Buying a home is a primary goal for tons of people. However, the financial requirements for becoming a homeowner are one of the main things that prevent many people from pursuing their homeownership dreams. Coming up with a down payment on a home is simply too much to ask for lots of people. However, there is a loan option out there which allows people to purchase a home without putting down the money for a down payment. This loan type is known as a 100% financing loan. With a 100% financing loan, buyers are financing the entire purchase price of the home. If you are interested in a 100% financing loan, keep reading on below or contact All American Financial Services to learn more.
You might be wondering why a company would offer a 100% financing loan. Banks and loan companies want to get paid back, which is why they often require a down payment. Logically, if someone puts down a larger down payment, they are less likely to default on the loan. However, there are government sponsored programs out there that insure the lender and allow people to purchase their home without putting down the 20% down payment that is normally required.
The two main ways to obtain a 100% financing loan to purchase a home are with VA home loans and section 502 rural housing loans. These are government sponsored programs that help people get into homes if they don’t have enough money to put down the down payment on a property. Which one you go with will depend on your eligibility. The VA home loan is intended for people that have either 90 days of military service or that served in the military for at least two years. VA loans tend to have very low rates, which is great news for veterans that are looking to start a family in a new home. They are often the most affordable loans available when you compare them to the other options on the market.
If you are interested in applying for a 100% financing loan, keep in mind that it’s typically the buyer’s responsibility to come up with the closing costs. This can be an additional cost that comes as a surprise to 100% financing loan recipients. It’s important to look into all of your options for dealing with closing costs, as you can possibly receive a closing credit cost from the seller to take care of this additional expense.
We hope this article has provided you with some valuable insight into the world of 100% financing loans. Just because you can’t afford the down payment on a home doesn’t mean you can’t become a homeowner. Contact All American Financial Services today to hear more about our loan options and receive help with applying for financing. We can let you know what loans you might be qualified with and answer any question you have about our financing options.