When a person is looking to purchase a home they were told that they need to save so they can put down 20 percent of the total price as a down payment. This is no longer the case. With the prices of homes being so high this can be a lot of money to save up and most people do not have that amount of cash to work with. There are other options for people looking to purchase a home that does not have 20 percent of the price for a down payment.
The FHA loan only requires that a person put down 3.5 percent of the total price of the home. They need to have a decent credit score of only 580. If a person has a credit score of 500 they will need a 10 percent down payment. A person will need to have extra free mortgage insurance. There are some restrictions based on the price of the home but it is good for those first time home buyers.
If a person has served in the military they can get Veterans Affairs Loans where they will not have to put any money down. No mortgage insurance is needed. A person will need to show that they have served 90 consecutive days in the military during a time of way or 181 days during a time of peace. People that were in the National Guard or the reserves they had to serve for at least 6 years. If a person was wounded during service they qualify for this loan regardless of how long they served. If a person is a window of a military member that died on duty they can be approved for this loan.
The United States Department of Agriculture offers 0 percent down payments for people that have lower or moderate incomes. A person must be purchasing a home in a rural area. Almost 97 percent of the United States is covered by this type of loan. A person can also go online and check the USDA website to see if the home is in a qualifying area.
If a person belongs to a credit union they may be able to get a mortgage with little to no down payment. A person may also be able to get a lower interest rate. A person may have to meet some income requirements and have decent credit. Some credit unions require that a person have a credit score of at least 750 to get this loan. A person can get 100 percent financing so if they have good credit it may be worth looking into.
These are some ways that a person can get a mortgage for a home without having to put down a 20 percent down payment. The down payment can be preventing many people from owning their home. With these other programs, a person can enjoy homeownership without having to put down tens of thousands of dollars.