Buy A Home With No Money Down
You don’t need 20% down to buy the home of your dreams! But you DO need to find a lender with experience and knowledge who is willing to think “out of the box” on your behalf! Yes! There are home loans that require no money down! If a home loan is in your future- Kara Davis of Crew Lending will help you with all of your residential lending needs. She is a leading provider of mortgages in Lake Charles, Sulphur, Westlake and the entirety of Louisiana. She can also lend in 47 other states. Choose your mortgage lender carefully to ensure your smooth path to home ownership. Kara Davis will help you understand the loan process and work with you from Application to Clear to Close.
And, here is how…
FHA Loan (Federal Housing Administration)
The FHA loan is a great loan for first time home buyers. A down payment of 3.5% is required. The down payment can be “gifted” to the home buyer from eligible sources and the seller can pay up to 6% of the purchase price towards the borrower’s closing cost and pre-paid items. Therefore, the borrower may come to the closing table with little or no money down (if down payment is gifted). Also beneficial to the first time home buyer- FHA underwriting guidelines are more forgiving about credit hiccups and high debt-to-income than other secondary market home loans.
The FHA loan requires upfront mortgage insurance premium (UFMIP) equal to 1.75% of the base loan amount. This FHA fee is normally financed into the home buyers loan amount by the lender and paid to FHA on the borrower’s behalf. There is also a monthly mortgage insurance premium (based on amortization terms and loan to value).
VA Loan (Veterans Administration)
To be eligible for a VA Loan you must have served in the United States Armed Forces or have been a member of the National Guard or Reserves. Often spouses of deceased veterans may be eligible too.
The VA loan is a true no money down loan. No down payment is required of the Veteran. In addition, there is no monthly mortgage insurance. There is, however, a VA funding fee. The funding fee is a one-time charge which can be paid up front or rolled into the mortgage. The amount of the funding fee is based on your service, amount of down payment and if you have ever had a VA loan before.
The seller can pay up to 4% of the purchase price towards the borrowers closing costs and pre-paid items on a VA loan.
VA underwriting is similar to FHA underwriting with regards to credit and debt-to-income. VA underwriting tends to be more lenient than other secondary market home loans.
USDA Loan (United States Department of Agriculture)
Sometimes referred to as the Rural Development (RD loan) there are geographic requirements for this no money down home loan. As the name implies, the Rural Development loan was created to serve small town American families with low to middle income (typically towns with a population of 25,000 or less). There is a one time upfront annual guarantee fee (USDA funding fee) calculated at 1% of the loan amount and usually financed into the home loan. In addition, monthly mortgage insurance is required and equal to .35% of the loan amount.
The seller can pay up to 6% of the the purchase price towards borrowers closing costs and pre-paid items on a USDA/RD loan.
Borrowers applying for an RD home loan will need to have lower debt-to-income than the aforementioned FHA or VA loan. This type of home loan is not as forgiving when it comes to credit and debt-to-income but is also a great home loan for first time home buyers!
Now is the Time to Buy a Home
It’s a great time to become a home owner. And with no money down home loans and seller contributions towards closing costs and pre-paid items, you may come to the closing table with little or none of your hard earned monies. Kara Davis of Crew Lending has been originating FHA, VA, USDA/RD (in addition to Fannie Mae and Freddie Mac) home loans for happy home buyers across Louisiana and in 47 other states for two decades. She is a leading provider of home mortgages from Coast to Coast and Application to Clear to Close. Reach out to Kara Davis for your little to no money down home loan at 337-842-0115.