We continue our Finance Friday series on helping future first-time home buyers achieve their big goal, with the help of the OVM Financial Blog. This week our focus is on finding and qualifying for No or Low Down Payment Mortgage Loans.
As you may recall in last week’s post, people entering the home buyer market for the first time, should begin getting their savings and financial house in order at least a year ahead of time. Although there are attractive programs that make buying a home possible without a big down payment, consumers who have down payment funds qualify easier for loans, usually are eligible for more programs, and will do so at a lower mortgage rate.
Here are 3 approaches worth examining:
No down payment mortgages — The USDA and VA have programs that don’t require down payments, but an effective way to qualify for these loans is for borrowers to have some assets in bank, retirement or insurance accounts. Structuring the closing to include leftover funds is a good way to have reserves to show to lenders. Another is to plan ahead and apply tax refunds to an upcoming down payment.
Low down payment mortgages — The FHA has programs with down payments as low as 3.5%, and with research, one can often find conventional mortgage programs ni the 3-5% down payment range as well. As usual, better mortgage credit scores make it easier to qualify for these types of loans.
Down payment assistance — Here in North Carolina, there are programs that provide funds to help with closing on that new house for first-timers and move up buyers. Some are structured with an interest-free component.
An experienced loan mortgage officer can help first-time buyers navigate through all the options, and settle on those that are a good fit for their situation. If you have questions about no/low down payment mortgages, or other aspects of the home funding process, feel free to contact the Sanford office of Team Move/OVM Financial, at 919-774-0114.