Can You Buy A House With No Money Down?

Buying a home can be a major financial commitment, and the down payment is often one of the biggest barriers to homeownership. However, the good news is that you don't necessarily need a large sum of money upfront to purchase a house. In fact, there are several mortgage options available that require little to no down payment.

Contrary to popular belief, you don't always need to put down 20% of the home's purchase price. While a 20% down payment helps you avoid paying mortgage insurance, there are other options that can help you get into a home with little or no money down.

Here are some low down payment options to consider:

1. Conventional Loans: You may be eligible for a conventional loan with as little as 3% down. However, you will be required to pay for private mortgage insurance (PMI) until you reach 20% equity in your home.

2. FHA Loans: Backed by the Federal Housing Administration (FHA), these loans only require a minimum down payment of 3.5%. If your credit score is below 580, you may be required to put down at least 10%. Keep in mind that some lenders require a minimum credit score of 580.

3. VA Loans: If you're a veteran, active-duty service member, or eligible surviving spouse, you may qualify for a VA loan with no down payment. These loans are backed by the Department of Veteran Affairs and do not require mortgage insurance. However, you will need a credit score of at least 580 and meet specific service requirements.

4. USDA Loans: A USDA loan is a zero-down mortgage backed by the United States Department of Agriculture. These loans are designed to encourage homeownership in designated rural areas. However, Rocket Mortgage® does not currently offer USDA loans.

In addition to these low down payment options, there are also down payment assistance programs available to help you buy a house. Some popular options include silent second mortgages, grants for first-time homebuyers, and assistance programs for low- and moderate-income earners. State and local governments also offer various programs, so it's worth checking HUD's database for programs available in your area.

It's important to note that the down payment is not the only cost to consider when purchasing a home. You may also need to pay for mortgage insurance premiums (MIPs) if you opt for an FHA loan, as well as closing costs and moving expenses.

In conclusion, while a down payment is typically required when buying a house, there are options available that allow you to purchase a home with little to no money down. By exploring different mortgage options and assistance programs, you can make homeownership more accessible and affordable.