Home Sweet Home

I want to continue my conversation on home ownership.

Before the mortgage melt down many people were able to purchase a home using FHA (Federal Housing Association) loans without a down payment.

There were some loans that would finance 103% to cover closing cost for borrowers.

Those days are now long gone after the mortgage melt down.

However there are some options available for home financing with no down payment.

"Accumulating enough savings for a down payment, closing costs, moving costs and an extra cushion of emergency savings can be the most challenging aspect of buying a home.

These days, almost no conventional loans are available without a down payment of at least 3% to 5% of the home price or more."

Source MSN Money – Buy a home without a downpayment

I recently found an artlicle that talks about 3 ways you can use to finance a mortgage without a down payment.

 1.VA loans qualify for home financing with no down payment. 

Current military families and veterans qualify for 100% financing under the VA loan program.

You must have your VA Certificate of Eligibility before applying.

Following these 6 steps will help you with a smooth process into home ownership.  Be sure to get pre-approved before you start step 1.

1. Find the property suitable for your needs.

2. Go to a lender and apply for the loan.

3. Present your discharge or separation papers relating to latest period of service and/or a Certificate of Eligibility.

4. Property is appraised by approved appraiser.

5. Estimate of property's reasonable value is determined.

6. If application is approved, you get the loan.

 2. USDA rural development housing loans offer home financing with no down payment.

These loans are design to help low income individuals or households to purchase  homes in rural areas.

Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.

Applicants for loans may have an income of up to 115% of the median income for the area.

You can check the USDA Eligibility to see if you qualify.

There is a upfront loan guarantee fee of 3.5% that is required.  This fee can be wrapped up in the loan.

3. State and Local home buyer incentive programs offer home financing with no down payment assistance.

These programs sometimes offer down payment assistance, closing cost assistance, or low interest rate programs.

These assistance programs can also combine these programs together.

Each state and local program is set up differently.

They may be income or profession based.

Or they can be based on your income.

To find out about programs in your area check with National Council of State Housing Agencies.

I agree with the articles bottom line conclusion. 

Before you start shopping for a home or home financing no down payment options make sure you can afford the mortgage payment. 

Your mortgage payment should include your property taxes and insurance.

Even if you don't have to have a down payment you may still need money for closing cost.

I suggest you start a "life happens" fund before you start shopping.

You also need to have money saved for household expenses and maintenance.

You will need to save money for the home inspection.

You will need to have money to start your homeowners insurance.

Purchasing a home is a big financial investment.

Look at all your options for home financing with no down payment.

You may be surprised at the number of programs that you are qualified to participate in.

Home financing with no down payment can make your dream of home ownership come true.

If you are currently renting and want to purchase in the future start saving for a down payment today.

Is home financing with no down payment an option for you???

Your financial coach,

Renee Lawson

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