You’ve always dreamed of being a homeowner. Despite doing plenty of research on towns where you may want to live, you still feel like you’re far from ready to be able to buy because you don’t have a lot saved for a down payment.
If this sounds familiar, you aren’t alone. There are plenty of people in your situation that are ready to buy a home but don’t have money saved up for a down payment.
In a world where people are putting down cash offers on homes, a low down payment may seem impossible. Luckily for you, it is still very possible to buy a home without having to put a lot of money down.
Are you interested in seeing how you can buy your dream home with a low down payment? Here are your options.
Private Low Down Payment Loans
Did you know that there are loans specifically designed for people that don’t have a lot to put towards down payments? Low down payment home loans can make homeownership much more attainable.
These loans can be easy to get, all you’ll need to find is the right lender. While it’s possible to get these loans, it’s important to note that many lenders may require you to take out private mortgage insurance (PMI) to qualify.
PMI is a special kind of insurance that’s meant to protect the lender against losses in case you default on your mortgage. The cost of your PMI will depend on your credit score and down payment, but most are a small fraction of the loan cost.
The Federal Housing Administration is been helping Americans buy homes since 1934. If you’re having trouble securing a down payment, these loans can help you purchase a home with as little as 3.5% down!
Like with private loans, many FHA loans come with the stipulation that you need to purchase PMI to protect the lender.
This will only work on a case-by-case basis. However, it’s important to note that some lenders are very willing to work with borrowers to help them secure a lower down payment.
Taking a home buyer education course could help you lower your down payment. Agreeing to live in the house for a certain number of years can also help. Be sure to ask what your options are and you may be surprised at what you learn.
If you or your spouse served in the military, get in touch with your local Veteran’s Affairs office to see if your qualify for VA loans.
VA loans are designed to help current service members, veterans, eligible surviving spouses buy homes. If you qualify they’re one of the best options you have if you don’t have money saved up for a down payment.
The main benefit of VA loans is that they don’t require a down payment. On top of that, they come with very low-interest rates, don’t require PMI, and have limited closing costs.
Your Guide to Home Ownership
Buying a house with a low down payment can be much easier than you’d think. There are plenty of options available to you, all you need to do is ask and look!
Your down payment and mortgage are only one part of the home buying process. Browse our posts so you can learn more about budgeting, saving, and real estate.