Home buyers are typically advised to put at least 20% down for a mortgage. Coming up with that amount can seem almost impossible if you have little to no money left over after paying bills each month.
Fortunately, if you want to buy a house but are worried about coming up with the 20 percent down needed for a downpayment, you still have plenty of options. There are still plenty of programs that allow you to buy a home with a low down payment or even no money down in 2018.
Here are some of the best programs that designed for homebuyers who don’t have a massive chunk of cash to put down at closing. Maybe one of these options will be the perfect solution to make your dreams come true.
#1 VA Home Loans
If you are a veteran, in the National Guard and Reserves or an active-duty service member, then you may qualify for a VA home loan. The VA offers 100 percent financing. So, you don’t need any money down. The VA does not require mortgage insurance. There is a funding fee, which must be paid by the borrower. However, the lender can roll the fee into the loan amount. The funding fee is typically 2.15 percent of the loan amount.
#2 USDA Loans
The U.S.Department of Agriculture (USDA) offers a zero-down mortgage for low to moderate-income families. This program was created to help rural development. The loans are only available in towns that have populations of 10,000 or less. However, this is quite a large area. In fact, the USDA program covers more than 97 percent of the United States. Many eligible smaller towns are located right outside major cities.
The USDA program was designed for first-time home buyers although there are some exceptions to this rule. USDA loans do not require mortgage insurance. There is an upfront guarantee fee of one percent. The lender can roll this fee into the loan amount.
#3 FHA Home Loans
The Federal Housing Administration (FHA) provides one of the most popular low down payment mortgage options in the country. Normally this loan product requires a minimum 3.5% down payment. However, 100 percent of the down payment money can be a financial gift from a relative or a non-profit organization. This allows a borrower to get into their home with no money down.
Contact your trusted mortgage professional to find out about these programs or others that might be right for you.
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About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.