Buying a home can be daunting. Just finding the right home can take a lot of time and work, and that is only half of the equation. Filling out and submitting paperwork and organization finances requires a lot of time and coordination. That’s where the Tim Bullock Team of Union Home Mortgage can help.
Navigating the Loan Programs Available
Competitive options and interest rates can make home ownership a plausible reality for many buyers. No money down loans are an option that can put owning a home within reach for many buyers. Many private loan institutions offer no money down or zero down mortgage loans. It does not have the same appeal, but there are also low-down payment home mortgage loans available that may be a better fit for some buyers.
Assistance for Down Payments
Down payment assistance allows a buyer to select a percentage of the purchase price for a down payment. This amount is applied either to the down payment, closing costs or other expenses. After seven years the assistance is forgiven. If the home is sold or if the loan is refinanced within the seven-year period the buyer must repay the amount provided.
Help for Graduates
As an incentive to keep recent graduates in Ohio there is a down payment assistance option tailored just to grads. Grants for Grads allows for 2.5 – 5 percent down payment assistance. The assistance is forgiven after five years. If a grad sells the home and moves out of state before the assistance forgiven period they must repay part or all of the amount provided.
Moving on to Your Next Home
Down payment assistance is also available to homeowners who do not have the equity to purchase a new home. The down payment assistance is calculated as a percentage of the home’s purchase price. In order to be considered for the next home program the new home must become the buyer’s primary residence. It is worth noting that if the buyer continues to own the initial property that could impact eligibility in the next home program.
Rural Development Loans
The U.S. Department of Agriculture, or USDA, offers a very popular Rural Development loan, which is a zero-down loan. To be eligible the property must fall within specified areas. Despite the implication of the name, the property does not need to be farmland.
The VA, or Department of Veteran Affairs, offers guarantees mortgages with no money down for qualified active-duty service members, certain members of the National Guard and Reserves and veterans. This type of loan originates with a private lender and the VA guarantees the loan. There is a funding fee the borrower must pay, but this can be added to the principle to avoid the payment being due upfront.
Navy Federal Loans
There are a lot of similarities between VA loans and Navy Federal loans. The most significant difference is that the funding fee for a zero-down loan through Navy Federal is lower than the fee for a VA loan. In order to be eligible for a no money down mortgage loan from Navy Federal the residence purchased must be a primary home. The buyer needs to be a member of the military, a civilian employee of the military or the U.S. Department of Defense or a family member of a person who is eligible.
Private Mortgage Insurance
Private Mortgage Insurance, or PMI, allows borrows to make a down payment as low as 3 percent. Federal Housing Administration (FHA) mortgage insurance typically costs more than PMI, making PMI a more cost effective option for many buyers. Another perk is that when the balance of the mortgage loan is less than 80 percent of the property value the PMI can be canceled.
An FHA, or Federal Housing Administration, loan requires a 3.5 percent minimum amount down. This is not the same as zero down, but for buyers with a less than stellar credit history this is a good choice. There are upfront and annual premium charges to factor in as well when considering a FHA mortgage loan.
Finding the Right Loan Program
No down payment loans are out there, but they can be hard to find. There are typically a lot of requirements a buyer must meet in order to qualify for a zero-down loan. A no money down mortgage loan is not always an option for home buyers, but in that case, there are many low down payment program to choose from. The Tim Bullock Team of Union Home Mortgage can help you navigate options and interest rates to find the best no money down home mortgage loan for you. Our team can help you sort through the options to find the best zero down loan for you.