Scrabble tiles spelling out "No down payment" (Photo: Flickr/Jake Rustenhoven, GotCredit)
Back in the day, well, even 15 years ago, it was common for most people to put a down payment of 20 percent toward their home to avoid Private Mortgage Insurance (PMI). However, over the last several years, it’s become common for people to seek a home loan with the smallest down payment possible.
Whether it’s the latest phone technology, car or mortgage, everyone wants more, for less financial impact. While you might attribute this desire to an unstable economy, stagnant yearly salary, or tiny rainy day fund bucket, it’s a consumption concept that’s always existed and is likely to remain.
So what do you do when all of the news out there says that 100 percent financing is history? There are a couple of options that are available to help you move into a home with a low down payment or zero down payment and most importantly, a comfortable monthly payment that won’t weigh you down.
No Down Payment Mortgage
One of the only loans currently available with no down payment is also an exclusive benefit of military service, the VA loan. Many veterans may not be aware of the benefits of VA loans, but they can be a great option for those who have served our country. Talk to a VA approved lender, like Quicken Loans, about how to take advantage of a VA loan.
Low Down Payment Mortgage
If you haven’t served in the Armed Forces, a great alternative and popular choice for home buyers is a low down payment mortgage. An FHA loan is a mortgage that only requires a 3.5 percent down payment! FHA loans are government-insured and offer more flexible credit and qualification requirements.