9 CLEVER IDEAS FOR BUYING A HOME WITH LITTLE TO NO DOWN PAYMENT

Down payment will have potential homebuyers splitting hairs on whether it’s worth their scratch or not. Truth is, there are unlimited misguided concepts surrounding down payments and its high time we shed some light. It’s not as bad as you think it is. The infamous “20% down” is not the only down payment option at your disposal. Homebuyers are resorting to low or no down payment options when purchasing houses and you could consider it too. Below are a few clever ideas that will help you maneuver the home buying process with little or no down payment.

1. CONSIDER THE FHA LOAN.

The Federal Housing Authority is considered one of the best options for anyone who is avoiding exorbitant down payment options. Their down payments can go as low as 3.5% which is quite impressive. Today, homebuyers can borrow up to 96.5% of a home’s total value. The FHA mortgages are designed for low-income earners, hence the options for making your down payment are very flexible. Anything from savings to down payment assistance is welcome.

2. THE VA LOANS.

If you want the burden of a down payment totally lifted off your shoulders, you should consider VA loans. The Department of veteran affairs, usually to US military veterans or their eligible surviving spouses, disburses the VA loans. In case you are seeking a mortgage for building a home and you belong to any of the above brackets, thin this is a clever path to follow. The ‘No down payment’ advantage does not come with extra costs such as insurance premiums. All you’ll need to pay is a small funding fee which is a one-time charge included in your loan balance.

3. USDA LOANS

These are no-down-payment home mortgages issued to home buyers in rural and suburban areas. If your residential area is not as modernized, then you may be eligible for one. The program is funded by the United States Department of Agriculture and has helped thousands of families to acquire homes.

4. THE HOME READY DOWN PAYMENT.

With the soaring prices of homes in the real estate market today, most people can’t afford to cough out large down payments. Home ready mortgages are those that lower their down payment rates by a fine margin. Usually, these loans are conventional loans with lower insurance premiums and are very flexible in terms of accepting financial gifts. Actually, you can use a gift to service your whole mortgage. The minimum credit score for qualifying for a home ready mortgage is 620 and you are good to go.

5. THE ‘PIGGY BANK’ LOAN

Is your credit score above average? I bet that’s great news because you are eligible for a piggy bank loan. You only get to cough a 10% down payment when closing the home mortgage procedure, hence most homebuyers find it affordable.

6. USE CASH GIFTS.

Using financial gifts is always a prolific idea for funding your down payment. Financial gifts come in forms, from either friends or relatives. It can be money given to you on your birthday, wedding, or to wish you a long life. Keep in mind that the sources of these funds are very important to your mortgage creditor. They usually need a gift letter which verifies that you don’t owe that money back. They may also ask for additional proofs such as withdrawal and deposit slips, hence it is advisable to inform the giver prior.

7. DOWN PAYMENT ASSISTANCE PROGRAMS.

Setting off a down payment is difficult for most home buyers, and this prompts them to postpone their plans for buying a home. Well, what you may not be aware of is the fact that you don’t have to do it alone. There exist down payment assistance programs through which you can be helped to offset your down payment. Typically, these programs will provide you with part or all of the down payment funds. These programs are steered by charities, private companies and the state hence their structures vary. Once you meet their minimum credit score, some programs will offer you as high as 10,000 $, especially if you are a first-time buyer.

8. HOMEBUYER GRANTS.

There are a couple of such grants across the U.S and their eligibility is very easy to attain. They help you counterbalance the costs of purchasing a home. They can do this through varied ways such as closing costs or partly funding your down payment. Thanks to federal funding, buying a home is now easier despite the shortages of homes, which lead to constantly rising prices. The government, through municipalities and individual states, offers first-time buyers grants to make the process easier for them.

9. LOW DOWN PAYMENT LENDERS.

In case you can’t find an affordable mortgage, then it’s possible that you are looking in the wrong direction. With lenders such as S.t Georges lenders, you can acquire mortgages with low down payments. You don’t have to be an AA first-time homeowner to qualify for one. Once your credit score, which varies from lender to lender is impressive you can purchase a home with such mortgages.

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