Blog

Blog

Ideally when you go to purchase a home, you will have between 10 and 20 percent of the total cost of the loan to put as a down payment. However, with the costs of homes on the rise, even coming up with 10 percent can be difficult for some buyers. Rather than waiting years and spending money on rent, some people prefer to get a loan through programs that allow for low or no down payment. In some cases these loans might cost more because you will need private mortgage insurance (PMI) or will have a higher interest rate, but it might be worthwhile depending on your individual situation.

VA Loans

Qualifying veterans may be able to get a loan through the Veterans Administration (VA), which guarantees that you can purchase a mortgage with no down payment at all. These loans come from private lenders, but are backed (guaranteed) by the VA, so there is no mortgage insurance and you only pay a small funding fee. Fees vary depending on whether you served in regular military, Reserves, or National Guard, and how many previous VA loans you have obtained.

Navy Federal Loans

The nation’s largest credit union, Navy Federal, offers 100 percent home financing for the purchase of a primary home (not a vacation or second home). Since only members of the military, their families, and some civilian employees of the Department of Defense can be members of Navy Federal, these loans are restricted to that group.

USDA Loans

The United States Department of Agriculture (USDA) has a rural development mortgage guarantee program, and is a popular one among many lenders and buyers. These loans are applicable to farmland, but can also be used to purchase homes in areas deemed eligible according to calculations like geography, household income, and whether you are a first-time homebuyer. The USDA levies an up-front fee of two percent rather than PMI.

Mortgage Insurance Loans

If you cannot qualify for one of the above programs, you might be able to get a conventional loan with low down payment and pay additional mortgage insurance. This insurance will be added to your monthly payments, and will be due as long as your loan is more than 80 percent of your total home value.

FHA Loans

Finally, you can consider FHA loans if you have at least 3.5 percent of the home’s purchase price for a down payment. These loans are ideal for someone who has a poor credit history and may have a hard time qualifying for a loan otherwise. These loans do include an upfront premium of 1.75 percent, and an annual premium of 1.25 percent, which adds up to about $100 a month per $100,000 borrowed.

If you don’t have 10 to 20 percent to put down, talk to your lender today about other options to see if you qualify for a low or no down payment loan.

August 5, 2015

Loan Programs With Little or No Down Payment

Ideally when you go to purchase a home, you will have between 10 and 20 percent of the total cost of the loan to put as a down payment. However, with the costs of homes on the rise, even coming up with 10 percent can be difficult for some buyers. Read More
July 28, 2015

The Basics on Home Equity Lines of Credit (HELOC)

A home is often the biggest asset that any person will ever own, which means that over time it can be a valuable way to generate money that you need by using the home as collateral for things like home equity lines of credit (HELOC) or home equity loans. However, Read More
July 21, 2015

4 Factors That Slow Down your Loan Processes

Surviving the real estate market is like getting into a competitive sport that requires extra effort and cash. You crave your dream house but the necessity of requirements prevents you from achieving it instantly. In order to buy your new home, you’ll need the help of a trusted home loan Read More
July 15, 2015

Avoid These Common Pitfalls When Getting a Home Mortgage

Buying a home is an exciting time, but it can also be a stressful time when you have to fill out a lot of paperwork and make decisions that can impact you for several years, and even decades, into the future. Before you sign any closing documents, here are some Read More
July 1, 2015

The Role of Rising Mortgage Interest Rates to Housing Prices

The Atlantic reports that mortgage interest rates will rise. But as with all volatile markets, no one knows the exact interest rate increase until the market corrects and the economists are just looking back. Many Americans find mortgage their biggest debt alongside student loans, and the most important one once Read More