How To Buy A House With No Money Down

How To Buy A House No Money Down

As the real estate market continues to heat up, are you afraid you might miss out on the chance to purchase your dream home? For many borrowers, the biggest obstacle to homeownership is coming up with a down payment. Fortunately, there are mortgage products available that allow borrowers to purchase a home with no money down.

  • VA Loan
  • USDA Home Loan
  • Specialty Loan

There Are Several Veteran & Active Duty Member Loans

Certain veterans and active duty members may be eligible for a no-money-down loan from the Veterans Administration. The government backs VA mortgages, and they can be an excellent option for low- and moderate-income borrowers who might not otherwise be able to get a traditional mortgage. Note that the sales price cannot exceed the appraised value, and you’ll also need to qualify for a VA-backed Certificate of Eligibility (COE).

VA Loan Pros

  • No Origination Fees
  • No Prepayment Penalties
  • Competitive Interest Rates
  • No Down Payment

VA Loan Cons

  • Higher Closing Costs
  • Usually Require a 620+ Credit Score
  • Can Only Be Used To Purchase A Primary Residence
  • You May Have To Pay A Funding Fee
  • Some Sellers Are Reluctant To Accept

Looking To Purchase A Rural Home? The USDA May Help!

The USDA home loan option is a zero-down program available to those who live in rural areas. To qualify, you must have a household income that is less than 115% of the area median income and meet strict credit guidelines.

Benefits Of USDA Loans

  • No Down Payment
  • No Maximum Purchase Price
  • Low Interest Rates
  • Upfront Guarantee Fee Can Roll Into The Balance At Closing

Drawbacks Of USDA Loans

  • For Rural Properties, Only In Designated Areas
  • Tend To Have Higher Interest Rates
  • Usually Need A 640+ Credit Score
  • Income Limits Are Enforced
  • Upfront Guarantee Fee Required

Specialty Loans Exist For Qualified Buyers And Applicants

Some people may qualify for zero down or little money down plans. These include the Good Neighbor Next Door loan for home buyers who work in specific public sectors such as law enforcement, fire fighting, and teaching. Also, Fannie Mae and Freddie Mac have mortgage programs for as little as 3% down. Shop around, and you may be able to find a lender willing to work with you on obtaining down payment assistance.

Zero Down Loans; More Pros & Cons

Here are some more advantages and disadvantages of zero-down programs, regardless of type.

Pros of Zero-Down Programs

  • You Can Keep Cash On Hand For Other Purchases
  • You Can Buy A Home More Quickly

Cons of Zero-Down Programs

  • You’ll Start With No Equity
  • You May Have A Higher Interest Rate
  • You’ll Need A Bigger Mortgage
  • Some Sellers May Balk
  • You May Incur Extra Fees & Costs

How Do I Know If A Zero Down Mortgage Is The Right Choice?

When shopping for a mortgage, always explore all your options. Consider key factors like down payment requirements, interest rates, PMI (if any), length/term of the loan, availability based on location or profession, restrictions, and any additional requirements before making your final decision. Applying for the right product can help you enter into homeownership with confidence.

Get In Touch With A Las Vegas No Money Down Lender

Blackmon Home Loans has several options available to qualifying borrowers if you’re looking to purchase with no money down. Contact us today and let one of our experts help determine if you qualify for one of our first-time home buyer loans. We love helping clients like you get into the home of your dreams without breaking the bank.

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