Yesterday, a client of mine was informed that he would not be able to secure financing on a home loan unless he were able to come up with 3% for Private Mortgage Insurance (PMI).
In brief: PMI is insurance payable to a lender that is required when taking out a mortgage loan with less than 20% down (though there's been ways around it). It is an insurance in the case that the mortgagor is not able to repay the loan, and the lender is not able to recover its costs after foreclosing the loan and selling the mortgaged property.
First-time and zero down buyers be aware of this.
This is in direct correlation to the number of defaults on current loans and the escalating numbers of zero-down/ gimmick loans that are in foreclosure. YOU may very well be hard-working, pay-on-time; every time buyers.....but you're paying for the "sins" of others right now with a declining number of loan programs available to you.