Whether you're a first time homebuyer or simply trying to keep your costs low, you may want to find a mortgage that has a low or no down payment option. There are some very specific options you could qualify for, depending on your unique situation and your financials. Here are our top low and no down payment options:
The Navy Federal Credit Union offers members one hundred percent financing to members who purchase primary homes. Not everyone is eligible for this type of loan, because the Navy Federal Credit Union is only open to military members, family members of military members, and civilian military employees.
USDA loans are another type of loan that don't require a down payment. It's common misbelief that these loans have to be limited to rural houses, but that's not true. The USDA's website actually has a map that shows which homes are eligible for the loan. There's no mortgage insurance for this loan, but there is an upfront guarantee fee. This fee can be rolled into the loan.
Similarly to the Navy Federal Loan, the VA loan doesn't require a down payment. The loans originated by private lenders are guaranteed by the VA, and no mortgage insurance needs to be paid. Borrowers do pay funding fees, but this can be rolled into the total amount of the loan.
If you or the property aren't eligible for any of the above mentioned loans, you can still have mortgages with low down payments. If you take out a loan with private mortgage insurance (PMI) you can put forth as low as a 3% down payment. Unlike an FHA loan, this PMI is cancelled once you have paid under 80% of the home's value.
If you don't have a great credit score but want a mortgage, you can always apply for an FHA loan. You can put forth a down payment as low as 3% with this type of loan. However, you will have to pay PMI for the lifetime of the loan, so it may or may not be worth it to you to try to save up more of a down payment or work on your credit score.
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