How to Find No Deposit Home Loan
All Americans want to have a home of their own. Few are those, however, who possess the funds to buy one upfront. The majority of people are forced to pay part of their home as a deposit and secure a mortgage loan to pay off the rest of it. This is not always the case, though. There are some instances where individuals can take out a home loan that is large enough to cover the entire value of the property so they don’t have to make any down payment on it. Here is how you can find such a no deposit home loan:
1. If you work as a teacher, you can try securing a no-deposit home loan by joining a national professional organization. Some of the institutions which provide special home loans are the American Federation of Teachers and the National Education Association. You can also call your state department of education to ask if they don’t have any state-subsidized teacher loan packages. There are many states in the country which award deposit grants and other types of financial support to the educational professionals working on their territory.
Another source of funds for you may be the home loans which some banking institutions, such as Wells Fargo and Bank of America, offer exclusively to teachers.
2. The Veterans Administration offers no deposit home loan products to registered American veterans or members of their families. If you or any of your immediate relatives is a former U.S. soldier, it is well worth it calling the local VA office and inquiring whether you won’t qualify for any of their home loans. Depending on the county, the borrowing limit is between $425,000 and $1,094,000 while the Veterans Administration guarantees 25 percent of amount borrowed. To apply for a VA loan, one should go to any mortgage provider participating in the home loan program of the administration. A Certificate of Eligibility issued by VA is required. Veterans can obtain such by filling a number of forms, including the VA Form 26-1880, and sending these to the Winston-Salem Eligibility Center, together with a proof of military service. One of the advantages of VA loans is that they don’t require the purchase of the expensive Private Mortgage Insurance, which is otherwise mandatory for people who don’t pay at least 20 per cent of their home value as a deposit.
3. If you reside in a rural area, you can apply for a no deposit home loan with the United States Department of Agriculture. USDA loans are intended to encourage settlement in sparsely populated areas, which means that the property you want to purchase must comply with certain location requirements. Keep also in mind that these loans are predominantly granted to families with low and very low income, i.e. if you are financially well-to-do, you probably won’t be approved.
4. Call the Federal Housing Authority and acquaint yourself with options for no deposit home loan products it offers. The FHA has a number of loan programs designed for needy families who want to purchase their own residence. As the FHA can adjust its mortgage loan programs by including personal equity loans, it may be possible for you to buy your home without having to pay any deposit out of your pocket. To qualify for a no deposit home loan, you must have a good credit history although a high credit score is not required.