How To Buy A Home With No Money Down In 2018
If you want to buy a home but you have no money for the down payment, you may be in luck. 87% of first-time buyers think they need 10%or more down payment to buy a home, according to National Association of Realtors.
That’s simply false.
In fact, the average down payment for the first-time buyer today is just 6%. And, a number of programs require no down payment at all. There are few types of no down payment mortgage programs you may qualify for. Here we are discussing the different types of zero down mortgage that are available in 2018.
The United States Department of Agriculture provides loans for the rural development. The USDA rural development loan is a zero-down mortgage for low-to-moderate income families. Another benefit of USDA loans is that the mortgage insurance premium (MIP) is much lower than the other type of mortgage available. Just 0.35% Compared to 0.85% for FHA loans. The annual MIP fee is added to your monthly payment.
If you’re a veteran you may qualify for a VA mortgage. VA loans offer 100% financing you need no money down. VA does not require mortgage insurance, saving borrowers thousands of dollars a year. Among all the programs available, these loans are cheaper.
The funding fee is not charged by VA loan. Because VA home loans do not require mortgage charge one-time funding fee to the program be self-sufficient. The fee is 2.15% of the loan amount.
The credit requirements for VA loan are lender dependent. The requirement of most lenders is 620 score, but lower VA minimum credit can be found with smaller lenders.
Navy Federal Credit Union
If you’re the member of the Navy Federal Union and are first time home buyer you may qualify for a no down payment home loan and no PMI. Home buyers choice mortgage programs for conforming and super jumbo loans. Conforming loans are afforded up to the loan limit of $424,100. Jumbo loans available up to 1 million.
Low Down Payment Home Loan
Federal Housing Administration (FHA) also provide a mortgage loan. FHA was created in 1934 to encourage home ownership by reducing the requirements to get a mortgage loan.
This loan program has much more flexible qualifying requirements than conventional loans, making them very popular among first-time buyers. If you have a least 500 credit score you can qualify.
If the credit score is 580 or higher than it, then 3.5 percent of the total home price is charged as down payment. FHA loans come with multiple mortgage terms to choose from. 30-tear and 15-year fixed-rate mortgage loans are the most popular. The 15-year fixed-rate mortgage will have higher monthly mortgage payment but you will save thousands on interest. You may be able to get an adjustable-rate mortgage depending on credit and the lender work with you.
FHA Loan Pros
- Down payment is only 3.5%
- Interest rates are also low
- Gift funds may be used for 100% of the down payment
- 500 credit score may be approved