As their apartment rent increased each year, Carla and keegan Benson started thinking about buying their first home. For just a slightly higher amount each month, they could move from being renters to becoming home buyers. However their student loan debt might create a barrier to obtaining a mortgage. With Limited funds available, the Bensons found several types of mortgages that only required 3 to 5 percent down payment. This Financing choice would probably require that they have mortgages insurance and could also result in financial difficulties if housing prices decline. They must also consider closing costs and real estate agent commission. Carla and Keegan have also discussed whether to use an online mortgage company or a local one. And then there's the decision of a fixed-rate or adjustable-rate mortgage. But before these things become an issue, they need to decide if they are ready to buy a home.

1. What are possible sources of down payment funds for the Bensons?

2. If they obtained a mortgage with a very small down payment, what concerns might Carla and Keegan encounter?

3. What actions would you recommend for the Bensons before they move forward with buying a home?