Some loans will do 100% financing. Another similar loan option is called a piggy-back loan, where you get approved for the first and second mortgage at the same time. FHA loans require only 3% down. No matter which of these types of loans you obtain, the payment will be larger, your interest rate will probably be higher, and you will be required to buy private mortgage insurance (PMI).

Owning a home is often considered the better deal, but keep these considerations in mind:

• Many home buyers do not build any equity in the first few years-the bank takes it all in interest-and many move before they begin building equity
• Purchasers costs often increase due to mortgage interest adjustments, payment adjustments, increased property taxes, insurance premium increases, and maintenance costs
• The tax break for owning a home only kicks in if the deductible expenses (such as interest) are higher than the standard deduction
• There are other reasons that may make renting a better option:
• Many maintenance and repair costs belong to landlord
• Easier relocation for job opportunities without having the cost and hassle of reselling your home
• Often, more convenient access to transportation, employment, retail entertainment, and other common facilities

The mortgage lender will obtain a credit report. If you look at it prior to a loan application, you have a chance to clean up detrimental items before you have to explain them to the mortgage lender. Also, if your score is low, you can do specific things to increase your score such as paying down debt, increasing cash in the bank, and making payments consistently on time, over a period of time.

• Becoming either pre-qualified (a preliminary analysis of your debt-to-income ratio), pre-approved (NOT a loan guarantee-but analysis of credit report and income and a correlating maximum loan amount and interest options), or obtaining a loan commitment (guaranteed under pre-set conditions) will help speed up the loan process. Pre-qualifications indicate that you are a more solid buyer. However, only a loan commitment is a guarantee that you will get the loan.
• Another way to help speed up the loan approval process is to get your paperwork ready in advance.
• Check your credit score and clean up any old items. Have explanations for any remaining questions on your credit report.
• Gather any needed documentation such as personal identification, income verification and tax returns, employment history, and insurance commitments.
• And, most important, when the loan officer asks for any information, always respond promptly.

Points are a fee that is expressed as a percentage of the loan amount: one point is 1% of the loan amount.

Origination points are charged as a fee for some of the costs of the loan processing.

Discount points are basically a prepaid interest, or a fee to reduce the interest rate, known as a rate "buy down."