Home ownership certainly has an appeal over renting, but it also comes with additional responsibilities. No longer do you have a landlord to call if you have problems with the plumbing, the yard is yours to upkeep, and when you are having trouble with the air conditioning in the hottest part of summer, or when the heater starts acting up right after a blizzard, you don’t have a landlord to call.
Unless you just won the lottery or your dead Uncle Fred has left you a little wealth, you would need to get a loan to obtain your dream home. There are 100% financing loans available for the people with no down payment. Government loans for those who meet the criteria. Conventional loans where you, as the purchaser are responsible to come up with a extensive down payment.
The conventional loan requires excellent credit and at least a 3% down payment. That is at least $3,000 down, WITH nice credit, on a $100,000 house. Additionally, not many of us out there possess a totally clean credit report, But you do have choices.
A couple of the more accepted alternative home loan programs are 100% financing and government loans. One-hundred-percent financing loans are obtainable through the VA, FHA and conventional ways.
The Veteran’s Administration and the Federal Housing Authority both provide 100% financing loans – that means you don not have to make a down payment. But you would pay a price. Both the VA and the FHA believe 100% financing loans high risk and offset that risk with a superior interest rate.
These loans, however, do not represent the total of available options. There are, in fact, many more possibilities, your choice of which will depend completely on how good or terrible your credit is.
If you have good credit but no verifiable income there is a type of loan known as a no income verification loan. Similarly, if your credit is less than perfect, you might consider researching imperfect credit loans, which might allow you to qualify for lower, more competitive interest rates. If you are interested in the amount of money you can reasonably afford to spend on a house, pre-approval programs allow you to do this, even before you have picked out a property. There are also programs specifically targeted to first time homebuyers, as these programs are tailored to prospective buyers with good credit but without a long credit history. Additionally there are loans for new construction which get a fixed interest rate when the home is being constructed, and keeping this loan after purchase. Note: This is only advantageous if interest rates go up after you lock in a rate.
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