How to take out a 0% mortgage?


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Saving for a down payment is one of the biggest obstacles between first-time buyers and owning a home.

Fortunately, there are now ways to get a 0% deposit.


Thanks to options from FHA and more than 2,000 state and local deposit programs accessible through Down Payment Resource, new buyers paid just 4 percent last year, compared to 14 percent of repeat buyers.[1]

FHA loans, as well as many local down payment programs, are available to buyers regardless of income. However, it is also possible to get a mortgage without putting anything down if you have the right degrees.

Here are three programs that can still get you a 0% mortgage.

VA loans

The Veterans Administration guarantees purchase mortgages with no down payment required for qualified veterans, active-duty members, and certain members of the National Guard and Reserves. Private lenders initiate VA loans, which the VA guarantees. There is no mortgage insurance. The borrower pays a financing fee, which can be rolled into the loan amount.

For new buyers who do not make a down payment, the financing fee is 2.15% for members or veterans of the regulatory army and 2.4% for those who qualify through service with the Reserves or National Guard.

Navy Federal Credit Union

Navy Federal Credit Union, the nation’s largest credit union by assets and membership, offers 100% percent financing to qualified members purchasing primary homes. Navy Federal eligibility is limited to members of the military, some civilian employees of the military and United States Department of Defense, and family members.

The credit union’s zero-down program is similar to that of the VA. One difference is the cost: The Navy Federal’s borrowing cost of 1.75% is lower than the VA’s borrowing cost.

United States Department of Agriculture

You don’t have to be a farmer to qualify for the USDA’s Rural Development Mortgage Guarantee Program. You just need to live in a rural or semi-rural area and qualify in your community as a low to middle income homebuyer.

USDA home loans have a maximum purchase price and can also cover home repairs and improvements. Another important advantage is that USDA mortgage rates are often lower than the rates for comparable low- or no-deposit mortgages. Financing a home through the USDA can be the cheapest homeownership option.

Local and State Programs

Of course, there are also plenty of low deposit options. In addition to FHA, homebuyers, especially first home buyers, may qualify for low-deposit loan programs sponsored by state or local housing authorities. Contact Deposit Source to find programs where you live.

[1] NAR profile of home buyers and sellers, 2016

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