Could You Buy a Home With Nothing Down?

One of the biggest hurdles people face in their quests for home ownership is coming up with the down payment.

For a standard, traditional loan, you could need as much as 20 percent of the home’s purchase price as a down payment – and in many cases, that translates to tens of thousands of dollars.

Fortunately, you may not need to come up with such a large sum. In fact, there are several types of loans that you may be eligible for that don’t require a 20 percent down payment.

Loans That Don’t Require 20 Percent Down

Two major loan types don’t require a 20 percent down payment: the VA loan and the FHA loan.

VA Loans

In order to use a VA loan, you must be currently in the military or have been honorably discharged from the military.

With a VA loan, you can obtain financing with nothing down. If your loan is backed by the VA, you don’t need to buy private mortgage insurance – and that can save you a significant amount of money.

FHA Loans

With an FHA loan, you’ll usually need to come up with at least a 3.5 percent down payment. On a $200,000 home, that totals $7,000. Those are typically the requirements for borrowers with a credit score of 580 or higher. However, if your credit score is between 500 and 579, you’ll likely need to come up with a 10 percent down payment (which is still much more reasonable than the standard 20 percent).

The Low-Down on Low-Down-Payment Loans

Naturally, lenders all have their own requirements. You can – and should – shop around for the best mortgage rates.

Are You Buying a Home in the Tampa Bay Area?

If you’re purchasing a home in Tampa Bay or any of the communities within Pasco, Pinellas or Hillsborough Counties, we’d love the opportunity to help you find the place of your dreams.

Call us at 727-584-8480 or 813-961-6000. If it’s easier, you can also contact us online.