Low Home Down Payment Options
Most people think they need to have a large down payment in order to buy a home. In fact, the belief is that you’ll need 20% of a home’s price as the down payment amount. The amazing thing that most people don’t know is that 2/3 of home buyers purchase their homes with a down payment of 5% or less.
It’s possible to purchase a home with no down payment or a low down payment. There are a variety of factors that come into play when being considered for one of these loans. Lenders will look at factors that show them whether you are a good financial liability.
The Rock Star Group can give you more details on low home down payment options when you call them at 281-960-1900, but here are a few that may be available to you.
The Federal Housing Administration
The Federal Housing Administration (FHA) doesn’t make home loans. What they do is guarantee the loan that is made by a lender. The loan must meet certain qualifications, but this is a one option that may be right for those with a less than desirable credit score.
The FHA doesn’t judge credit scores with the same intensity that many lenders are required to do to give a loan. They look deeper into why the credit score is low. While they would like to see a credit score of 500 or above, they look closely at things like life circumstances when considering which loans to guarantee.
The Veterans Administration
The Veterans Administration (VA) provides home loans for military veterans who qualify. Like the FHA, the VA guarantees home loans secured through lenders. It is not uncommon for a veteran to purchase a home this way with no money down.
When a loan is secured through the VA, the veteran is charged a funding fee on the loan. The fee amount depends on their military service record and any previous loans of this type that they may have secured. The fee is included in the amount of the loan so that the veteran is not required to pay the fee upfront.
The Department of Agriculture
People seek this type of low home down payment loan before most others. The problem with this degree of popularity is that the department usually runs out of funds for loans before they can process all the loans seeking approval. They help a large number of people buy homes each year.
The best advice here is to get your application in the door early in the fiscal year. You may not know when this is or how to fill out all the paperwork. It’s this sort of situation that makes you appreciate the help of a real estate professional. They can make a huge difference when it comes to getting paperwork in on time and filled out correctly.
A common misunderstanding about this type of loan is that you must live in a rural area. They are open to homes being purchased in certain urban areas. This is a positive discovery for those who need a low down payment option but don’t wish to live in a rural environment.
The Navy Federal Loan
The Navy Federal Credit Union offers no down payment home loans in much the same way as the VA. The main difference is the amount of the fee charged. Typically, the Navy Federal Credit Union charges a smaller fee.
Loans secured through the Navy Federal Credit Union are meant for members of the military, their family members, employees of the military, and people who work for the U.S. Department of Defense.
If you’re interested in buying a home but are having a difficult time saving the usual 20% down payment, it’s worth the time and effort to check into other options. These options may allow you to make a low down payment or no down payment for a home.
Contact The Rock Star Group at 281-960-1900 to put their knowledge and experience to work for you when it comes to buying a home. They can cut through the red tape and help find a solution for your down payment concerns. Be sure to check our featured listings and sign up to get important real estate information right in your inbox!
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