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How to buy a House with no money down

Buying a Home Without a Down Payment

Many potential home buyers are concerned about how much money they need to save for a down payment. However, there are actually a few ways to buy a home without a down payment.

Zero-down mortgages

There are two types of government-backed loans that allow you to buy a home with no down payment:

  • VA loans are available to veterans and active-duty service members.
  • USDA loans are available to borrowers in rural areas.

To qualify for a zero-down mortgage, you will need to meet certain requirements, such as having a good credit score and a steady income. You will also need to pay mortgage insurance, which is an additional cost that helps protect the lender if you default on your loan.

Low-down payment mortgages

If you don’t qualify for a zero-down mortgage, there are still a few options available to you. Some lenders offer conventional loans with a down payment of as little as 3%. You may also be able to get a government-backed FHA loan with a down payment of 3.5%.

Understanding A Zero-Down Payment Mortgage

Zero-Down Mortgages

A zero-down mortgage is a home loan that does not require a down payment. A down payment is the first payment you make towards the purchase of a home, and it is typically calculated as a percentage of the home’s purchase price. For example, if you buy a home for $200,000 and you have a 20% down payment, you would need to bring $40,000 to the table at closing.

Lenders require a down payment because they believe that borrowers who make an upfront investment in their home are less likely to default on their loan. However, there are a few ways to buy a home without a down payment, including through government-backed loans.

Government-Backed Loans

The government offers guaranteed loans to people who need financial assistance when buying a home. These loans are insured by the federal government, which means that the government (along with your lender) will help pay your mortgage if you default. This makes government-backed loans less risky for lenders, and they are therefore more likely to offer them to borrowers with no down payment.

There are two types of government-backed loans that allow you to buy a home without a down payment:

  • VA loans are available to veterans and active-duty service members.
  • USDA loans are available to borrowers in rural areas.

To qualify for a zero-down mortgage, you will need to meet certain requirements, such as having a good credit score and a steady income. You will also need to pay mortgage insurance, which is an additional cost that helps protect the lender if you default on your loan.

Other Options

If you don’t qualify for a zero-down mortgage, there are still a few other options available to you. Some lenders offer conventional loans with a down payment of as little as 3%. You may also be able to get an FHA loan with a down payment of 3.5%.

There are also a number of down payment assistance programs available to help first-time home buyers. These programs can provide you with a grant or loan to help you cover your down payment and closing costs.

Choosing the Right Mortgage

The best way to choose the right mortgage for you will depend on your individual circumstances. It is important to talk to a lender to see what options are available to you and to get pre-approved for a loan before you start looking for a home.

Here are some things to keep in mind when choosing a mortgage:

  • The amount of your down payment will affect your monthly mortgage payments and the amount of mortgage insurance you will have to pay.
  • The interest rate on your mortgage will also affect your monthly payments.
  • You will need to have a good credit score to qualify for the best interest rates.
  • You should also consider the closing costs associated with your mortgage, which can add up to several thousand dollars.

Buying a home without a down payment can be a great option for some people. However, it is important to weigh the pros and cons carefully before making a decision.

Here are some of the pros and cons of zero-down mortgages:

Pros:

  • You can avoid having to save up a large down payment.
  • You may be able to qualify for a mortgage even if you have a low credit score.
  • You may be able to get a lower interest rate on your mortgage than if you had a lower down payment.

Cons:

  • You will have to pay mortgage insurance, which can add to your monthly payments.
  • You may have to meet stricter credit score requirements.
  • You may have to pay closing costs upfront.

Ultimately, the decision of whether or not to get a zero-down mortgage is a personal one. You should weigh the pros and cons carefully and talk to a lender like us to see what options are available to you.

To get started online you can visit: https://tkteam.floify.com/apply-now

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Freddie Mac Home Possible Mortgage: Your Path to Homeownership, Even with a Low Income

Freddie Mac Home Possible Mortgage: Your Path to Homeownership, Even with a Low Income

The Freddie Mac Home Possible mortgage is a government-backed loan program that offers low down payment options and flexible lending requirements to first-time homebuyers and borrowers with lower incomes.

Key features of the Freddie Mac Home Possible mortgage:

  • Low down payment: Borrowers can qualify for a Home Possible mortgage with as little as 3% down.
  • Flexible lending requirements: Home Possible mortgages have looser lending requirements than some other loan types. This can make it easier for borrowers with low incomes or credit scores to qualify.
  • Affordable monthly payments: Home Possible mortgages have competitive interest rates and mortgage insurance premiums. This can help borrowers keep their monthly payments affordable.

Who is eligible for a Freddie Mac Home Possible mortgage?

To qualify for a Home Possible mortgage, borrowers must meet the following eligibility requirements:

  • Have a credit score of at least 660
  • Make a down payment of at least 3%
  • Have a debt-to-income ratio of 43% or less
  • Have stable income and steady employment
  • Live in the home as their primary residence
  • Have a household income that does not exceed 80% of the area median income (AMI) check Home Possible income and property eligibility tool to see your area’s median income.

Other requirements for Home Possible loans:

  • A debt-to-income (DTI) ratio of 43% or less if the loan is approved through Freddie Mac’s automated underwriting system. Or, a DTI of 45% or less if the loan is manually underwritten
  • A loan-to-value (LTV) ratio of 97% or less (meaning you put at least 3% down). If you have multiple home loans or a second mortgage — used to cover the down payment, perhaps — the LTV max is 105%
  • Non-occupant co-clients are allowed in this program, which means you can qualify with the income of a parent or other individual who agrees to co-sign the loan with you

Is the Freddie Mac Home Possible mortgage right for me?

The Freddie Mac Home Possible mortgage can be a great option for first-time homebuyers and borrowers with lower incomes. However, it is important to compare this program to other mortgage options before making a decision. You should also work with a qualified mortgage lender (like myself) to get pre-approved for a loan and determine how much you can afford to borrow.

How to apply for a Freddie Mac Home Possible mortgage

To apply for a Home Possible mortgage, you can contact our team or get started on a application here and let us help you get the loan you need to buy your dream home.

APPLY NOW

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HomeReady Mortgage: Affordability and Flexibility for First-Time Homebuyers

The HomeReady mortgage is a program from Fannie Mae that allows borrowers to put down as little as 3% on a home purchase. This is even lower than the 3.5% down payment requirement for an FHA loan. In it’s design, it helps low-income buyers by placing a limit on how much you can make to qualify, and HomeReady loans allow borrowers to use gifts, grants, or a down payment loan to help cover their upfront costs. co-borrowers are also acceptable, whether they live in the home or not, which makes HomeReady one of the easiest mortgage programs to qualify for.

Some basic requirements to consider:

  1. You cannot earn more than 80% of your Census tract’s median income
  2. You need a FICO score of at least 620 in most cases
  3. The home must be your primary residence
  4. You should have a debt to income ratio (DTI) that’s no higher than 50%. This is more lenient than most other mortgage programs
  5. You must agree to complete a 4-6 hour online homeownership education course

Let’s dig a little deeper below.👇

HomeReady Income limits 2023 💰

Fannie Mae sets the HomeReady income limits nationwide. To qualify, you can’t make more than 80% of your area’s median income (AMI). That means if your area has a median yearly income of $100,000, you must make $80,000 or less to qualify for the HomeReady program. A great tool for anyone to look up income limits for 2023 is Fannie Mae’s AMI Lookup Tool. Simply input your address, and the tool will give you details to your county’s area median income.

Let’s talk Credit 💳

HomeReady depends on the borrower’s credit, and you’d typically need a score of at least 620 to qualify and if your interested in a multi-unit property a 680+ might be needed. Another option to consider if your credit is low is an FHA loan where with a FICO as low as 580, you could potentially borrow with a 3.5% down. Or if you are closer to the 500-579 range you might still qualify, but they’d need a least 10% down payment.

Eligible property types 🏡

You can purchase a traditional single-family home if you want. But, if you want something a little different, Fannie Mae also allows the purchase of:

  • Condominium units
  • Homes in a planned unit development (PUD)
  • Co-ops
  • Manufactured homes
  • Multi-family homes with 2, 3, or 4 units – will require a higher credit score, possibly as high as 680+

Keep in mind different property types have different requirements for documentation and property condition. The specific requirements will vary depending on the lender and the property type so make sure to connect with your lender so they can help you determine the specific requirements for the property type you are interested in. No matter what type of home you buy with HomeReady, it must be your primary residence. This means that if the building has 2-4 units, you must live in one of the units yourself full-time. You cannot use this loan program to purchase investment properties or vacation homes.

Debt to Income Ratio 🔎

What lenders are comparing is your total income to your total monthly debts. for HomeReady is a little more forgiving with it allowing no higher that 50%. To calculate your debt to income ratio

  1. Add up your monthly bills which may include: Monthly rent or house payment, credit cards, car payments, student loans – do not include your bills, like phone, electric, gas ect..
  2. Divide the total by your gross monthly income, which is your income before taxes.
  3. The result is your DTI or debt to income ratio, which will be in the form of a percentage. The lower the DTI, the less risky you are to lenders

Online Home Education Course 📖

HomeReady mortgage borrowers are required to take a homeownership education course.

The course must be taken with a HUD-approved housing counseling agency. The homeownership education course teaches borrowers about the responsibilities of homeownership, such as budgeting, home maintenance, and credit. It also helps borrowers understand the mortgage process and how to avoid foreclosure.

If you would like to learn more about the HomeReady mortgage, you can visit the Fannie Mae website or speak with a mortgage professional like myself to explore your options.

To get started click on Apply Now.

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Why it’s Important to Use a Realtor

First time home buyers always start with the same question – Do I need a realtor or not? Well, some people prefer to do all the research, house hunting and make all the decisions themselves. While this isn’t a bad thing by any means when choosing to use a realtor you are still the person in charge when it comes to choosing all the aspects of the purchasing process. Just a few of the major benefits of using a realtor is having an industry expert on your side to help you navigate the sometimes difficult market and their wealth of resources you can tap to find a home that is right for you!

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Buy vs. Rent

Whether to buy a home or not is on a lot of people’s minds, especially millennials. In today’s market people are spending the same amount a month renting an apartment as they could on a mortgage payment on a home. Moving into a home is a big responsibility and not everyone wants the burden of a mortgage payment.
If your family lives in another state, your job moves around, or you’re planning to travel frequently, buying a home is probably not the best option at the moment. If you have a stable job and your family is in close proximity then purchasing a home can save tons of money.
Why pay for something you will never own? Whether you stay in the home long term or not, purchasing a home will save money. If you decide to leave the residence and move elsewhere you now own that property so you can rent it out and make income on it. Not only is there a possibility of a second income but there is the potential to get tax benefits. Homes also have a guarantee of return on your purchase after owning for 15-20 years. Think about spending $102,000 on a condo, you will now own it till the day you no longer want it. Now think about spending $102,000 on a rental property over a couple months. Yes, that rental will seem nice in the moment but at the end of those few months you will have payed $102,000 and now need to put more deposits down and rent another home. Neither renting nor buying is better but you will have different take always from each purchase. When renting you don’t pay for maintenance but you also don’t get to choose who does the maintenance, when they do it, and what appliances are in your rental. When you own a home you have full rein of what is in your home and who comes in your to fix it when something goes wrong. Buying and renting are both good options but in the long run purchasing a home will save money and provide you with more freedom to do as you please with the property.

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Financial Peace University Draft

The TK team is excited to announce we will be hosting Financial Peace University again!

This 9-week course will change the way you think about money, teach you how to dig yourself out of debt and help you to reach financial stability and comfort. I will go over the seven baby steps of Financial Peace along with how to create and stick to a budget and even how being generous can lead to more success. This course will provide you with the tools and tips you need to change your financial status. By changing the way you manage your money you can change your whole life.

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Meet the Newest Member of the TK Team

My name is Natalie O’Connell and I’m the newest member to the TK team. I started my internship in September assisting with marketing and making calls to our realtors about upcoming events. I’m now starting the process of getting my LO license. I’m very excited to be working with Tara Krieg and her team! The office is always a cheerful place to be and there are always so many events going on around the workplace.

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The TK Team’s 3rd Annual Casino Night

The TK team is hosting the third annual Casino Night!

Every year we take a night to thank our business partners, clients, and staff with a fun Casino Night event.

The poker tables are ready, the cards are shuffled, we’ve dusted off the poker chips and we’re ready to party. Not only can our guests look forward to blackjack, but we’ll also have some amazing prizes, giveaways, treats and cocktails. The team is hard at work planning the awesome night and we can’t wait to see everyone.

Although we could never thank our clients enough for the business they send our way, we sure try our best with this event!

The last few years have been a blast and we are counting down the days for this one.