Coming up with a down payment can be challenging, especially for first time home buyers. The good news is, there are ways for qualified borrowers to get a mortgage with a small down payment, or even no down payment at all. Here’s a look at some mortgage options that require little or no money down.
FHA Loan: 3.5% Down
FHA loans are popular options for first-time home buyers because of the relatively small down payment, attractive mortgage rates and favorable credit requirements. An FHA loan is a mortgage that is insured by the Federal Housing Administration. The actual loan is funded by a private lender, which is then insured by the FHA. FHA-insured loans are less risky for lenders, allowing them to offer mortgage loans at a low interest rate with as little as 3.5% down. Learn more about FHA loans here.
Take This Quiz to see if you are eligible for FHA.
VA Loan: No Money Down
The Veterans Affairs (VA) home loan is a no money down program available to veterans, active-duty personnel, members of the National Guard and Reserves, and eligible surviving spouses. For those you qualify, a VA loan is the best deal around when it comes to home financing. Guaranteed by the Department of Veterans Affairs, VA loans require zero down payment and no mortgage insurance at all. The interest rate also tends to be lower than on conventional loans, because the government is taking on part of the risk. Learn more about VA loan here.