Do you feel like you are locked out of homeownership because you cannot raise the 20% down payment? Don’t worry because we offer low down payment options! The low down payment options allow buyers to fast track the homeownership dream. Thus, the buyer does not have to wait for years to accumulate the savings to hit the 20% down payment mark.
So, how does the low to no down payment option help the buyer in the end?
1. The Buyer Puts Less/No Money Down
The 20% down payment requirement has been a significant hindrance to homeownership. This is mainly for first-time homebuyers who are mostly recent college graduates. Requiring fresh graduates who have not even cleared university loans to pay the high down payment makes it harder for them. Thus, they are left with the option of renting a home, as they struggle to raise enough down payments. The rising housing cost makes it harder for such persons ever to attain the 20% mark.
The low to no down payment mortgage option becomes the savior. With no money or as little as 3.5%, first-time homebuyers can begin the journey of homeownership. The government-backed low to no down payment mortgages started with the focus of helping such first-time homebuyers.
2. Helps to Fast Track the Dream of Homeownership
The homeownership dream could end up taking years as the buyer tries to raise the 20% home mortgage down payment. Remember, there are other costs to meet, like the closing cost, the private monthly insurance. Raising enough money to take care of these costs is not as easy for everyone. The low to no down payment option comes in handy, helping the buyers fast-track the dream of owning a home. This is by eliminating the down payment requirement (through the no down payment mortgage option) or reducing the Down payment amount (through the low down payment option). Hence, paying the other costs becomes much more accessible, reducing the time it takes to buy a home.
3. Buyers have More Cash at Hand
Buying a house in St. George Utah comes with some financial responsibilities, in addition to the down payment. A majority of homebuyers are left with little cash at hand upon paying the down payment. In some instances, the buyers are forced to let go of the nice house they had their eyes on. This is because they cannot afford the closing costs. Leave alone the installments on private monthly insurance. The low to no down payment mortgage comes in handy since the money the limited funds available can be distributed to cater for the other expenses. In the end, the homebuyer does not have to worry about being unable to afford the dream home.
4. They Don’t Have Strict Credit Requirements
Some low down payment home mortgages still do not have strict credit requirements. For instance, the FHA home loan accepts applications from borrowers with a credit score of as low as 580 so long as the borrower can pay a 10% down payment. However, note that the overall requirements are dependent on the mortgage lender you choose.
So, which are some of the low to no down payment options?
● The FHA Home Loan
The Federal Housing Administration-backed home loan is a low down payment option available through approved mortgage lenders. The FHA home loan comes with a 3.5 Down payment requirement so long as the FICO® score is at least 580. For borrowers with a FICO® score of between 500 and 579, the down payment is 10%.
● USDA Home Loan
Guaranteed by the United States Department of Agriculture, the USDA loan is one of the no down payment options. The borrowers need to ensure the property is within the eligible locations. The FICO credit score for the USDA loan is at least 640. However, the credit score requirement varies by the lender.
● VA Home Loan
Backed by the United States Department of Veteran Affairs, the VA home loan is a no down payment home loan.
● HomeReady Mortgage
The HomeReady mortgage is available through many mortgage lenders. It is backed by Fannie Mae and provides mortgage assistance to those with a 3% down payment. The mortgage offers flexible qualification requirements.
The low to no down payment mortgage options enable thousands of new buyers to afford a home. Talk to a mortgage lender near you to discover the low to no mortgage options you can qualify to borrow.