When getting a home, something buyers always have to think about is the mortgage loan that they take out. There are many moves that you can make on the market, but they can often be limited by your budget and circumstances. It doesn’t help that there are plenty of downpayment options that are way too demanding.
Homebuyers don’t have to settle for those alternatives, though. There are mortgage loans that don’t require any down payment at all, while others only charge a low percentage. Let’s explore those possibilities.
Assessing Down Payment Options
When you’re looking for just about any loan, a majority of the lenders will state that you need to put in at least 20% to 25% of the down payment. This is also what’s been encouraged in the past to make the sale price more manageable in the future. However, there are many things that can prevent this, such as current income and other payment obligations.
There are mortgage loans that require little to no down payment, though. These are often backed by the government or organizations under them. Be sure to get in touch with a trusted mortgage broker who can discuss what would be the best loan for you.
No Down Payment Options
Loans with no down payment options can be very helpful for first-time homebuyers. Keep in mind that most of these mortgages will have very specific eligibility requirements that you need to fulfill if you wish to get this. Here are a few examples.
- VA Loan. The VA Loan is offered by the US Department of Veteran Affairs. This fund is reserved for members of the military and requires no down payment. Applicants will only face a funding fee in exchange.
- USDA Loan. This loan by the US Department Of Agriculture offers a no-down-payment mortgage loan for homebuyers who are seeking property in a rural area. There is an upfront guarantee fee that can be paid alongside the mortgage price itself.
- Navy Federal Credit Union. Navy Federal has a zero-down mortgage loan for members and families of the military. They also offer the loan to the US Department of Defense employees. Compared to the VA loan, there are ways where the funding fee from this credit union may be lower.
Low Down Payment Options
As those zero-down payment options can be quite stricter with their requirements, there’s a chance that you’re unable to qualify for them. However, there are still other options open where only a low down payment is required. Here are a few options.
- FHA Loan. The loan from the Federal Housing Administration is open for many citizens who are seeking a mortgage that would require just a 3.5% down payment. Those with lower credit scores may be charged with a 10% down payment.
- Conventional 97 Mortgage. The Conventional 97 mortgage loan is one of many offered by Fannie Mae and Freddie Mac, a government-sponsored enterprise. This requires only a 3% down payment, accepting gifted funds to cover the expense.
- HomeReady Mortgage. The HomeReady mortgage by Fannie Mae only needs a 3% down payment. It’s also beneficial to homebuyers who may want more flexible underwriting on their loan to get a better price.
- Home Possible Mortgage. The Home Possible mortgage by Freddie Mac just needs 3% down payment as well. There are also flexibilities similar to the Home Ready mortgage, though this is more open for people with lower credit scores.
Buying A Home in Dallas With New Frontier Financial Inc
Martha Walters of New Frontier Financial Inc quoted “Don’t limit yourself to mortgages with high down payments. No matter your financial situation, there should be a mortgage loan program suitable for you. That way, you can purchase a house and pay it back on your own terms.”
Need a mortgage broker in Dallas, TX to discuss your options? New Frontier Financial Inc is a mortgage broker service that can introduce you to different purchase options. Call us at (469) 886-8300!