It comes as a shock to many first-time homebuyers when they learn of the large costs traditionally required for buying a home. Buyers are often unprepared to pay the typical 20% down payment required by a traditional lender, in addition to all of the other fees of closing and moving into a new home, which can run into the 10s of thousands of dollars. If your credit has suffered for any reason and you lack the cash on hand to apply towards your down payment, the dream of home ownership can appear to be out of reach.
Fortunately, there are options that exist that allow for the purchase of a home in these situations! There are many benefits to utilizing these options, the first of which is the ability to attain homeownership immediately. Along with this is the ability to keep what money you do have on hand in savings and to join in the benefits of owning real estate, such as building equity in your home.
There are many options available with a bit of investigation, so read on as we explore some of the ways you can buy a Venice house without a down payment.
FHA Loans
The FHA (Federal Housing Administration) is a government agency dedicated to making it easier to purchase a home. The FHA does not loan money directly, but they do offer programs through approved lenders which allow buyers like you buy a Venice house without a large down payment. A traditional loan calls for a 20% down payment, but with an FHA loan you can put down as little as 3.5%! In addition, when using an FHA loan your down payment is allowed to be gifted to you, meaning you can buy a home with none of your own money whatsoever. One requirement that will increase your monthly payments is the PMI, private mortgage insurance, required on homes purchased with less than 20 percent down. However, this can be paid off over time and then removed.
Gifted funds
There are specific guidelines in order to use a gift to buy a Venice house without a down payment, depending on the type of loan. Among these guidelines are that the contribution must be from a blood relative, a spouse or a domestic partner, or a fiancee with no financial interests in the closing. In addition to other documentation, the lender may require a letter including your signature along with the person who donated the money to you and stating that they will not require repayment of the gift. There may also be other documentation required. For down payments over $15,000, tax laws need the giver to report this gift on their taxes. However, this can still be a great opportunity for acquiring money for a downpayment for a Venice house.
USDA Rural Housing Loans
This program provides a 90 percent loan guarantee to lenders to decrease their risk of loaning 100 percent of the home’s value. The name may sound like this loan is only for rural housing, but these are available for qualified homes in both rural and suburban areas as well, based on the income level of your area of the country. In order to qualify for this loan, you must have an income below the median income level and meet specific credit score requirements, among others, to take advantage of these loans to buy a Venice house without a down payment.
VA Loans
If you’re a veteran, you have an amazing opportunity to buy a Venice house without a down payment utilizing the government-backed VA loan program, which provides insurance to lenders in order to allow them to supply these loan packages. These loans offer lower rates, friendly qualifying guideline and have the added benefit of no mortgage insurance being required. When you’ve sold the home, you can apply for another VA loan; the benefit never expires. Additionally, suppose you’ve owned your home for years and paid off the VA loan. In that case, those who are eligible or their eligible surviving spouses can receive a one-time restoration of the benefit, allowing you to buy another home.
Down Payment Assistance Programs
Down payment assistance programs (DPA) grants assist homebuyers seeking to buy a Venice house without a down payment. Many of these programs have income guidelines, require a good credit score, and that you haven’t owned a home in the past three years, qualifying you as a first-time homebuyer. The interest on these grants can vary from zero to high rates, and the assistance can come in several forms, grants, loans, deferred loans, or forgivable loans.
Existing Equity
If you already own a home, you likely have some equity in that home and you likely can buy another Venice house without saving up another down payment. If you don’t have the savings already, this could be the solution you are looking for to buy your vacation property or a second home. There are multiple ways to pull out this equity from your home, such as refinancing or a heloc loan. This money can then be put to whatever use you want, such as to purchase an investment property to build an income stream and wealth for your retirement without depleting your ready cash.
There are many creative ways to buy a Venice house without a down payment, and the pros at Maio Strand Property Group have years of experience in helping buyers like you find the solutions to overcome any stumbling blocks standing in your way. Whether buying your first home or building your real estate empire, you need to complete a transaction without tying up your money; the professionals at Maio Strand Property Group can help you explore your options with no obligation. Don’t forget to ask about our current inventory of the best properties available in Venice today. Contact Maio Strand Property Group at (631) 335-4055.