Don’t have enough money to buy a house? Don’t lose hope because having your dream house is still possible! There are mortgages available for a low down payment or even no down payment at all and here are some of them:
DEPARTMENT OF VETERANS AFFAIRS
The Department of Veteran’s Affairs offers a no down payment mortgage to a qualified veteran. Active-duty service and certain members of the National Guard and Reserve are also qualified. All the private lenders originate VA loans, which they guarantee and the borrowers funding fee can be included to the loan amount. The funding fee can be as low as 1.25% or it can reach 3.3% depending on the borrower’s status.
For Purchase and construction loan, the VA funding fee varies depending on the size of the down payment. Mortgages can vary depending on the borrower’s down payment, whether they served or serve in the military, in Reserves or National Guard, whether it’s a veteran’s first VA loan or subsequent loan. For first-time buyers with no down payment, the funding fee is 2.15% for members or veterans of the regular military and 2.4% for those who qualify through their service in the Reserves or National Guard.
NAVY FEDERAL CREDIT UNION
The Navy Federal Credit Union is one of the nation’s largest credit union assets and membership. Their eligibility is limited to members of the military, some civilian employees of the military, U.S Department of Defense and family members. It is one of the best in terms of financing because they offer 100% financing to a qualified member who wants to buy a primary home. The Navy Federal’s funding fee is 1.75 % and their credit union’s zero-down program is similar to the Veterans Affairs. Nonetheless, there’s still a lot of difference depending on borrowers status.
USDA is one of the best mortgage guarantee programs because of its loan offers. Their mortgage comes from a bank wherein there is no mortgage insurance. They only charge 1% upfront guarantee fee that can also be rolled into the loan amount. There is also an annual guarantee fee of 0.3.5% of the loan balance which is very small compared to others. Another thing is that the Rural Development Loans are not limited to farmland only. You can look for the map on their website which shows eligible areas. The USDA program also has restrictions on household income and it is only intended for the first time buyers.
PRIVATE MORTGAGE INSURANCE
For those who are qualified borrowers, they can offer you a low down payment which is only 3% including a mortgage insurance, or PMI. For some reference, PMI can costs less compared to other mortgage insurance. To qualify, you must complete the requirements because PMI is very strict. In addition, PMI also allowed in cancellation once your mortgage balance is under 80% of the home’s value. You may be able to cancel your monthly mortgage insurance premium once you’ve accumulated a certain amount of equity in your home.
FEDERAL HOUSING ADMINISTRATION
This is one of the mortgages that you should look for. FHA offers a minimum down payment of 3.5% to the firm’s approved lenders. This loan is a low down payment option for people with tainted credit histories. They charge an upfront mortgage insurance premium of 1.75% of the mortgage amount. For a 30-year loan with the minimum down payment, there’s an annual premium of 0.8 percent of the mortgage amount, or $800 a year for each $100,000 borrowed — $66.67 a month for a $100,000 loan.
Cover Photo Credits: Skybank financial