You can make a small down payment — or none at all
Lenders say they often dispel the mistaken idea that homebuyers have to make down payments of at least 20 percent. In fact, some loan programs allow qualified people to buy homes with no down payment at all. Other loan programs allow down payments as small as 3 percent or 3.5 percent.
Keep some savings in reserve
Mortgage lenders don’t want you to deplete your savings on the down payment and closing costs. They want you to have “reserves” — cash, or assets that can be sold quickly, so you can take care of unexpected expenses without missing house payments.
Borrow what you can afford to repay
When people buy homes, they often “stretch” to make their initial monthly payments, on the theory that their incomes will go up over time, making house payments easier to cover.
But it’s smarter to live within your means. You can move up to a more expensive house after (and not before) your income rises. A conservative rule of thumb is that all of your monthly debt obligations, including the house payment, shouldn’t exceed 36 percent of your income before taxes.