If you are interested in buying or building a home in St. George, you will most likely find yourself applying for a home mortgage. A number of home loans in St George require that the borrower pay a down payment.
What is a mortgage down payment?
- A home mortgage down payment is a portion of the total sales price of the property you are buying.
For first time St George mortgage borrowers, the challenge is raising the 20% down payment when applying for a home mortgage. If caught in such a scenario, the quick alternative is applying for mortgage loans with low down payment.
So, how do you qualify for St. George home loan with low or no down payment? In this post, we feature a comprehensive tutorial to get a mortgage with a low down payment.
- Look into first-time homebuyer and other assistance programs
There are different home buying programs providing grants to first-time homebuyers. In some states, these grant programs are available to people who meet certain qualification threshold. Thus, if you qualify for these grants, you can take advantage of the low down mortgage for building a home. The home buying programs will help the applicants with the down payment as well as the closing costs. These home buying programs also offer the borrowers low interest rates.
Let us look into some of the homebuyer programs under which St George Home loan borrowers can qualify for mortgage loans with low down payment.
- The FHA Home Mortgage
This is a low down payment home mortgage sponsored by the Federal Housing Administration and was created in 1934. The government backed St George home loan comes with flexible requirements compared to the conventional home mortgages. The required down payment amount is just 3.5% of the home purchase price, so long as the borrower has a credit score of 580 or higher.
- The VA Loans –Zero Down Payment St George Home Loan
Reserved for the veterans, the VA loan offers 100% financing. Therefore, it is a no down payment home mortgage. Moreover, the VA home loan does not require mortgage insurance, and so saves the borrower thousands of dollars every year.
- USDA Loan
Backed by the U.S. Department of Agriculture, the USDA home loan is a no down payment option. The St George home loan was created to help the borrowers classified under low-to-moderate income families. It also comes with a mortgage insurance premium that is much lower compared to other mortgage types.
Therefore, if you are shopping for the home mortgage options that require a low down payment, the above home buying programs could be a favorable option. Make sure you read the qualification criteria for the specific program you want to borrow under.
- Wait until you have a solid employment record
Besides looking to borrow a home mortgage under either of the above home buying programs, lenders want to look at your employment status. Proof of steady employment and reliable income will assist you qualify for various mortgage loans with low down payment.
If you are in self-employment, proof of steady income from your business will help you to qualify for a home mortgage. Therefore, focus on improving the performance of your business, so that at the time of applying for a low down payment mortgage, you can show proof of steady income.
- Research what different home mortgage lenders are offering
Before you start filling a St. George home loan application form, it is fundamental that you research the rates offered by different mortgage companies. Thus, talk to friends, colleagues, family members and read widely online to find a suitable option.
This allows the borrower to narrow down to a number of options highly recommended by others. You will find that certain home mortgage lender is accepting a lower percentage compared to the others.
- Leverage on your Credit Score
At the time when the lenders are getting so hard on raising the down payment, your credit score could be the savior. Keeping your credit score in the good to exceptional range unlocks the possibilities of negotiating for a lower down payment. In that regard, learn to clear outstanding debts and bills as they fall due, and avoid excessive borrowing so that you are not listed as a defaulter.
Negotiating for a low down payment mortgage is never an easy thing to do when it comes to borrowing mortgage for building a home. However, the above trips will help you to qualify for a low down payment mortgage. Talk to your loan officer for advice on how you can take advantage of the mortgage loans with low down payment.