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.

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.
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