Mortgage Options With Low Down Payments

Just about anyone can benefit from choosing mortgage options with low down payments. As home prices continue to rise, the timeline for financing a home seems to be only increasing in length. Today, we will cover what your options are for acquiring a mortgage on a home with the lowest possible down payments. Keep reading to find out more.

Government Mortgages

There are three types of government mortgages that come with little to no down payment requirements. The first of these loans is the FHA. The FHA loan is available to anyone who plans on borrowing money in order to purchase a home that they will live in as their primary residence. Naturally, this excludes homes that will be used as vacation homes or to rent out to others. What’s more, the FHA can be used to refinance the current mortgage you have on your primary residence. This makes the FHA a great option for anyone that is purchasing their first home or moving to a new one. The minimum down payment for an FHA loan is 3.5% of the total purchase price.

The second government loan is the VA. The VA is available to all members of the military: veterans, active duty, and reservists alike. The VA loan also comes with up to 100% financing, so there is no down payment required. The third government loan is from the USDA. The USDA also comes with up to 100% financing but is restricted to certain levels of income (low to moderate) and to homes located in rural areas. 

Private Mortgage Insurance

There are also three types of private mortgages that come with low down payments. The first of these is Fannie Mae. Also known as the “Home Ready” loan, a Fannie Mae loan requires a minimum of 3% down, a minimum credit score of 660, max income equal to 100% of the property’s area median income, and the completion of a homebuyer education course. It is important to note that you do not have to be a first-time home buyer to get this loan, but you will have to complete the course anyway.

The second type of private loan is Freddie Mac’s “Home Possible” mortgage. The requirements here are exactly the same as Fannie Mae’s. The final private mortgage option is a Piggyback Loan. A Piggyback Loan requires a minimum of 10% down, a credit score of at least 730, and 80% paid on the first mortgage as well as 10% on the second. The combined maximum amount of these two loans cannot exceed $1,700,000. For reference, a jumbo loan is any loan that is $970,800 or higher. 

Contact Us

At Equity Mortgage, we work with a variety of clients with varying degrees of mortgage needs. We offer our clients alternative options to their current loan programs with our wide range of mortgage products and flexible lending practices. 

Experience fast, professional service for coronavirus mortgaging today and into the future. Contact us for more info or give us a call at 1-800-332-9221.

 


* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.