Most potential home buyers often wonder how much they will need to have a loan. Fortunately, a homebuyer can buy a home without a down payment or with no money down. This is possible only for a few specific people and in some circumstances. If you live in a rural area, are a veteran, or qualify for a loan with a no down payment requirement, you can purchase a house without no down payment.
The only way you can buy a house without a down payment is by using either of the two government-backed loans. These two loans allow you to purchase a home without paying a down payment.
‘No Money Down’ Payment Mortgage Options
VA Loans
VA loans are government-backed mortgages for veterans or service members. If you or your spouse are veterans or service members, you might be eligible for a VA mortgage that the Veteran Affairs department guarantees. These loans do not require any private mortgage insurance or down payment, but instead, you will be required to pay a funding fee. The funding fee will cover the foreclosure costs if you default on the mortgage.
USDA Mortgage
USDA mortgages are no downpayment or no money down mortgages backed by the United States department of agriculture for low and medium-income home buyers from the USDA eligible rural areas. These loans do not require any mortgage insurance but just pay a guarantee fee to protect the lender in case of a foreclosure. The loan does not need any minimum credit score, but in most cases, the lender requires at least six hundred and forty.