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Q.

The Nest Q&A

Can I opt for a no-money-down mortgage?

A.

You could, but it's really not a good idea. If your home loses value, you'll be in trouble. Here's why: Let's say you buy a house for $200,000 and you borrow that whole amount; then, in a few months, if the house goes down in value to $180,000, your loan will be higher than the value of your house. This may force you to pay the bank more than the actual value of the house if you ever decide to sell it. On top of that, if you get behind on your mortgage payments and have to sell your house for less than you paid, it won't be enough to cover what you owe the bank. The better option: an FHA-insured mortgage (fha.gov). It's a loan insured by the federal government. Basically, you can go to any lender that's FHA-approved. This kind of mortgage only requires you to put 3 percent down and allows you to finance a portion of your closing costs (which get rolled into the mortgage). That way, you at least have some equity invested in your home but don't have to pay as much up front.