Did the thought of buying a house in St. George, Utah, just cross your mind? First-time home buyers wonder how much down payment they need to save. Did you know there are low and no down payment mortgage options suitable for you? In this post, I unlock the secrets to buy a house in St. George with a low down payment. Keep reading to discover.
No Down Payment Mortgage
As the phrase depicts, no own payment mortgage is a home loan that allows the first time homebuyers and the repeat homebuyers to purchase a property with no money required. The homebuyer just needs to pay the standard closing costs. Otherwise, the homebuyer gets to enjoy 100% financing from the mortgage lender.
If the idea of zero down payment home mortgages sounds acceptable to you, the VA home loan and the USDA home loan could be considered.
USDA Home Loan
Backed by the United States Department of Agriculture, the USDA home loan offers qualifying buyers 100% financing. Initially, the mortgage was known as the section 502 mortgage, and today it is often called the rural housing loan.
The USDA rural housing loan is available to the buyers looking to purchase properties within the rural regions. However, do not confuse this to mean that it is for the buyers living in rural areas alone. It is available to buyers in suburban areas too. Apart from being a zero own payment mortgage, the USDA home loan is a low-interest mortgage loan.
So, what are the requirements for you to qualify for this zero down payment mortgage? Keep reading to discover:
- The household’s annual earnings should not exceed the median household income for over 15%.
- Agree to occupy the property as the primary residence
- Must be a US national or a qualified alien
- The property should be within the eligible site.
The VA Home Loan
Second, in our listing of the no down payment home mortgages, we have the VA home loan. Backed by the Veterans Affairs department, the VA home loan is available to the U.S military members and their surviving spouses. Apart from being an affordable home loan, applicants enjoy several benefits. For instance:
- You are allowed to use the property as intermittent occupancy
- Bankruptcy and derogatory credit does not disqualify you
- Does not require a mortgage insurance
Here are some of the requirements to be eligible for the VA home loan:
- You are an active-duty officer and served 90 continuous days
- A veteran who meets length-of-service (90 days in wartime and 181 straight days)
- Surviving spouse of a veteran who died while in service or from a service-connected disability
The VA home loan is a good option for first-time homebuyers with a low credit score and does not have enough savings to afford a high down payment.
Low Down payment Home Mortgages
If you can raise a down payment of any size, you can save through lower interest rates and, generally, better loan terms. Therefore, here are some of the options to consider when it comes to low down payment loans.
The FHA Home Loan
The Federal Housing Administration guarantees the FHA home loan to ensure affordability to the first time home buyers with a low down payment. With as low as 3.5%, first-time homebuyers can access the credit they need to achieve their homeownership dream. The FHA is also a low credit score loan type with lenient loan terms. Your debt-to-income ratio must be less than 43%. Further, you must prove that you earn a steady income. Most FHA home loans require a monthly mortgage insurance premium. Here is an overview of the requirements to apply and get approved for the FHA home loan.
- A fico score of at least 580 to make a 3.5 % down payment or FICO score of between 500 to 579 with 10% down-payment
- Debt to income ratio of less than 43%
- Provide proof of income
- Monthly mortgage insurance premium
The FHA home loans will make homeownership easier if you meet the set requirements.
HomeReady by Fannie Mae
The HomeReady loan is a 3% down payment loan. The mortgage type is ideal for middle-income homebuyers, considering borrowers who cannot make to 3.5% down payment to secure the FHA home loan. To qualify for the HomeReady loan by Fannie Mae, you must have a credit score of at least 620. With a credit score of above 680, you get better rates.
Therefore, if you are looking to purchase a home in St. George, Utah but afraid you cannot raise the high down payment, consider the low down payment or the no down payment home loan programs.