The end of the 0% down payment

That train has left: If you want to buy a house now, you'll have to put something into the deal. Here's what you need to know if you're looking to buy.


By Liz Pulliam Weston

Mortgage lending has changed dramatically in so many ways, but one of the most critical developments for homebuyers has to do with down payments.

Now you need one.

You didn't at the peak of the mortgage lending boom. Lenders were delighted to loan you the full purchase price of a house. Waiting to build up your savings seemed foolish because ever-rising home values in many cities could quickly price you out of desirable areas.

Today, as foreclosures skyrocket and home values tumble, lenders are demanding that borrowers have skin in the game, as I wrote in "Need a loan? Borrow like it's 1975." Though you can buy a house with as little as 3% down, a bigger stockpile can lower your payments and increase your mortgage options.

Here's how to figure out how much you need and where to get it.

To start, there are three break points you need to know: 3%, 10% and 20%.

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