When you are ready to take the next big step of your life journey and buy a home, you might not yet be able to afford a 20% down payment.
While many prospective homebuyers believe that means they cannot purchase a home, that is simply untrue. People buy homes every day without making a 20% down payment.
If you are in this scenario, here is what you can do to proceed with your home purchase plans rather than waiting to buy a home.
4 Tips on How to Proceed If You’re Unable to Put 20% Down
- Look for ways to save up for your down payment. There are a few options for saving up toward your down payment if you still have a bit of time left:
- Check your budget to see if you can cut expenses, then set the money aside.
- Set aside any random windfalls (i.e. bonuses).
- Ask for gift money (always document it).
- Every little bit helps.
- Consider applying for a mortgage with a low down payment. There are mortgages that do not require 20% down. In fact, it might surprise you to hear this, but if you have a high credit score, you may even be able to get a low down payment with a conventional loan. Another option is an FHA mortgage. This government-backed product has easy credit qualifications and affordable rates along with a low down payment.
- Check if you qualify for a mortgage with no down payment. A couple of other government-backed loan products make it possible to buy a home without a down payment. These include VA mortgages backed by the Department of Veterans Affairs and USDA mortgages backed by the US Department of Agriculture. You may qualify for a VA loan if you are a veteran, active-duty service member or eligible surviving spouse who meets certain requirements. To qualify for a USDA loan, you must purchase a home in a rural area.
- Apply for down payment assistance. Finally, there are down payment assistance programs available in many different states and cities. Through these programs, you may be eligible for a loan to help with your down payment and closing costs.
We Can Help You Buy a Home in Missouri or Beyond
McGowan Mortgages works with many homebuyers who cannot put 20% down on a home.
We can help you figure out if you qualify for a mortgage with a low down payment or no down payment, and can point you in the direction of down payment assistance programs in your area.
To get started, please give us a call at (816) 631-9687. We can help you buy a home quickly and easily in Missouri or 30 different states.
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