In fact, it's quite possible to pay much less than 20 percent — or even nothing at all.

Shop Around for a Mortgage

While most conventional loans require buyers to put down 20 percent on a home, there are several loans that don't. Aside from conventional loans, you should spend time investigating loans that are backed by the federal government. One of the most popular federally-backed loans is an FHA loan. This mortgage is guaranteed by the Federal Housing Administration and many buyers qualify for down payments of as little as 3.5 percent.

If you're a veteran, then you could score an even better deal. VA loans that are backed by the Veteran's Administration offer mortgages that require no money down. The same is true for USDA loans.

Research Financial Assistance Programs

If you're a first-time homebuyer, then you have even more resources at your disposal. You may qualify for financial assistance programs that help to offset the cost of your down payment — or eliminate it entirely.

Refinancing Can Eliminate PMI

When you put less than 20 percent down on a home, then you'll be required to pay private mortgage insurance (PMI). These payments are in addition to your monthly mortgage payments. But be aware that once you've got 20 percent equity in your home, you can refinance which will eliminate those PMI payments.