3 Ways to Buy a Redlands House With No Money Down

3 Ways To Buy A Redlands House With No Money Down

The biggest barrier to homeownership for most buyers is the down payment. In these uncertain economic times, saving enough money for a down payment can seem impossible, so a huge number of potential buyers postpone (or even give up) their dream of owning their own home. If you’re in that boat, you needn’t despair, though. There are in fact ways to buy a house without a down payment. Check out these 3 ways to buy a Redlands house with no money down.

1. Zero-Down Mortgage

in order to buy a Redlands house with no money down, you will need a zero-down mortgage. This, as the name suggests, is a mortgage that doesn’t require a down payment. And that can make homeownership possible because a down payment is a significant amount of money. In fact, the down payment can be as much as 20% of the purchase price.

To get a zero-down mortgage to buy a house with no money down, you’ll have to get a government-backed loan. This type of loan is insured by the federal government, and thus the risk doesn’t rest entirely with the lender. As a result, with the federal government’s assumption of a large part of the risk, lenders are able to offer zero-down mortgages. They can expand loan criteria to borrowers with riskier financial profiles, including those who aren’t able to make a down payment.

There are two main types of loans that enable you to buy a Redlands house with no money down. These are USDA loans and VA loans. Each has its own set of qualifying criteria that you’ll have to meet in order to get a zero-down mortgage.

2. USDA Loans

USDA loans are backed by the United States Department of Agriculture (USDA). Their purpose to encourage development in rural and suburban areas. A USDA loan allows a qualified borrower to get a zero-down mortgage, and they also typically have lower fees than other types of loans.

Don’t be put off by the fact that these loans are backed by the Department of Agriculture. You don’t have to purchase a farm or a home in the hinterlands. The house you want to purchase must simply be located in a rural or suburban area, and it can’t be on a working farm. To qualify for a USDA loan, the home must be a single-family home and you have to live in it as your primary residence.

In addition, you’ll have to meet certain financial requirements to qualify. Your combined gross household income cannot be above 115% of the median income of the county where the home is located. Your debt-to-income ratio (DTI) can’t be higher than 45%, and your credit score (FICO) must be a minimum of 640 for a good shot at qualifying.

To find out if the house you’re interested in will allow you to qualify for a USDA loan, you can check out the USDA’s map of eligible areas. Or you can consult an Redlands agent by calling (951) 232-9704.

3. VA Loans

VA loans are the other government-backed loans that will allow you to buy a Redlands house with no money down. These loans are backed by the Department of Veterans Affairs and are a great option for qualifying buyers to buy a house with no money down.

To qualify for a VA loan, you must be an active duty service member, a member of the National Guard or reserves, or the qualified surviving spouse of a deceased veteran. In addition to the no-money-down requirement, VA loans offer another benefit. And that is the opportunity to pay a one-time VA funding fee of 2.3% of the loan value instead of paying for mortgage insurance.

The qualifying criteria for a VA loan are as follows, at least one which you must meet . . . 

  • 90 consecutive days of active military service during wartime
  • 181 consecutive days of military service during peacetime
  • 6+ years of service in the National Guard or Reserves or a minimum of 90 days under Title 32 orders, with at least 30 consecutive days
  • A discharge owing to a service-connected disability
  • Spouse of a military member who died in the line of duty or from a service-related disability
  • A minimum credit score of 580

Assistance Buying a House with No Money Down

So, yes, buying a house without a down payment is a real possibility with one of these zero-down mortgage options. You don’t have to wait years and years until you can save up enough money for a down payment if you can qualify for a USDA loan or a VA loan. But here’s the rub: there are some pretty strict qualifying criteria. And that’s why it’s so important for no-money-down buyers to work closely with an experienced Redlands agent. An agent can help you determine whether you can qualify and guide you through the whole complex process. So if you’re looking to buy a Redlands house with no money down, contact us today at (951) 232-9704.

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