How to Buy Your First Home with Zero Downpayment

One of the hardest parts of buying a home for the first time is getting a downpayment together. It can feel harder and harder over time, the more we have to pay in rent and other increasing living expenses, the harder it is to save. It can feel exhausting, as if we are just getting close the dream of homeownership and yet it’s still so far away. 

Let me tell you a secret, you don’t have to have 20% down, and you don’t even need to use your own money to qualify. Downpayment assistance programs were made for first time homebuyers, and even if you can only afford a one bedroom condo right now, I guarantee you it will get you into a bigger home sooner, and more affordably, than continuing to pour hard earned money into rent while trying to save. 

How Do These Programs Work?

A zero downpayment loan is almost like a second mortgage, except it doesn’t accrue any interest, and it is repaid through the equity you’ve built living in your home. That means you pay it back when you refinance or sell! There is no timeline, some are even forgivable after a certain number of years living in your home.

The downpayment covers 3-5% of the home price, and the closing costs. This makes the monthly payment so much more affordable for any first time buyer. With a program like this, you can be spending the same or less on a mortgage that you are already spending on rent.

For example, with current rates as high as they are (around 7% for a typical first time buyer), if you are already spending $2,000 on rent, you could afford a $300,000 condo without changing your monthly housing costs. 

How Do You Qualify?

If you make under $180,000 a year, and you have a credit score of at least 620, you may qualify for this loan. Thats right, those are the exceptional qualifications for this specific type of loan. 

This loan allows buyers to put their own money in as well, if they want to. If you are half way to a downpayment, or you already have a percentage to put down, this loan could help you complete the picture to get into your first house now. Investing your own funds won’t disqualify you, it will just help you get a head start to buying your home!

Why Use Zero Down? 

One of the benefits of homeownership, is that the monthly cost can even decrease over time. Imagine living where you are now, but rather than your rent increasing in 5 years, you actually spend less and keep the same amazing home and location. It may sound too good to be true, but I promise it’s not. It’s just a shift in mindset, moving from a renter to a homeowner is certainly a leap, but has the highest return of any form of investing, and it offers housing security as well. 

A zero down program could make this dream a reality for you faster than saving while renting ever could. If you have any questions, or you want to see if you qualify, please don’t hesitate to get in touch and we will see what is possible for you.