January 7th, 2019 10:27 AM by Jackie A. Graves, President
FREEHomePurchaseAnalysis Today'sMortgageRates FREEHomeRefinanceAnalysis
If you want to buy a house but don’t have a lot of money for a down payment,
don’t lose heart. Your dream of homeownership is still attainable.
who can’t come up with big down-payment money have options. There are mortgages available
for a low down payment or even no down payment.
five options for mortgages with little to no money down.
Mortgages with no down payment or a small
guarantees purchase mortgages with no down payment required for qualified
veterans, active-duty service members and certain members of the National Guard
lenders originate VA loans, which
the VA guarantees. There is no mortgage insurance. The borrower pays a funding
fee, which can be rolled into the loan amount.
and construction loans, the VA funding fee varies, depending on the size of the
down payment, whether the borrower served or serves in the regular military,
Reserves or National Guard, and whether it's the veteran's first VA loan or a
subsequent loan. The funding fee can be as low as 1.25 percent or as high as
first-time buyers making no down payment, the funding fee is 2.15 percent for
members or veterans of the regular military, and 2.4 percent for those who
qualify through their service in the Reserves or National Guard.
shop for home loans to find the best mortgage rate.
2. No money down: Navy Federal Credit Union
the nation's largest credit union in assets and membership, offers 100 percent
financing to qualified members who buy primary homes. Navy Federal eligibility
is restricted to members of the military, some civilian employees of the
military and U.S. Department of Defense, and family members.
union's zero-down program is similar to the VA's, though Navy Federal's funding
fee is 1.75 percent.
3. No money down: USDA
Rural Development mortgage guarantee program is very popular and sometimes runs
out of money before the fiscal year ends.
borrowers are surprised to learn that Rural Development loans aren't limited to
farmland. The U.S. Department of
Agriculture has maps on its website that highlight eligible
geographical limits, the USDA program has restrictions on household income, and
it is intended for first-time buyers,
although there are exceptions.
mortgage comes from a bank, and there is no mortgage insurance. Instead, the
USDA levies a 1 percent upfront guarantee fee, which can be rolled into the
loan amount, and an annual guarantee fee of 0.35 percent of the loan balance.
4. Little down: Buy private mortgage insurance
borrowers can make down payments as low as 3 percent with private mortgage insurance,
or PMI. For most borrowers, PMI costs less than Federal Housing
Administration (FHA) mortgage insurance. But PMI has stricter credit
another edge over FHA: Once your mortgage balance is under 80 percent of the
home's value, you can cancel PMI. You can't get rid of FHA insurance unless you
refinance into a non-FHA loan.
5. Little down: Federal Housing Administration
minimum down payment of 3.5 percent, an FHA loan is
the low-down-payment option for people with tainted credit histories.
charges an upfront mortgage insurance premium of 1.75 percent of the mortgage amount.
On a 30-year loan with the minimum down payment, there's an annual premium of
0.8 percent of the mortgage amount, or $800 a year for each $100,000 borrowed
-- $66.67 a month for a $100,000 loan.
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