If you’re dreaming of buying a house but you lack the money for it, then our list of 5 ways to buy a house with bad credit and no money down will be helpful.
Home is where all the memories are made. It is our sanctuary and the place we come to every single day leaving hard work and all the work-related stress behind. Our home is the thing we look forward to at the end of the day because our loved ones are there. And of course, the TV. All jokes aside, it is true when they say that there is no such place like home. Everyone who rents an apartment or a house can agree on this since living in someone else’s home is so difficult. Your freedom is limited and you need to make sure you leave everything the way you found it.
Having your own home is a dream come true compared to renting one. First of all, you know that it’s all yours and no one can evict you for this or that reason. You can have your peace knowing that you actually own a property and you can make whatever changes you want around the house.
But sadly, buying a house is not always an option for everyone since it is not easy nor cheap. It takes years of hard work and saving money to be able to afford a house. And not to mention that in order to be able to save for a house you need a steady job with a solid salary. There are many requirements for buying a house and most of them involve money. It sounds devastating to admit that everything does revolve around money and it is one of the greatest obstacles in life. But the situation is not the same everywhere. In some countries, it is less difficult to buy a house. To know more, take a look at our list of Easiest Countries to Buy a House in the World.
The rest of us have to struggle with bad credits and down payments that prevent us from having a home. However, not everything is hopeless. There are a few options for those who wish to own a home but don’t have enough money to afford big down payments. There are options for those with bad credit, too! How? We visited The Mortgage Reports and Bankrate and researched the suggestions we found there. We made a list of ways to buy a house with bad credit and no money down.
5. VA Loans
VA loans are made possible thanks to the Department of Veterans Affairs, and they allow veterans and their spouses to buy a house with no money down. The closing costs are limited and the average interest rate is lower than usual which makes it perfect for those who can’t afford huge down payments. Additionally, these loans don’t require mortgage insurance and this reduces monthly costs. The funding fee is between 2.15% to 3.3% depending on several factors such as what military branch did you serve in. You can find more information about VA loans on their website.
4. First-Time Buyer Programs
There are many programs for first-time buyers offered by the government or bank that can help you buy a house even if you have no money for down payment. The requirements for these programs vary from state to state, so you must check with your lender to see if you qualify for it. Their criteria may include income limits or credit requirements, and some of the programs apply to homes in lower-income neighborhoods. One of such programs is HomePathReadyBuyer which offers new house owners 3% of the price towards closing cost assistance. Another is Home Ready Program and it involves houses in lower-income neighborhoods. Now, let’s see the top three on our list of ways to buy a house with bad credit and no money down.
3. The Federal Housing Administration
The Federal Housing Administration or FHA program, the number three on our list of ways to buy a house with bad credit and no money down is the largest insurer of mortgages in the world ever since they were established back in 1934. They provide mortgage insurance and they are a great solution for those with a bad credit. You must meet certain requirements in order to get a loan though. You can find more information on the U.S. Department of Housing and Urban Development website.
2. USDA Loans
The Department of Agriculture Rural Development offers loans for buying houses outside of urban areas. These loans that ranks second on our list of ways to buy a house with bad credit and no money down are very popular and they don’t only apply to farmland. It is mainly intended for first-time buyers who have a steady income. You won’t have to pay mortgage insurance on these loans, but an upfront fee of 2% ( which can be rolled into the loan) is necessary. To learn more visit the USDA website.
1. Navy Federal Credit Union
If you liked the previous ways to buy a house with bad credit and no money down, then you’ll like this one as well. Another great option for those who wish to buy a house but are struggling with cash is the Navy Federal Credit Union that offers full mortgage financing for members of the military of their family members. The funding fee is 1.75% which is even lower than that of the VA loans. If this got you interested, you can read more about it on their website.