Paying the required down payment can lower interest rates, avoid private mortgage insurance and build equity. But when unable to make the required payment, there are options for zero down payment or 100% financing. Those with good credit and low debt ratios can qualify for these programs. It can either be a single mortgage, or a combination of a first mortgage for 80% of the value of the house, and a second mortgage for the remaining 20%. The later combination negates the necessity for paying mortgage insurance. The second mortgage for 20% can either be a fixed mortgage or line of credit. Zero down mortgages allows borrowers to qualify for larger loan amounts at initial low monthly payments. But it should be noted that these programs come at higher mortgage rates and monthly payments can increase steeply over time.