A down payment is the biggest hurdle most first-time homebuyers face. Most lenders prefer at least 20% down and require at least 5% to 10% down. Financing a mortgage with less than 20% down requires you to get private mortgage insurance (PMI). Putting more money down on a house may persuade lenders to overlook credit problems, as well as loan you more money.

To come up with a down payment, you can save money by cutting out extras, borrowing from your 401(k), or borrowing from family members.

You should have your down payment available at least two months before you apply for a mortgage.

If you are still unable to come up with 20% down, look for special mortgages or programs for first-time homebuyers or those with low income.