How To Buy a House With No Money
Abstract
Requirements: 0% down payment Pros: Get 100% financing through the U.S. Dept of Agriculture No down payment is necessary Home purchase price is not capped Favorable interest rates Mortgage insurance fees are typically cheaper than FHA loans Cons: Excludes major cities from qualifying Requires an upfront guarantee fee of 1% Requires mortgage insurance Income restrictions 2. Requirement: 0% down payment Pros: No down payment required No private mortgage insurance required Backed by the U.S. government No prepayment penalties Low, fixed interest rates Easy qualification process Bankruptcy and other negative credit history do not automatically rule you out Cons: No down payment means less immediate home equity and higher payments Can only use it for primary residences 3. Requirement: 3.5% down payment Pros: Easier to qualify for than other kinds of loans Having a bankruptcy on your record does not dismiss your application Competitive interest rates A low credit score does not automatically disqualify you Low closing costs and mortgage insurance Debt-to-income ratio must be less than 43% Cons: Mortgage insurance is a requirement Less flexibility for loan term lengths The home must be move-in ready, cannot purchase a home to flip Can sometimes be a slow process to close the deal Credit scores less than 579 need 10% down 4. Use a Low Down Payment Conventional Loan Program First-time home buyers may be eligible for a conventional mortgage with a down payment of as little as 3%. However, depending on your circumstances, the sort of property you're buying, and other factors, the down payment requirements may change. Look for Local Down Payment Assistance Programs Many first-time homebuyers qualify for down payment assistance and other benefits through the state's local program. Requirement: Negotiation skills Pros: Fewer upfront costs You can use the money saved towards your down payment Cons: The seller may be unwilling to negotiate or pay closing costs Making the request in a hot housing market could dismiss your future offers FAQs What is the minimum down payment for a house? A conventional loan requires a 3% minimum down payment. Is a "Cash gift" down payment considered taxable income? Down payment sums over $15,000 you receive as a gift must be declared by the donor, not the beneficiary, on a gift tax return.
