Can You Purchase a Home With No Money Down?

no money down

Home buying Q&A: “Can you purchase a home with no money down?”

It wasn’t long ago that you could purchase a home with nothing down, and even get assistance with the closing costs!

Back in 2006, 100% financing was the norm and you were a fool to put anything down; heck, there was even a mortgage lender named “Zero Down Mortgage.”

But these days have come and gone, leaving scores of foreclosures in their wake, making lenders think twice about lending so loosely in the future.

Nowadays, the only place you’ll be able to find 100% financing will be via government programs offered from the USDA or the VA.

Of course, these loan programs aren’t available to everyone, so in reality, you’re probably going to have to put some money down if you want that new home (how much should I put down on my home?).

Fortunately (or unfortunately depending on your viewpoint), prospective homebuyers are still able to put down as little as 3.5% to purchase a property via an FHA loan.

Government-owned Freddie Mac also offers its Home Possible® 97 Mortgage, which requires as little as 3% for down payment (loan to value ratio).

Some credit unions will allow you to purchase a home with as little as 5% down, while the larger banks and mortgage lenders want 10% these days.

Perhaps the best way to see all your options with regard to down payment is by getting in touch with a broker, who can shop your loan scenario with various lenders and explore their numerous programs.

Tip: Make sure you’ve got seasoned asset reserves in the bank to cover several months of mortgage payments and closing costs.