You may think that it’s not possible to buy a home with little savings and no down payment. However, there are many loan products available that can make it easier to qualify for a mortgage regardless of your current financial situation. In some cases, it may be possible to get a mortgage even if you have recently filed for bankruptcy.
USDA Rural Housing Service
A USDA loan can be ideal for those who don’t want to make a down payment or who don’t have money for a down payment. This is because these costs can be rolled into the loan itself, which means that there is no need to write a check or deplete your savings. The only catch is that you have to be willing to live outside of the city.
1st Time Home Buyer Grant
If you are buying your first home, grants and loans could be available from local, state, or federal government agencies. Lenders may also provide grants or loans that help make a down payment or pay closing costs. However, you may be required to pay grant money back if you decide to move out of the house less than a year after you purchase it. It is important to note that the definition of the first-time buyer can vary depending on the agency providing the financing. In some cases, you’ll qualify as a first-time buyer if you haven’t owned a home in the past three years or were required to sell property because of unexpected hardship.
FHA Loan and Other Options
To qualify for an FHA loan, you typically need a down payment of 3.5% and a credit score of 580 or higher. You will also need to be at least two to four years removed from a bankruptcy filing to obtain financing. A low down-payment jumbo loan has unique features, and it may be possible to qualify for this type of loan with a credit score as low as 500. Some 401K plans allow you to pull out money if your intent is to use it for a home purchase. Buying a home is a milestone that many people strive to reach at some point in their lives. If you are willing to keep an open mind, you can realize your dream of being a homeowner regardless of your credit score, income, or current cash reserves.
Looking to stay within your budget when buying a new home? We can help.