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First Time Home Buyers How to get a No Money down Home Loan Mortgage

July 8th, 2006

First Time Home Buyers  How to get a No Money down Home Loan Mortgage

Real Estate

If you are a looking for a low down payment or no down payment home loan you might want to check out conventional loans.  If you have served in the military or are currently in the military you could qualify for a VA loan with no money down along with competitive interest rates.

The Federal housing Administration (FHA) is another option if you cannot qualify for the VA loan.  An FHA loan may ask for as little as 3 percent down. You can sometimes obtain a grant to help with the down payment if you are a low income qualifying applicant.  The problem with an FHA loan is that the loans dollar amount is limited.  With housing markets that can easily exceed most FHA loans this becomes harder to get an FHA loan.


Another option is to shop for a conventional home loan that will offer a wide selection of loans with no money down or low down payments.  You can expect that the private mortgage insurance will be added to the monthly payments with any of these loans.

One conventional loan with a zero down payment is Freddie Mac.  You can even sometimes get all the closing costs included into the loan amount of up to 3 percent of the loan amount.  That means that you can exceed the property purchase price by 3 percent.

If you want to get out of paying private mortgage insurance you will need to put 20 percent down payment.  This is an extra cost to having a low or no down payment mortgage.


A problem with financing your home along with closing costs is that you have maxed out the property value and you have no equity in the home.  If for some reason you needed to sell your home in the next couple of years you could end up still owing money on the loan if the value of the house dropped.  If you can stick with the loan for the long term you will very likely avoid this pitfall.

If you save up money first you are able to reduce your monthly payments.  The more money that you have saved the more equity you have and the less interest you will pay.  If have at least 20 percent down, lenders will be more confident in lending you money and you are not required to keep private mortgage insurance.

With housing values that are well into the $300,000 for many markets it becomes difficult to save a large down payment.  It may be necessary to go with a low down payment or no money down loan.

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Nicole Wilson
Best Syndication

Real Estate

Keywords and Misspellings: first home loan first time homeowner homebuyer loan programs no or low down payments refinancing refi home loan homeloans refinansing  investmint investing

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