Loan Programs for Those Struggling with Down Payment
When buying a property, down payment poses a big challenge for many potential buyers. If this is the same for you, it is good to know that there a few loan programs that can let buy a home with little to no down payment. It all comes down to meeting their set of requirements before you can finally start your journey towards homeownership.
These mortgages are backed by the US Department of Veteran’s Affairs. VA loans aim to help the members of the armed forces buy and finance their choice of home. The department will cover the mortgage and protect the leader in case the borrower chooses to default on the payment.
VA loan companies like Primary Residential Mortgage, Inc. note that main advantage of these mortgages is that you can obtain a loan without paying any down payment, as well as private mortgage insurance (PMI). PMI comes with most conventional mortgages if you pay less than 20% of the down payment.
To obtain this mortgage, you need to meet the eligibility requirements, which are based on the current or former military service. It is also important to note that VA loans are exclusively for veterans, active military duty, surviving military spouses, and National Guard and Reserves members. You can check out this website for detailed eligibility requirements.
These loans are insured by the Federal Housing Administration (FHA) and are popular with many first-time homebuyers because of their less rigorous requirements. You can qualify for this mortgage with a down payment of 3.5% for a credit score of 580 and above. Having a lower score, however, does not necessarily exclude you from getting a loan.
The main downside of FHA loans is that you will need to pay mortgage insurance premiums, which protects the lender in case you default. You should also remember that while you can qualify for a loan with a lower credit score, it is likely that you’ll receive higher interest rates. Learn more about the requirements of FHA loans by visiting this site.
If you have further questions about these loans and other mortgage options, talk to a reliable lender. This can help you make an informed decision and find out whether you can qualify for your choice of home loan.