Monday, June 14, 2021

How To Buy A Home With No Money Down in 2021

 


You may wonder how much you'll need as a down payment to purchase a home and it's less than you may think. A no-down-payment mortgage allows first-time home buyers and repeat home buyers to purchase property with no money required at closing, except the standard closing costs.

As the name suggests, a no-down- payment mortgage is a home loan you can get without a down payment. A down payment is the first payment you make toward the home, and it’s due when you close on that home loan. Lenders calculate your down payment as a percentage of the total amount you borrow.

There are currently two types of government-sponsored loans that allow you to buy a home without a down payment: USDA loans and VA loans. Each loan has a very specific set of criteria you need to meet in order to qualify for a no-down mortgage.


Options For A No-Down-Payment Home Loan


Let’s take a look at how you can get a USDA loan or a VA loan, the two loans that allow you to buy a home without a down payment in 2021.

USDA Loans 2021

A USDA loan is a loan backed by the United States Department of Agriculture. The government offers USDA construction loans and USDA loans to encourage development in rural and suburban areas. You can get a USDA loan in a rural area with $0 down.

Both you and your home must meet a few criteria to qualify for a USDA loan. First, your home must be in a rural or suburban area. Check out the USDA’s map of eligible areas to find out if your home qualifies. On this map, anywhere outside of an orange zone qualifies as a rural area. In addition, your home cannot be a working farm, it must be a single-family unit and you must live in the home as your primary residence.

You also need to meet a few financial requirements to qualify. The combined gross income in your household cannot be more than 115% of the median income of the county your home is in. Your debt-to-income ratio shouldn’t be higher than 45%, and you must have a FICO® Score of at least 640.



VA Loans 2021

You may qualify for a VA loan if you’re an active-duty service member, member of the National Guard, veteran or the spouse of a deceased veteran. VA loans are backed by the Department of Veterans Affairs and are another option if you want to buy a home with no down payment. VA loans allow you to pay a one-time VA funding fee that’s 2.3% of your loan value in lieu of mortgage insurance. For each subsequent use of a VA loan, the funding fee with no down payment is 3.6%.


In order to qualify for a VA loan, you must meet any one of the following service requirements:
  • Served 90 consecutive days of active service during wartime
  • Served 181 consecutive days of active service during peacetime
  • Served for more than 6 years in the National Guard or Reserves or at least 90 days under Title 32 orders, with at least 30 of those days being consecutive
  • Be discharged by reason of service-connected disability
  • Be the spouse of a service member who died in the line of duty or from a service-related disability

In addition to service requirements, you should have a credit score of at least 600 to get a VA loan.

If you meet the requirements and can qualify for a USDA or VA loan, not having to pay an enormous down payment is definitely an advantage, especially if you still have to pay closing costs. Avoiding or reducing your down payment means you have more savings to fall back on when emergencies arise.

Government-backed USDA and VA loans can allow you to buy a home with no money down. The fact that these loans are backed by the federal government allows lenders to be more lenient with down payment and credit requirements. Both you and your home must meet the guidelines to qualify for a mortgage, and you must meet service requirements with a VA loan.

You may also be able to get an FHA loan or conventional loan with a low down payment. A government-backed FHA loan with 3.5% down, which is a great option if you have not so great credit.

Today’s mortgage rates are low and it's a great time to buy a home. And many low-down-payment mortgages have below-market rates thanks to their government backing; this includes FHA loans (3.5% down) and VA and USDA loans (0% down).

Just remember that different lenders offer different rates and programs, so you’ll want to compare them to find the best deal on your low- or no-down-payment home loan. You can get started right here. www.iLendLasVegas.com


Down Payment Assistance (DPA) Resources 
Check your DPA eligibility: https://bit.ly/Down-Payment-Eligibility

Reach out if we can help!


Aundrea Beach-Greco

Mortgage Lender, CMPS

NMLS 333739

📱 +1 702-326-7866

📧 info@aundreabeach.com

🌐 www.AundreaBeach.com

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Aundrea Beach-Greco, CMPS. Licensed Mortgage Loan Officer. NMLS 333739

702-326-7866 info@AundreaBeach.com

Find me online www. AundreaBeach.com

Apply online at www.iLendLasVegas.com


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