Can I buy a house for sale with less than 20% down?
Many people especially people who brought a house in say in the 80's and probably up until the mid 90's will probably tell you that they put around 20% down in order to qualify for their home mortgage. Well today you need to put down 20% in order to buy a house. Matter of fact there are some programs that requires no money down.
Today first time home buyers have a plethora of mortgage options if they can't afford to put down 20% on a house that they plan to purchase.
Down Payment for FHA $100 Down Programs: $100
A very good friend of mine who moved to Charlotte NC five years ago just brought a house around November last year. She told me that she used a FHA $100 Down payment program. The house she brought was a HUD owned home. In order to use the FHA $100 down payment program,home buyers must purchase a home which was previously financed via the FHA and which has since moved to foreclosure. Check with your local lender first to see if this program is available in your area.
Downpayment for VA Loans: 0%
VA is another government backed loan. Guaranteed by the Department of Veterans Affairs,it is a program allowing for no down payment. However in order to be eligible for a VA Loan,you must have served in the Army,Navy,Marines,Armed Forces or a member of the National Guard or Reserves. Spouses of deceased veterans can also use a VA Loan product. VA underwriting is very similiar to FHA underwriting in terms of leniency. One thing that is great about VA Loans is that there is no mortgage insurance. Want to be more educated on VA Loans? Read this online article on "Queen of Mortgages" Markita Aldridge Woods website What is a VA Mortgage Loan?
Downpayment for USDA Loans: 0%
USDA is a rural housing loan. Rural Housing loan is meant to help people buy houses in non urban areas nationwide. USDA Loans are available in all 50 states. Underwriting guidelines I've been told are similiar to FHA and VA Loans. There is a small mortgage insurance premium associated with USDA Loans which is less than a Comparable FHA loan and higher than a Comparable VA Loan.
There was an article out last year about the USDA Map Change Delayed till October 1,2015. Small area of Upper Marlboro MD which is a city in Prince George's County MD is a place where your can use a USDA Loan. Want to find out whether a house is eligible for USDA Loan? Click on the USDA Loan Map.
Downpayment for Conventional Loans: 5%
Many conventional loans used to be 20% down payment. But now you can get a Conventional loan with just 5% down payment. But since the Downpayment is less than 20%,PMI-Private Mortgage Insurance will be required. PMI can be paid monthly with the mortgage in a lump sum at the time of closing or "built in" to your mortgage rate. The smaller your down payment and lower your credit score,the higher your PMI rate will be.
Downpayment for FHA Mortgage Loans: 3.5%
FHA Loan was formed in 1934 and it has been one of the used Loan products used ever since it was formed. FHA Loans require a 3.5% down payment. It is a financing product that is very popular with first time home buyers because of the flexible underwriting standard. Also FHA Loans are more forgiving with respect to credit scores,assets and income.
Loan products varies from different cities and states. So check with your local loan officer or real estate professional about other loan products that are currently available. Also check with your employer or somebody in the Human Resources Department at your employer to see if they assist employees who are first time home buyers in buying a house.
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