Mortgage options that require zero down payment enable first time home buyers to achieve their dream of owning a home. Thus, you can use your savings to clear the closing cost or other expenses involved in the home buying process. Here are a couple of no down payment mortgage options available in the market today.
Insured by the Department of Veteran Affairs, the VA home loans provide lenient requirements to borrowers. However, the VA home loan is available to the eligible active duty service members, the veterans, and their qualifying spouses. Ideally, the VA home loan is available through private mortgage lenders. However, the US Department of Veteran Affairs guarantees the VA home loan.
The VA Home loan can be used to fund the purchase of a primary residence. The borrowers can be allowed to purchase a home within a multiunit structure of up to four units. To qualify, the applicant must be willing to live in the home, which may be occupied by a spouse if the active member is currently deployed.
The VA home loan also allows the homebuyers to save on mortgage insurance. (The mortgage insurance is often a requirement for conventional mortgages). However, the applicant has to pay a funding fee, which is usually an onetime fee. Apart from being a no down payment mortgage, the VA home loan has no limits on the amount you can borrow.
Guaranteed by the US Department of Agriculture, the USA home loan is another no down payment home mortgage. The USDA home mortgage was established to enable new homebuyers willing to purchase a property within the listed rural and suburban areas.
Just like the VA home loan, the USDA home loan is available through different private lenders. However, eligibility for the USDA home loan is based on the location of the house you intend to purchase, and not on the occupation. Moreover, to qualify for the USDA home loan, you must meet certain income requirements, and the household income should not exceed 115% of the median household income within a particular area.