When it comes to mortgages, down payments are important. We help you understand the best mortgages with little money down here at Mortgage.info.

1. The Best Mortgages with Little Money Down
Even if you have good credit score and low debt-to-income ration, you will still have to put some
money down when you buy a house. The question is what to do if you do not have sufficient
savings to make the traditional 20% down payment. Use this guide to the best home loans which
require little or no down payment to find out which ones are suitable for you and how you can
use them.
FHA Loans
The FHA home loan is undoubtedly the most popular of all low down payment mortgage
programs. There are several reasons for this. Firstly, it is accessible to most first-time home
buyers including those with over the average income. More importantly, it requires a down
payment of only 3.5% of the property value. Few conventional mortgage lenders, if any, are able
to offer this kind of deal. The credit score requirement is 580 while the debt-to-income ratio
which can get you qualified can be well over 50%.
Is there a down side? You will have to pay for the insurance on the loan. A portion of the cost is
paid as a closing cost and there are monthly payments thereafter. The insurance cost can push the
total loan cost considerably. That is why you should compare this type of loan to its conventional
counterparts very carefully using a mortgage affordability calculator.
USDA Loans
The United States Department of Agriculture (USDA) offers no down payment mortgage loans to
individuals with low to median income who live in rural areas. There are income requirements,
but you can qualify even if your income is above average. The even better news is that you can
get such a loan even if you do not live in a traditional rural area. It is possible to qualify for
buying a house in a suburban area especially if it is in a small college town or if it is in a major
city but it is not densely populated.
The main benefit of this loan is that it offers 100% financing. Furthermore, you can typically
secure lower interest than with conventional loans. You can wrap repair and improvement
expenses into the loan. The only drawback of this type of loan is that there is a maximum house
purchase limit which you must adhere to. There are monthly insurance payment but they are
typically quite affordable.
VA Loans
These on down payment mortgage loans are backed by the U.S. Department of Veteran Affairs.
They are available to active duty personnel, honorably discharged personnel, individuals who
have at least 6 years in the National Guard or the Reserves and the spouses of officers killed in
the line of duty. There are no strict credit requirements. Eligible individuals can qualify even if
they have bad credit or bankruptcy.

2. The main benefits of these loans, in addition to the no down payment, are the large loan amounts
granted and the lack of insurance payments. There are virtually no drawbacks except for the fact
that most members of the general public cannot qualify.
Local Programs
You should definitely consider state, county and city programs offered by local housing agencies.
Often, they offer much lower down payment compared to the conventional loans. It pays off to
research the programs available in your local area. You just need to calculate mortgage payment
to ensure that it is affordable and cost-efficient.
Conventional Loans
It is possible to get down payment of 10% or even 5% with a home loan from a conventional
mortgage company. You should check what the large banks and the smaller mortgage companies
in your area have to offer. If you have a high credit score and low debt-to-income ratio you can
readily qualify for such a loan. You will have even higher chances if you plan to buy a property
with lower sales price.
Now you know how to buy a house with no money down or low down payment. Just keep in
mind that this is not the best option if you have some funds to put down. The larger the down
payment is the lower the interest is. Besides, you will have more equity in your house from the
start and this will make refinancing easier. You can easily confirm this by using a mortgage
refinance calculator.