Most people think that having at least some payment set aside for a down payment is a non-negotiable for buying a home. But while having a down payment is ideal, it’s not always needed — there are loans that don’t require a down payment.
But what, exactly, are these loans? Who are they for? And are they a solid choice to finance your home purchase?
A recent article from realtor.com outlined (and answered!) FAQs on 0% down payment loans, including:
- Who is eligible for 0% down payment loans? Veterans can buy a home with zero money down through VA loans. There are also other loan programs designed to support first-time or low-income borrowers that don’t require a down payment.
- Which buyers benefit most from 0% down payment loans? These loans are ideal for people who may not have money for a down payment, but can comfortably afford the mortgage payment and costs of maintaining a house on a monthly basis.
- Who shouldn’t use these loan programs? You shouldn’t use a 0% down payment loan if you find saving challenging and/or can’t actually afford a home, as that could put you in a financially precarious situation, especially when you factor in private mortgage insurance (PMI), which increases your monthly payments.