One of the biggest concerns that many potential homebuyers have about purchasing a home is their lack of money for a down payment. While it’s true that in a perfect world it’s ideal to put as much money toward a down payment as possible, not all home loans require a significant down payment. In fact, some loans don’t require one at all. Don’t let fears of having to make a hefty down payment be a deterrent to pursuing the home you’ve always wanted. The reality is you have other options. Following are the three most popular loans for buying a home without potentially forking over your entire savings on a down payment.
1. USDA Loans
Formally known as a “Rural Housing Loan,” this type of loan is made possible by the U.S. Department of Agriculture. Borrowers who go this route can buy a home without making a down payment of any amount. To qualify for a USDA loan, you must have a credit score of 620 or higher and buy in an eligible rural or suburban area. You also must be within certain income limits. For more info about these limits and whether a USDA loan is a good option for you, let a Fairway of the Carolinas mortgage adviser offer some expert advice.
Click here for more on USDA Loans.
2. VA Loans
Veterans, active duty military personnel, military wives, honorably discharged service members and those who’ve served in the Reserves or National Guard may be eligible for a VA loan — which comes courtesy of the U.S. Department of Veterans Affairs. VA loans require no down payment and no Mortgage Insurance along with many other perks. These include — among others — flexible credit requirements, below-market mortgage rates and the absence of a maximum loan amount. For much more on VA loans, visit the Department of Veterans Affairs’ website. Then, consult with your Fairway of the Carolinas mortgage adviser.
Click here for more on VA Loans.
3. FHA Loans
FHA loans — which are insured by the Federal Housing Administration — do require a down payment. However, at just 3.5 percent in all U.S. markets, it’s still far less than you would pay on many loans. The other big advantage to FHA is you can typically secure this type of loan with a relatively low credit score. And, if you’re really lucky, you might just get the entire 3.5 percent down payment covered by a financial gift. This could come from a family member or a qualified non-profit or government agency. Check with your Fairway loan adviser to find out if an FHA loan is your best bet for keeping your down payment at a minimum.
Click here for more on FHA Loans.
Down Payment Assistance Programs
There may be a down payment assistance program for which you qualify. A lot of these programs are available at a local level, so it’s important to find a local Fairway lender to help you find the best down payment program for you.
You can check out different down payment assistance programs here.
While a USDA loan, VA loan or FHA loan might be right for many homebuyers, they aren’t ideal for everyone. Click here to explore alternatives. Also, please don’t hesitate to reach out to us today with any questions you have. We’ll be happy to walk you through your best loan options for a minimal down payment. Let’s plan to connect soon!
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Copyright©2021 Fairway Independent Mortgage Corporation. NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. All rights reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Opportunity. *Eligibility subject to program stipulations, qualifying factors, applicable income and debt-to-income (DTI) restrictions, and property limits. Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency. *USDA Guaranteed Rural Housing loans subject to program stipulations and applicable state income and property limits. Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency. *A down payment is required if the borrower does not have full VA entitlement or when the loan amount exceeds the VA county limits. VA loans subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit guidelines, and property limits. Fairway is not affiliated with any government agencies. These materials are not from VA, HUD or FHA, and were not approved by VA, HUD or FHA, or any other government agency.