Mortgages With Little Or No Down Payment
One of the hardest parts of buying a home is coming up with the down payment. It may take years to save for a down payment, especially if you have a family. The Federal Housing Administration, or FHA, can help. The FHA helps insure home loans with small down payments, and even some private insurers have relaxed their down payment requirements. What does all this mean? It means that it is possible to get a mortgage with little or no money down.
If you’re looking to get a mortgage with little or no down payment, here are four options to consider:
- VA Loans. Have a family member in the military? You might qualify for a VA loan to help with your mortgage. The VA helps secure mortgages with zero down payment for qualified veterans, active-duty service members, members of the National Guard and members of the U.S. Army Reserves. How does it work? If you qualify for a mortgage through the VA, private lenders will originate your loan, and the VA will guarantee it. Getting your mortgage this way allows you to pay zero money down. Instead, all you pay is a funding fee, which ranges from around 2.15 to 2.4 percent depending on the type and status of your military service.
- USDA Rural Development Loan. The USDA Rural Development loan program isn’t limited to farmers purchasing farmland. This program helps potential homeowners buy and develop property in available locations across the nation. Eligibility for these loans is limited by location and household income and is intended for first-time buyers only. Some exceptions apply. If you qualify, there aren’t many loans with better terms. With a USDA Rural Development Loan, you’ll pay a 2 percent guarantee fee, which can be rolled into your loan amount, and an annual guarantee fee of 0.5 percent of the loan balance.
- Private Mortgage Insurance. Some qualified borrowers can get away with a down payment as low as 3 percent by using private mortgage insurance (PMI). PMI has stringent credit requirements to qualify, but it costs less than FHA mortgage insurance, and once your mortgage balance is under 80 percent of the home value you can cancel PMI.
- FHA Loans. FHA loans require a down payment of 3.5 percent to qualify. It’s an option that’s available even to people with poor credit histories. With a little upfront fee of 1.75 percent of the mortgage amount and a small annual premium of about 0.85 percent, FHA loans are hard to beat.
- 0 down payment options are available! To bridge the gap between FHA and Conventional loans, some programs cover the down payment that is available. Contact Timmy to discuss these options.
Looking For A Mortgage With Little To No Down Payment?
If you’re looking for a mortgage with little to no down payment, speaking with an experienced mortgage broker can help you figure out which type of loan will be right for you. Contact Timmy Ostrom at (877) 699-0353 today and get help financing your dream home with little to no money down!