Do you feel like you are never going to afford a home because you don’t have a down payment ready? Saving for a down payment might be one of the biggest roadblocks that potential homeowners face, but just because you don’t have a big down payment, doesn’t necessarily mean that you won’t be able to buy a home. In fact, there are a few federal loan programs designed to help first-time homebuyers like you. So the best thing that you can do is talk with a professional in the real estate and mortgage industry to learn more about the many options that are available. In this article we will discuss No Down Payment? Tips for Financing a Home without a Down Payment.
3% Instead of 20% Down
For a long time, it was traditional to save 20% down for a home purchase, but many people agree that 20% down is difficult to obtain. If you are planning to buy a $250,000 home, then it means that you need to have $50,000 saved for the down payment!
New FHA loans now allow 3.5% down instead, and there are other government programs that will accept 3% down. So, a $250,000 home will only require a down payment of $7,500, which is much more affordable.
Working with a Trusted Lender
Talk with a financial team that you can trust, and let them wade through the details of the loans. Some people are nervous about FHA loans because of the restrictions and regulations that need to be met for these types of mortgages. But, an experienced team will have the knowledge to work through the process and ensure that you get a good loan for your individual situation.
Some of the restrictions include things such as the fact that only fixed-rate mortgages are available, so you won’t be able to receive an adjustable-rate mortgage. Also, it is essential that the home will be your primary residence, and at least one of the individuals on the loan needs to be a first-time homebuyer.
Private Mortgage Insurance
If you choose to buy a home with one of these options, then you will need to pay for private mortgage insurance (PMI). This insurance plan is essential if you haven’t put down 20% on the mortgage. The good news is that you can cancel the PMI coverage once you have paid enough on your mortgage so that you have 20% equity in the property.
Just because you don’t have a down payment saved to buy a home, doesn’t mean that you won’t be able to qualify for a loan. If you are interested in buying a home, then the best thing that you can do is talk with a trusted real estate specialist to learn more about the many options that are available. At Duffy Realty of Atlanta, we want to help you find the home of your dreams, and we can help you connect with a good lender to work with. Call us today for more details: (678) 318-1700. We hope that you enjoyed our article on No Down Payment? Tips for Financing a Home without a Down Payment.