| A home is a great tax break, an unending source of pride, and the perfect way to express your individuality. But, if you’ve never bought a home before, the concept of raising a down payment can be overwhelming. Well, you can buy a home with little or nothing down—and still enjoy competitive interest rates. Here’s how: An FHA loan requires you put down just three percent of the mortgage amount. Plus, unlike many other loans, your FHA down payment, closing cost, and pre-paid fees can be covered entirely with a relative’s gift money. If you’ve served in the U.S. military, it’s likely you can qualify for a VA loan. It requires NO down payment and it has another great advantage. Most loans require you 20 percent down to avoid Private Mortgage Insurance.
With a VA loan, PMI is not required. Another option is to have a close relatives help you with your down payment, but there are some guidelines. Typically, your gift money cannot exceed ten percent of your loan amount. However, some lenders are willing to accept quite a bit more. And, depending on your income and where you want to live, you may qualify for one of many special programs which get you into a home for little or nothing down. Talk to a realtor or lender familiar with community programs to hear about those options
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