First-time homebuyers may be shocked to learn of all the costs of buying a home and unprepared to pay conventional lenders’ typical 20 percent down required, in addition to all of the other fees of closing and moving into a new home, which can run into the 10s of thousands. Or the dream of homeownership may seem just beyond your grasp if your credit has suffered and you lack the cash on hand to apply towards your down payment.
There are many benefits to utilizing these options, the first of which is the ability to attain homeownership immediately. Along with this bonus is the ability to keep what money you do have on hand in savings; additionally, you begin to build equity in the home instantly.
There are many options available with a bit of investigation, so read on as we explore some of the ways you can buy a Philadelphia house without a down payment.
There are specific guidelines to using a gift to buy a Philadelphia house without a down payment, depending on the type of loan. Among these are that the contribution must be from a blood relative, spouse or domestic partner, or a fiancee with no financial interests in the closing. In addition to other documentation, the lender will require a letter that includes your signature along with your donor’s, the donor’s name, which describes their relationship to you, and states they will not require repayment of the gift. There may also be other documentation required. For down payments over $15,000, tax laws need the giver to report this gift on their taxes.
While the FHA doesn’t loan money directly, they offer programs to help buyers like you buy a Philadelphia house without a down payment or with a minimal down payment, as little as $100. In addition, your down payment can be gifted to you when using an FHA loan, meaning you will buy a home with no money down whatsoever. One requirement that will increase your monthly payments is the PMI, private mortgage insurance required on homes purchased with less than 20 percent down.
USDA Rural Housing Loans
This program provides a 90 percent loan guarantee to lenders to decrease their risk of loaning 100 percent of the home’s value. But, don’t let the name fool you; the loans are available for qualifying area housing in rural areas and the suburbs and based on the income level of your area of the country. Therefore, you must have an income below the median income level and meet specific credit score requirements, among others, to take advantage of these loans to buy a Philadelphia house without a down payment.
If you’re a veteran, you can buy a Philadelphia house without a down payment through the government-backed VA loan program, which provides insurance to lenders, such as banks, credit unions, and mortgage companies. Along with lower rates and lenient guidelines to qualify, another advantage to these loans is that there is no mortgage insurance required. When you’ve sold the home, you can apply for another VA loan; the benefit never expires. Additionally, suppose you’ve owned your home for years and paid off the VA loan. In that case, those who are eligible or their eligible surviving spouses can receive a one-time restoration of the benefit, allowing you to buy another home.
Down Payment Assistance Programs
Down payment assistance programs (DPA) grants assist homebuyers seeking to buy a Philadelphia house without a down payment. Many of these programs have income guidelines, require a good credit score, and that you haven’t owned a home in the past three years, qualifying you as a first-time homebuyer. The interest on these grants can vary from zero to high rates, and the assistance can come in several forms, grants, loans, deferred loans, or forgivable loans.
With enough equity on your existing home, you can buy another Philadelphia house without a down payment. If you don’t have the savings, this could be the solution to attain your vacation property or a second home. Or perhaps you’re interested in leveraging your equity to purchase an investment property to build an income stream and wealth for your retirement without depleting your ready cash.
There are many creative ways to buy a Philadelphia house without a down payment, and the pros at Philly Off-Market Deals have years of experience in helping buyers like you find the solutions to overcome any stumbling blocks standing in your way. Whether buying your first home or building your real estate empire, you need to complete a transaction without tying up your money; the professionals at Philly Off-Market Deals can help you explore your options with no obligation. Don’t forget to ask about our current inventory of the best properties available in Philadelphia today. Contact Philly Off-Market Deals at (215) 422-3288.