In the past, in order to finance a property the minimum down payment was typically 20 percent down and 80 percent financed. In today’s market that is not the case.

There are now many ways to finance a property, whether you are buying an investment or primary residence. One way is to obtain a first and second mortgage; you can put 5% of your own money down, carry an 89% first mortgage and a 15% 2nd mortgage. The second mortgage, however, is usually at a higher rate than the first mortgage.

Investing less for the same property is nice but there are more downsides besides just a higher interest rate on the second mortgage loan. PMI is just about always required for buyers who don’t meet the standard 20 percent minimum.

Of course, one can always technically have the PMI requirement dropped by the lender after making some payments. But it usually doesn’t happen. Once the loan has been paid to the point where an LTV (loan-to-value) ratio is 80%, the lender should be able to consider removing the PMI cost from your regular payments. This usually happens due to appreciation of the property’s value and the individual making regular payments. Usually, however, refinancing or the sale of the property actually comes first.

The truly dedicated buyer can find other sources of financing. If you are purchasing a property in a new subdivision, the builders will often be willing to finance the home loan for the early purchasers, for as little as 5% down.

If you have excellent credit and are able to “think outside the box”, you can buy a property, then sell it, without ever actually owning it. It is possible to purchase a property and establish a legal contract, then sell the contract for a price of $500-$5,000 without ever taking ownership or being on the title.

Another type of deal in creative financing is ‘Sub2′, which means subject-to deal and that involves having a seller deed you the property while leaving the existing mortgage in place. You don’t legally assume to the loan, you just make the payments. This is not recommended for beginners but there are many variations on this new way of buying property.

Many people might not know it, but you can finance a property investment by forming a limited partnership, with arrangements covering the spectrum. In many places, each partner puts up some percentage of the cost, with usually a fifty-fifty split, although sometimes profit is apportioned according to that original percent that was invested. Good example would be, while the others perform services such as repairs on a ‘fixer-upper’, your other partner could be investing money. The deals can be as varied as people.

If you plan to occupy the property, there are many more options for loans through various government programs. To qualify for these loans you may have to meet other special conditions such as having a low income or service in the military.

You can even be your own source of financing by using a credit card, but taking this route involves a lot of pitfalls. Interest rates on credit cards are generally much higher than bank loans, and lenders will see your amount of overall debt and are likely to reject you for loans on the remaining value of the house.