Posted on: 5 May 2015
Buying a house is a dream of many Americans, yet many people find that it is too difficult to save up enough money for a down payment, and end up not buying a home because of this. But did you know that you might be able to buy a house even if you do not have any money to use as a down payment? Here are two important factors that you must meet in order to get a 100% home loan.
You must choose the right type of loan
There are four main types of 100% home loans that are available, but each may have requirements to meet:
- Veterans Affairs (VA) – VA loans are available to veterans and people currently be serving in the military.
- United States Department of Agriculture (USDA) – Qualifying for a USDA loan will require that you buy a house in a certain area, and your income must be lower than 115% of the median income in that particular area.
- Navy Federal Credit Union – These loans are specifically designed for people that are currently in the military.
- Federal Housing Administration (FHA) – These loans were originally designed for people in low income brackets. If you qualify for an FHA loan, the government will pay your private mortgage insurance (PMI) for you. Most FHA loans do require a small down payment, but this may only be around 3.5%.
If you can qualify for one of these types of loans, you might be able to buy a house without any money down, or with just a small down payment.
Your credit must be good
While each different type of home loan program has different guidelines, almost all of them have credit score requirements. VA loans are one of the most relaxed types of programs in terms of credit scores, though, and they typically only require a score of 620 for a person to qualify. The Mortgage Reports states that a person must have "decent credit" to qualify for a USDA loan, because there is not a specific score they are looking for. For an FHA loan, you may need to have a credit score of 580, according to Lending Tree.
Each type has different credit score requirements, but if your credit score is lower than the requirement, you may still be able to get a loan. The downside is that you may have to put a down payment on the house.
If you would like to learn more about home buying and the options available for you, contact a real estate agent like RE/MAX EXECUTIVES PLUS for help.Share