How to Buy A House With No Money Down

How To Buy A House With No Money Down
Buying your first home is exciting, but saving for a down payment can feel overwhelming. When you want to buy a house with limited money down, and you’re wondering how much home you can afford, you need to find a mortgage that can work with your budget. That’s where $0 down payment home loans come in. These are loan options that can help first-time homebuyers get a mortgage, even if they don’t have a down payment saved up quite yet.

UNDERSTANDING $0 DOWN PAYMENT LOAN
A $0 down payment loan is exactly what it sounds like, a mortgage that does not require a down payment. A no down payment mortgage helps homebuyers who may not have the funds saved up to make a down payment. Like any decision, there are pros and cons choosing a $0 down mortgage.
PRO – Buying a house with no money down means buyers won’t have to drain their savings to try to meet the down payment requirement of other loans.
CON – Typically, no down payment mortgages have a higher interest rate than traditional mortgages which can lead to larger monthly payments. However, once you’ve built up enough home equity, you may be able to refinance.
PRO – Since 0% down mortgages allow you get a mortgage without a down payment, you could get into a home sooner because you won’t have to worry about spending time saving up.
POPULAR $0 DOWN PAYMENT MORTGAGE OPTIONS
As luck would have it, some popular loans for first-time homebuyers also happen to be no money down options. Most notably, the USDA and VA government-backed loans are viable options for homebuyers seeking to buy a home with no money down.
USDA Loan – Guaranteed by the United States Department of Agriculture (USDA), the USDA Rural Development Guaranteed Housing Loan Program provides a mortgage alternative to rural property buyers with limited financing options. This location-based mortgage comes with 100% financing which means you don’t have to make a down payment
VA Loan – Partially guaranteed by the U.S. Department of Veterans Affairs (VA), a VA loan can help veterans, active-duty military members, and qualified spouses afford a home without making a down payment*. In addition to putting $0 down, it does not require mortgage insurance. There is an up-front funding fee that takes the place of mortgage insurance.
If you know about government-backed loans, you might be wondering if we forgot about the FHA option. Alas, we did not. While an FHA loan (backed by the Federal Housing Administration) is a popular loan option for first-time homebuyers, it is not a $0 down payment mortgage. The lowest FHA down payment offered is 3.5% — still relatively low.
One of the easiest ways to understand more about down payments is to talk it over. Connect with me today to learn more about your low and/or no down payment mortgage options.
*Down payment waiver is based on VA eligibility.
CRUNCH THE NUMBERS: Wondering what you can afford, even without making a down payment?
Reach out to me and see what you qualify for so we can get started home shopping. Licensed in both Kansas and Missouri.
Sandy Herrick
ReeceNichols Real Estate
913-205-4333
sherrick@reecenichols.com