Zero Down Mortgage Options
Conventional wisdom typically states that one should plan to have 10 to 20 percent to put down when purchasing a house, and even many first-time homebuyer programs require around 3 percent down. Yet, what if you would like to buy a house but don't have much, if anything, for a down payment? The good news is that there are home mortgage loan options available to you. The following can help you qualify for a no down payment program.
Are you a veteran?
VA loans are perhaps one of the simplest avenues for those looking for a zero down home loan. These loans are available to current and former military members or their spouses. Any branch of the armed forces, including the reserves and the National Guard, is eligible to apply for a VA loan. There are fees associated with a VA loan unless you qualify for an exemption, but the good news is that these fees can be added onto the loan amount so you do not need to come up with the money up front. Although the Veteran's Administration doesn't have any type of requirements for credit scores or loan amounts, the lenders that work with VA programs typically require a fair credit score. They may also only lend up to the amount that VA will guarantee, especially for those with shaky credit or minimal credit history.
Do you plan to live rurally?
If so, and you are low to middle income, then a USDA loan may be a good zero-down avenue to homeownership. Although some suburban properties qualify, most loans are only issued in rural areas. To qualify, your income must fall under the current USDA loan maximum. You will also need to pay a monthly insurance premium to secure the loan. A small fee will be required upfront, but the insurance will be added to the loan balance and charged monthly. There are also no credit requirements other than that you cannot have any delinquent payments due to the federal government.
Is your credit and income high?
Borrowers with excellent credit and a moderate to high income may be able to qualify for a zero down loan through a private lender. Credit unions, in particular, often offer these loans. You will need to pay the closing fees on the loan, and private mortgage insurance will be required. Many of these loans may also require that you complete a homebuyer's class. These programs vary by lender, so it is vital that you check individual lenders for the pertinent details.
For more help, contact a mortgage loan professional.
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