The recent difficulties experienced by the real estate and mortgage lending industries have resulted in an outbreak of new rules and regulations making it harder for potential home buyers to qualify for mortgage loans. If you are a potential home buyer, how do these more restrictive guidelines affect you, and is it better to still make just the minimum down payment or to try to save a larger down payment?

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In times gone by, home buyers could qualify for most mortgage options with just a 5-10% down payment. As real estate values dropped, home owners found themselves trapped in mortgages they could no longer afford. Partially due to low or no down payment mortgages, home owners found themselves owing more on their home than they could sell it for, and mortgage products such as subprime loans and adjustable mortgages resulted in ballooning monthly payments.

Making a 20% down payment, as often required these days, may not be a realistic option for many potential home owners, though. This, of course, is bad news for lenders, potential home buyers, current home owners, especially those looking for home loan refinancing or mortgage equity loans, and the real estate market in general.

FHA loans require only a 3.5% down payment, although there is a push to increase this requirement to 5%. As other lending options have increased their down payment requirement and FHA loans have become the best option for low-down-payment loans, market share for FHA loans has increased from 2% to about 35%.

So, is a bigger down payment better? Bigger down payments can result in savings over the life of your loan on monthly payments, interest paid and avoiding private mortgage insurance.

When deciding how much to put down on your mortgage loan, mortgage equity loan or mortgage refinance, ask yourself if a larger down payment is right for you. Would putting $80,000 down instead of $40,000 leave you enough for the other expenses of home ownership?

Consider your options as well as your personal financial habits carefully when deciding what makes the most sense for you.

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