Coming up with a 20 percent down payment might seem daunting, but it's more expensive without it in the form of extra fees like PMI [source: Kiplinger's]. And options for obtaining a mortgage without a hefty 20 percent down payment might be dwindling [source: Goldfarb].
Using a piggyback loan, or a second loan taken out at the same time as the principal mortgage loan, has made it possible to get into a home sooner, but this type of arrangement, often called an 80/20, generally means that the 20 percent going toward the down payment will have higher or variable interest charges and won't add anything to the bottom line equity that goes into the home loan repayment. However, as the housing market crisis drags on, many lenders are pulling back on offering these types of loans and are raising credit score and income requirements for buyers, and U.S. legislators are following suit by proposing restrictions on lending that may become law [source: Goldfarb].
There are government options available for those who meet income limits and can't afford a down payment, but these are tied to mortgage insurance fees, too, and may also become less available with talk of proposed U.S. budget cuts [sources: HUD, NAHB]. Without this help, some low-income families would find it impossible to save enough for a down payment. If you're able to save a set amount toward a down payment while renting, you'll save thousands of dollars in fees and interest as you settle into home sweet home with the 20 percent covered, and realistically, an upfront down payment may soon become the only option.