For many first-time homebuyers the biggest obstacles to overcome when buying a house are likely the down payment and credit score. For some, their credit history may not be as established as a mortgage lender would like or it could have become damaged from a series of financial missteps. Credit is a topic for another day; today we are going to focus on the down payment. Let’s be honest with one another, saving money is hard. So, our attention is piqued when we hear things like, “No down payment”. But how true could that statement be?
It turns out that there are loan programs that don’t require a down payment. For example, the Veteran Administration has created a home loan for military men and women, including some spouses, that is 100% financing, meaning no down payment is required. Additionally, the USDA has a Rural Housing Service Loan that doesn’t require a down payment for homes purchased in rural areas. These are two examples of loan programs available, if you qualify, that require no down payment. Your mortgage lender may have other loan programs without a down payment requirement; it is certainly worth asking about.
While there are loans out there with no down payment requirement, most do require a certain amount down on the house. However, there are programs in place to assist home buyers, particularly first-time home buyers. For example, many loan programs allow for gifted funds; meaning, your family members could give you money towards your down payment. (Pro Tip: consider this instead of a wedding registry!) Another option are the state sponsored down payment assistance programs, which range from educational courses to grant money dedicated to assisting qualified home buyers. Most states offer programs like these to encourage their residents to move into home ownership. For more information on these programs please contact your local Stockton Mortgage Banker.
If you would like to learn more about what the requirements are for a home loan without a down payment, click the button below and one of our mortgage bankers will be in touch to answer your questions. On the other hand, if you would like to keep reading about down payment requirements, check out our webpage dedicated to helping a first time home buyer and anyone else looking for tips on the mortgage process.