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Want to buy your own home but don’t have the money saved up for a down payment? Don’t worry – there are many ways to buy a house without spending any money upfront. In this blog post, we’ll explore some of those options and help you take the first step towards owning your own home. So what are you waiting for? Read on!
Zero Down Payment Options
VA Loans
VA loans are a mortgage available to active military personnel, veterans, and families. These loans offer 100% financing, meaning you don’t need to put any money down. VA loans also come with no private mortgage insurance (PMI) premiums, which can save you a lot of money over the life of your loan. The Department of Veterans Affairs (VA) offers a home loan program to eligible military personnel, veterans, and surviving spouses. To qualify for VA financing, you must meet the following criteria:
Requirements vary by state. In general, all first-time homebuyers who can afford monthly mortgage payments are eligible for down payment assistance programs in California, regardless of their income.
The best way to find out if you’re eligible for a particular down payment assistance program is to contact the organization or government agency that sponsors it. There are many different ways to buy a home without putting down 20%. Don’t be afraid to ask your mortgage lender about 100% financing or other options if you are qualified. It may be a lot easier to buy your first home than you think.
USDA Loans
The U.S. Department of Agriculture (USDA) offers several mortgage loan options for low to moderate-income applicants, including borrowers who are first-time homebuyers or lack substantial down payment funds and credit history. USDA loans carry no minimum required down payments on purchases with a sales price of $312,870 in most of the country. In addition, there are limits on the amount of money borrowed by county and city.
Pros and Cons of a No-Down Payment Mortgage
There are several pros and cons to consider when weighing a no-down-payment mortgage.
On the pro side, you can buy a home without any money upfront, which is a massive benefit for many people. Additionally, since you’re not paying down your principal balance, you’ll have more equity in your home sooner.
On the con side, the amount you pay per month will be higher, and interest rates might rise in a few years when your initial rate expires. Finally, mortgages with no-down payments typically have prepayment penalties if you decide to refinance or sell early on.
Bottom Line
Buying a home is one of the most significant financial decisions you’ll make in your life, so it’s essential to weigh all the pros and cons before making a decision.
For example, if you can afford the higher monthly payments and don’t mind potentially paying a prepayment penalty down the line, then a no-down-payment mortgage could be a good option for you.