Mortgage Alternatives You Didn’t Know About
You’re ready to buy a home, but you don’t have the 20% down payment saved up. Don’t worry – there are plenty of mortgage alternatives that will help you finance your dream home. This Mortgage Broker Christchurch can tell you how:
FHA Loans: A popular option for first-time homebuyers, Federal Housing Administration (FHA) loans are insured by the federal government and offer low down payments (as little as 3.5%) and reasonable interest rates.
VA Loans: If you’re a veteran or active duty service member, you may be eligible for a VA loan from the Department of Veterans Affairs. These loans require no down payment and often have more favorable terms than conventional mortgages.
HomeReady Mortgages: HomeReady mortgages from Fannie Mae are designed to help low-income buyers become homeowners with as little as 3% down payment and reduced mortgage insurance costs.
USDA Loans: For rural and suburban homebuyers, the USDA offers loans with no down payment as long as you meet certain eligibility requirements. These loans are often very affordable since they have lower interest rates than other mortgages.
Home Possible Mortgages: Home Possible mortgages from Freddie Mac are designed to help low-income buyers become homeowners with as little as 3% down payment and reduced mortgage insurance costs.
Gift Funds: If you’re lucky enough to have family or friends who can help you with your down payment, you may be able to use gift funds toward your purchase. Be sure to check with your lender for their specific requirements on gifting funds.
Piggyback Loans: For buyers who want to avoid PMI, a piggyback loan can be a great option. This type of loan is when two loans are taken out – one for 80% of the purchase price and one for 10% or 20%. The latter loan is typically an adjustable-rate mortgage with a much lower interest rate than the first loan.
Bond Programs: Many states offer bond programs that provide low-interest mortgages with no down payments to qualified home buyers. These programs usually have income limits and other eligibility requirements, so be sure to check your state’s program specifics before applying.
Fannie Mae HomePath Properties: Fannie Mae HomePath properties are special types of homes that have been acquired from foreclosures. The good news is that Fannie Mae offers special financing for these homes, which includes low down payments and flexible terms.
80-10-10 Loans: This type of loan involves taking out two loans – one for 80% of the purchase price, another for 10%, and a final 10% to be paid as a down payment. This allows borrowers to avoid PMI while still making a smaller down payment than what’s typically required.
By considering mortgage alternatives like those discussed above, you can finance your dream home with little or no money out-of-pocket. Be sure to research all your options and speak with an experienced lender before committing to any type of mortgage.