Looking to Buy Your First Home With Little to No Money For a Down Payment?? Read On...

The image above shows some of the activites you should pursue as you prepare to purchase your first home (a first time homebuyer is generally considered to be somebody that hasn't owned a home for three years). However, one of the largest stumbling blocks in buying a new home for many first time home buyers is coming up with the down payment. I have some great news however! There are ways to purchase if you have limited savings.

Purchasing a home with little or no money down typically involves utilizing specific loan programs or assistance options designed for this purpose. Here are some strategies you could consider:

1. VA Loan (for veterans): If you're a veteran, you may qualify for a VA loan, which often allows for 100% financing (no down payment required). Spouses of deceased veterans may also be eligible.

2. USDA Loan (for rural areas): The USDA offers loans for homes in rural areas, and these loans can sometimes allow for 100% financing as well. You would be surprised at some of the areas that the USDA will provide financing in.

3. FHA Loan (with down payment assistance): While FHA loans typically require a minimum down payment (usually around 3.5%), there are programs that can provide down payment assistance, potentially covering this amount or more.

4. State and local programs: Some states and municipalities offer down payment assistance programs, grants, or loans to help first-time homebuyers or those with specific qualifications. Mass Housing is one such example.

5. Negotiating with the seller: In some cases, you might negotiate with the seller to cover your closing costs or even provide a credit that effectively covers your down payment. In a sellers' market this option is tougher to get. But if a home has been on the market for a while it may be an option.

6. Personal loans or gifts: You could also consider borrowing the down payment from family or taking out a personal loan for the down payment, though this approach can increase your debt load and affect your mortgage eligibility. Check with you lender first on what their policies are for "gifts".

7. Borrowing from a 401K or comparable plan. If you have a 401K it is frequently acceptable to borrow from that for the purposes of purchasing a home. The repayment requirements for this is generally quite flexible and, in fact, may not figure into your debt to income calculation.

8. Good credit and stable income: Having a strong credit history and stable income can improve your chances of qualifying for these programs and loans.

Before pursuing any of these options, it's crucial to research thoroughly and consult with your realtor or mortgage lender who can guide you through the specific requirements and options available to you based on your financial situation. Each program has its own eligibility criteria, so finding the right fit will depend on your circumstances and the property you intend to purchase.

Should you have any questions regarding the process I would love to help you out! Feel free to reach out to me anytime.

Mike