Coming up with the necessary down payment for a home loan can be a big hurdle for many would-be home buyers. Fortunately, there are options available including loans that require no money down. These loans generally carry a higher interest rate, but even so, these loans can be very affordable when you factor in today's overall rates.

For self-employed buyers and others who have a difficult time documenting income history, this loan may be for you. Programs exist for up to 90% financing. These loans carry a slightly higher interest rate, but generally speaking, the more information you can document, the lower the interest rate. There are certain liquidity requirements typically associated with this type of program. Even so, it is one of the easiest programs for many buyers today!

The Federal Housing Administration (FHA), offers loans for low-to-moderate-income home buyers. FHA loans have low downpayments, which typically run around 3 percent, and have relatively easy requirements. FHA mortgages have no income restrictions and even those with lower credit scores may be considered. Past bankruptcy does not necessarily disqualify borrowers from using this program!

In addition, the Department of Veterans Affairs (VA) offers a zero-down mortgage program. To take advantage of this program, borrowers need to be among those listed as veterans and service personnel in the U.S. military. One of the biggest benefits of this program is that it eliminates the need for private mortgage insurance!

With a fixed-rate mortgage, the interest rate stays the same for the life of the loan. But with an Adjustable Rate Mortgage (ARM), the interest rate changes periodically, and is typically tied to an index, and payments go up or down accordingly. Generally speaking, lenders charge a lower initial interest rate for the ARM than for the fixed rate mortgage. If you are expecting interest rates to decrease in the future, or if you are trying to maximize your purchase power today knowing your income will rise in the future, then this loan may be right for you. Also used when you only expect to be in the home a short time.