Tuesday, August 11, 2015

4 Low or No Down Payment Mortgage Options

Are there still low down payment mortgages available to prospective home owners in 2015?

The housing market seems to be steadying itself. With a solid increase in sale prices and home values appreciating, the components are in place to support a positive outlook on the future for the housing market.

Unfortunately, one avenue that may hold back or slow down the health of the housing market is the credit market. It has become increasingly difficult to qualify for a home mortgage, much less save for the required down payment, which has increased in recent years due to the market collapse.

The good news is that there are mortgages available to help those home buyers who have difficulty in saving for a large down payment. These low down payment mortgage programs range from federal to local and are outlined below.

No Down Payment Mortgages: USDA

The Department of Agriculture's Rural Development mortgage guarantee program offers a no down payment program that is based on the location of the home, so not all homes will qualify.

Click here to see if the house you are considering will qualify. Typically, the homes that qualify are located in rural areas or the outer areas of city limits. This program has been so popular that it has had periods during the year when it will run out of money to further fund any deals. Also, due to the popularity and an apparent lack of personnel, be prepared for longer processing and underwriting periods than some of the other options provided here.

No Down Payment Mortgages: VA Loan

Available for qualified veterans, Veterans Affairs guarantees no down payment mortgage loans. Private lenders originate these loans, which have no mortgage insurance. There is a funding fee, but that can be rolled into the loan.

No Down Payment Mortgages: Navy Federal

Navy Federal Credit Union offers no down payment mortgages to qualified members for homes that are purchased as a primary residence. Membership is restricted to military personnel or the family members. This program is similar to the VA program, but the funding fee is actually lower.

Low Down Payment Mortgages: FHA

The FHA mortgage program has gained in popularity as other no or low down payment mortgages have disappeared in the wake of the market collapse. FHA guaranteed loans currently account for 15% of the market. The required down payment for an FHA loan is 3.5%. The FHA recently increased their rates and they are based on the purchase price of the house.

Even if you do not have the ability to save for a large down payment for your house purchase, do not give up hope. As you can see there are several viable mortgage options available. And we may see additional options as the housing market gets healthier and lenders relax their lending guidelines further. It's still a great time to buy a home with today's average interest rate at 4.31% and housing prices not fully recovered.

Port City Home Buyers LLC is one of Wilmington and Jacksonville's premier real estate investing groups because we focus on doing things right. We specialize in distressed single family houses (foreclosures, bank REO's, sellers who need to sell fast). We then provide a great mix of remodeled homes for new home owners, turn key rentals for landlords or wholesale them to other investors. For more information about our company and how we can help you, visit http://www.portcityhomebuyersllc.com.
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