Yes, You Can Buy a House Without a Hefty Down Payment — or None at All

There are roadblocks that can derail your progress in your homeownership journey. Trying to get a mortgage with bad credit is one example that could delay your ability to buy a home. But one of the biggest obstacles is the hefty down payment. As prices continue to increase, many hopeful homebuyers cringe at the thought of scraping together the money they need to purchase a place.

FHA Loans

Millions of people choose an FHA loan every year because of the advantages it offers them. One of the big ones is the small down payment required. These loans, backed by the Federal Housing Administration, require a 3.5% down payment to qualify. For example, if you are buying a $150,000 home, instead of $30,000 down, you would only need $5,250 down. Big difference! FHA loans are invaluable at helping homeowners who qualify to buy a house months, or even years, faster than they would be able to through traditional programs.

VA Loan Veterans Affair Concept

VA Loans

Veterans and their spouses may be able to use a VA loan to finance their new home, which requires 0% down. This is an exceptional opportunity for those who haven’t been able to save a down payment, or for homebuyers who would rather use their nest egg to buy furniture for their new place.

USDA Loans

If you’re purchasing a home in certain geographical areas that are considered rural, you may be able to get approved for a USDA loan that allows 100% financing. Keep in mind you will need to hit other thresholds such as credit score and income to qualify.

Down Payment Assistance

Special grants and loans may be available as down payment assistance to prospective homebuyers who meet the specific income and credit scoring requirements. This can ease the burden of a large down payment and clear the way to homeownership sooner than traditional mortgage loans.

What About a Down Payment?

Even with these low down payment options available, it pays to start saving as much as possible as soon as you decide to buy a house. Try these tips for socking money away.

  • Trim your budget. Write down your monthly expenses and whittle them away. Decrease your cell phone bill, your cable bill, and reduce the number of times you eat out. Stash your savings away for your down payment.
  • Put off big purchases. That new vehicle or two-week vacation can wait. Take the money you had earmarked for those expenditures and put it toward your down payment.
  • Make more money. Find some side work like delivering pizza or working retail. Put your extra income aside for your down payment.

Let’s talk about the best option for you and your family, and don’t be discouraged by the thought of a large down payment. Chances are good that you can eventually land your new house and a mortgage loan that fits your budget.

 

FHA loan based on loan amount of $200,000, down payment $7,000, monthly P&I $801.69, 30 year fixed, Interest Rate 2.75%, APR 3.79%. Monthly payment does not include PMI, taxes or insurance. Based on borrower qualification. Rates quoted as of 5/26/21

 VA loan based on loan amount of $200,000, no down payment, monthly P&I $859.66, 30 year fixed, Interest Rate 2.875%, APR 3.203%. Monthly payment does not include PMI, taxes or insurance. Based on borrower qualification and VA eligibility. Rates quoted as of 5/26/21

 

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