Have you ever wondered if it is possible to borrow 100% of the money you need to buy a home? Many people believe that the highest possible loan-to-value (LTV) is 97%. But there are mortgages that allow you to borrow 100%. That means that you do not need to make a down payment.
To help you figure out whether you might qualify for one of these mortgage products, let’s discuss them in detail.
Obtaining 100% LTV Is It Possible?
- VA Loans. The VA loan program allows you to take out a mortgage that is backed by the US Department of Veterans Affairs. To qualify for a VA mortgage, you must be an active-duty service member, veteran, or eligible surviving spouse. There are specific duty requirements as well that you must meet to take out this type of loan. VA loans provide 100% LTV, and require no down payment. In addition, they have relaxed credit requirement, affordable rates, and no private mortgage insurance (PMI) requirement. A VA mortgage is one of the most flexible and affordable loan options out there. So, if you think you might be eligible, it is absolutely worth it to find out. Learn more about VA loans.
- USDA Loans. Another option for a mortgage that provides 100% LTV and requires no down payment is a UDSA loan. This is a type of mortgage that is guaranteed by the US Department of Agriculture. Unlike with a VA mortgage, there is no service requirement in order to qualify. There is, however, an income cut-off. If you meet that cut-off and you are purchasing your home in a rural area, then you may be able to take out a USDA loan. While the qualification requirements for USDA loans differ quite a bit from those for VA loans, the other advantages are similar. USDA loans have flexible credit requirements and affordable rates. “I’m not shopping for a home in a rural area,” you might think. “This doesn’t really apply to me.” While it is possible you are right, you might want to double-check. What the USDA defines as “rural” is not always intuitive. There are areas that qualify for USDA financing that you would never guess. Find out more about USDA mortgages.
Other Options: FHA and Conventional Loans
A lot of people qualify for VA and USDA mortgages, but obviously not everyone will qualify for either. What if you do not, but still need help with your down payment?
If you think you can afford a low down payment, you might want to apply for an FHA loan guaranteed by the Federal Housing Administration, or even a conventional loan. You will not get 100% LTV, but you can still get a high LTV.
Credit score requirements for FHA loans are pretty flexible. For a conventional loan, you will need a high credit score if you want to keep your down payment low.
Another Option: Apply for Down Payment Assistance
If you still need more help with your down payment, yet another possibility is to apply for down payment assistance.
MMS Mortgage Services can help you apply for the MI Home Loan program through the Michigan State Housing Development Authority (MSHDA).
MSHDA writes, “The MI Home Loan program is a mortgage product that is available to first-time homebuyers state-wide and repeat homebuyers in targeted areas. All homebuyers work directly with a participating lender.” Discover more about the MI Home Loan program.
We Can Help You Buy a Home Without Waiting
A down payment does not need to be a barrier to buying a home of your own. If you qualify for a VA or USDA mortgage, you can purchase a home with a mortgage product with 100% LTV and no down payment requirement. And even if you do not, you might qualify for a low down payment and/or down payment assistance.
To find out what you qualify for, please contact MMS Mortgage Services at (248) 788-0800. We can help you buy a home affordably in Michigan or 15 others states.
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