Are you purchasing a home for the first time? The biggest stress you might be going through right now is the down payment.
Saving on the down payment of a home loan can be as heavy as picking up a rock. But it doesn't have to stop you from getting a mortgage. Many first-time buyers believe that the downpayment of a mortgage is a minimum of 20%. But that isn't true. There are home loan options that require low down payments and sometimes even zero down payment. You just have to look for the right option and qualify for them. With a good credit score and other factors, you can get eligible for low down payment mortgage options. A few options are available for first-time buyers that provide low down-payments with essential eligibility criteria.
Read the options you can consider for a mortgage right below.
If you are buying a home in a verified rural area, USDA provides USDA loans. These loans do not need a down payment, but you have to meet the income and credit score requirements to apply for this loan. First-time home buyers need to satisfy the credit score that these loans ask for. However, you have to pay a guarantee fee that can be added to the mortgage amount.
VA loans are accessible for veterans, service members, or surviving spouses. It is backed by the U.S Department of Veteran Affairs and asks for no down payment. You do not have to pay any mortgage insurance with this kind of loan. However, similar to USDA loans, it asks for an upfront guarantee fee, which can be added to the mortgage. A tip for first-time home buyers- you can reduce the funding fee by paying a down payment. However, it is up to your choice. The loan does not require any money down.
Navy Federal Credit Union
It is one of the biggest credit unions offering zero down payment mortgages for military staff, their families, and U.S Department of Defense civilian employees. This loan type asks for a funding fee, but it may be cheaper than the VA loan funding fee based on your requirements.
Provided by the Federal Housing Department, FHA loans come with a 3.5 percent down payment. It is a low down payment mortgage option available to people even with a credit score lesser than 580. If you have a credit score between 500 and 579, you can be eligible for this loan but on a 10% down payment option.
These loans are offered by private lenders. Therefore, there might be unique criteria of the lender too.
Over to You
There are some other options for first-time home buyers with low down payments. You can look for tips for first-time home buyers to find mortgages at low down payments. Seek help from brokers to seek mortgages accessible to you. They can figure out what loan you qualify for and help you to apply for them.