What Are the Home Loan Options for Those Who Can’t Afford 20% Down Payment?

Homeownership is no doubt the number one dream of most Americans, and a sure sign that you have made it on your own. But when you’ve decided you’re all set to buy a house, saving for your down payment can be demanding. And if, like most, you have heard the rule of thumb is 20 percent for that down payment, the idea of saving that much might be a daunting task – particularly with the rising rent payment. Fortunately, there are several options that can let you put down less than 20 percent in terms of down payment and still own a home.

Before you explore those options, we must tell you that if you’re in a financial condition that lets you make a down payment of twenty percent, you certainly should go for it as it can help you avoid PMI, reduce your monthly payment, and perhaps provide you immediate equity.

But for those who can’t afford a 20 percent down payment, here are the low rate mortgage loans in Sacramento CA available to accomplish their dream of homeownership without putting 20 percent down payment.

Conventional loan:

Both first-time buyers & experienced homeowners can take advantage of a conventional loan. They are a very good option if you have a good credit score. Though this sort of loan doesn’t need 20 percent down payment, it does need a down payment, the least amount of which can differ depending upon the lender & the borrower’s credit record. Numerous conventional mortgage borrowers prefer to provide more than minimum as down payment, in order to lessen their interest rate.

FHA (Federal Housing Administration):

The federal government has numerous programs in place to make homeownership more realistic. FHA loans are the ideal alternative for many 1st time buyers, particularly for those who are in a credit building phase. However, like a conventional loan, you can make use of FHA loans for cash-out refinances.

VA loans:

The aim of federal government is to make homeownership simpler for all citizens, and this holds especially true for veterans. VA loans usually need no down payment, give flexible qualifying rules, and have low closing costs.

USDA:

The U.S. Department of Agriculture has their own loan program for potential homebuyers. This loan program is particularly useful for buyers in rural regions concerned with their income or credit score. And it has no down payment options.
In addition to putting down less than 20%, we can also discuss options to use gift funds for the down payment.

If you are interested in Low Rate Mortgage Loans in Sacramento CA with less than 20 percent down payment, feel free to get in touch with All California Lending!