Mortgages Without Down Payment or Low Down Payment
Looking for home mortgages with low or no down payment? Check out this list to know more.
No down payment
- VA loan
- The Department of Veterans Affairs (VA), ensures buying mortgages without required down payment for eligible active-duty service members, veterans, and specific members of the National Guard and Reserves.
- Private lenders start VA loans, that the VA guarantees.
- The borrower gives a fee for funding, that can be moved into the loan amount.
- There is no mortgage insurance.
- Funding fees can be as low as 1.25% or as high as 3.3%.
- The U.S. Department of Agriculture's Rural Development program for mortgage guarantee is so popular, that before the fiscal year ends, it runs out of money.
- Did you know that Rural Development loans are not limited to farmland?
- The USDA has a map where geographical areas are marked to know which locations are eligible.
- This program is meant for first-time buyers, with a few exceptions.
- The program has household income restrictions.
- There is no mortgage insurance and the mortgage comes from a bank.
- A 1% guarantee fee is paid upfront, which may be rolled into the loan value.
- A guarantee fee of 0.35% of the loan balance is paid yearly.
- Navy Federal Credit Union
- The country's largest in membership and assets offers 100% financing to eligible members who purchase primary homes.
- Navy Federal qualification is restricted to the members of the military, a few civilian employees of the U.S. Department of Defense and military, and family members.
- The zero down payment program of the credit union is similar to the VA's, with a funding fee 1.75% less than the VA's.
Low down payment
- Federal Housing Administration (FHA)
- If you have a not so perfect credit history, FHA is the low-down-payment choice available for you.
- It has a minimum down payment of 3.5%.
- You will be charged with the 1.75% of your mortgage amount upfront.
- For 30-year loans with a minimum down payment, a 0.8% of the mortgage amount annual premium is charged.
- Mortgage insurance
- Borrowers who are qualified with private mortgage insurance (PMI) can make down payments for as low as 3%.
- For a lot of borrowers, PMI costs much less than the Federal Housing Administration mortgage insurance. However, PMI has credit requirements which are more strict.
- Another advantage of PMI over FHA is that, once your mortgage balance is below 80% of the home's price, you can cancel PMI. In order for you to cancel FHA insurance, you must refinance into a non-FHA loan.