George Duarte, Author at George L. Duarte

Buying a Home with no money down. If you dream of owning a house one day, you have probably realized that one of the biggest challenges is saving money for a down payment. You have already found your dream property, but then the lender asks you to put 20 percent down, which can be tens of thousands of dollars. Fortunately, there are alternative options available, and you may be able to purchase a home for no money down.

VA Loans

One option for qualifying borrowers is a VA loan. As the name suggests, this is a loan that is backed by the Department of Veterans Affairs, and eligible veterans may be able to qualify for a home loan with no money down. You still need to have a credit score that is high enough, and you must have a solid debt-to-income ratio. You will also need to reach out to a lender that has experience with VA loans to see if you qualify.

USDA Loans

Another option that could allow you to purchase a home for no money down is a USDA loan. This is a specific loan program that is available for borrowers located in rural areas who are going to use the property for a specific purpose. Borrowers need to have a credit score of at least 620, meet certain qualifications for debt-to-income ratios, and not learn more than 115 percent of the median income in the area.

FHA Loans

While you may not be able to purchase a home for no money down through an FHA loan, this can make your home loan much more affordable, and you don’t necessarily have to be a veteran or located in a rural area. An FHA loan could allow you to purchase a home for 3.5 percent down as long as you are a first-time home buyer. You may still have to purchase private mortgage insurance (PMI) until you build up a certain amount of equity in your home, but it could make it easier for you to purchase a house for the first time.

Consider exploring some of these options if you are interested in buying a house.

Are you planning on using a mortgage to help cover the cost of a new home? If so, you will want to prepare your finances and figure out how you will manage all those wallet-draining monthly expenses. Let’s take a look at how to run a quick financial health check to ensure you are ready to apply for a mortgage.

Update (Or Start) Your Monthly Budget

First, it is essential to get the basics out of the way. If you haven’t already, it’s time to start a monthly budget to keep track of your income and expenses. Once you have a mortgage, it will be important to prioritize your monthly payments so that you don’t end up falling behind.

Starting a budget is easy and can be done with mobile apps, software, a spreadsheet or a pen and paper. List all sources of income so that you know exactly how much cash you are working with. Then, list out every one of your expenses. It can be tough to remember them all, so consider using debit and credit card statements from the past few months as a reminder.

Get A Copy Of Your Credit Report

Next, you will want to get a copy of your credit report so you can see what potential mortgage lenders will see when assessing your financial history. This is a free service that you can request once per year, so be sure to take advantage. Note that you will want to use government-approved websites for requesting your credit report. Be wary of scams.

Do You Have A Down Payment?

A down payment is not required for every home purchase, but having one saved up can make the buying process easier. The amount you will want to have saved up will depend on the cost of your home, whether you plan on carrying private mortgage insurance and a variety of other factors. If possible, try to save up an amount close to (or more than) twenty percent of the home’s purchase price.

Ready? Chat With A Professional

Now that you have run a quick financial health check, it is time to meet with a mortgage professional to discuss your options.