LOW AND NO DOWNPAYMENT FINANCING OPTIONS for Owner Occupant Buyers
Finding the home of your dreams is very exciting. When you walk into a home and realize it's the house for you, you don't want to risk losing it because you don't having financing lined up.
Inexperienced buyers often don't know the difference between being pre-qualified and pre-approved. A pre-qualification means that a loan officer has gotten some preliminary information from the buyer and arrived at an estimate of how much the buyer can afford to borrow. A pre-qualification is worth little more than the paper upon which it is written.
A pre-approval, on the other hand, is worth a great deal for any seriously motivated buyer. The loan officer has pulled the buyer's credit report, assessed their debt to income ratio, and determined how much the buyer can afford to pay for a home and how much the mortgage company is willing to lend. Offers with pre-approval letters attached are taken much more seriously than those accompanied by pre-qualification letters.
For some buyers, coming up with a down payment presents a problem. But there are several options for buyers who have little or no money for a down payment.
RD LOANS
RD loans are for people who live in rural areas. To qualify for an RD loan, a buyer must meet certain income requirements and must live in designated areas where these loans are offered. The benefits of RD loans include:
✔ Fixed, below market interest rates
✔ No down payment required
✔ Government insured
VA LOANS
Buyers who qualify can also obtain VA loans that require no down payment. These types of loans are available to qualifying veterans and active duty military servicemen and servicewomen. VA loans feature:
✔ Fixed, below market interest rates
✔ Low fixed payments
✔ No down payments
VA VENDEE LOANS
A buyer does not always have to be a veteran to obtain a down payment free VA loan. Under certain circumstances, non-veterans can get a VA Vendee loan on VA foreclosed homes. So this is a great financing option for investors and buyers looking for their next home. The benefits of VA Vendee loans include:
✔ Low closing costs
✔ No down payments
FHA PLUS LOANS
FHA plus loans require no down payment. However, they do require financing of the down payment in the form of another loan granted along with the mortgage loan. FHA plus loans are ideal for buyers who are experiencing some financial hardship but have demonstrated the ability to make a mortgage payment. The benefits of FHA plus loans are:
✔ Assisted down payments
✔ Easy qualification requirements
✔ Closing costs are financed
Each of these programs are reserved for first time home buyers. They are designed to give buyers who might otherwise be unable to qualify for other traditional loan programs an opportunity to buy a home. The government realizes the importance of homeownership to a vital economy and has made it much easier for people to achieve the dream of homeownership by implementing these down payment assistance programs.
For more information go to our buyer website.
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