You Should Explore Your 100% Home Financing Options

In the recent years, more and more millennials are coming of age. Their generation is transitioning into adulthood. That being said, they now are the largest generation to make up the housing market.

35 percent of America’s young adults now live in their own residential properties. Millennials who have not purchased their first homes yet are planning to buy one within the next five years.

Despite facing huge financing and economic challenges, this generation represents the biggest chunk of homebuyers.

It cannot be denied that it is a struggle to save for a down payment. Many millennials still point out down payments as one of their biggest hurdles in homeownership.

They are just entering the workforce and building their assets. Yet, they already have a load of debts to pay in the form of student loans. what is left from their income may not be enough to save for a down.

The Challenge of Saving for a Down Payment

Millennials are just a few of the many who struggle to come up with a down payment to purchase a house. A lot of people from across different generations have this problem.

One study cited that down payment is one of the leading causes of homeownership apprehension.

To many homebuyers, the 20 percent down is just too big of an amount. Either they will have to exhaust their income to come up with this money, or it will take them years to save up for that 20 percent.

Add to that, many borrowers think that the 20 percent is mandatory when taking a loan which is not entirely true.

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Addressing the Issue

In an attempt to improve the-the homeownership rate, numerous lenders and institutions have designed home financing programs that offer 100 percent financing to target specific homebuyers.

When you hear about “100% financing,” you immediately think, “high-interest rate”. This is not necessarily true. In fact, if you have good credit, you may still take a conventional loan with an average interest rate.

Most of these programs target these borrowers:

  • First-time home buyers
  • Buyers with limited resources and funding
  • Young adults entering the workforce, building up their assets

 

Exploring 100% Home Financing Options

Now that you know that 100% home financing programs are out there just waiting for you, let’s take a look at some of the popular ones in the market today. This can be a good place to start shopping for the right home loan.

USDA HOME LOAN

The USDA provides 100% home financing to qualified home buyers or owners of eligible rural houses.  What you have to worry about it that it comes with a funding fee payable monthly. This ensures the program’s availability for posterity. Because the funding fee is just minimal, the USDA home loan remains to be affordable. It is known to have lenient credit qualifications and less stringent income requirements.

VA HOME LOAN

Eligible military veterans may take a VA home loan with offers 100 percent financing. This loan is guaranteed by the Veterans Affairs and funded by private lending companies and banks. The loan has a zero down payment option. The same as the USDA home loan, it also requires the borrower to pay a funding fee. Together with other factors, the amount of down (or the lack thereof) will determine the amount of funding fee the borrower needs to pay.

There are also private lenders who offer 100% home financing. They may have their own qualifications and requirements for borrowers to meet. Since each lender has varied requirements, it is best to shop for lenders until you find one that is right for you.

 

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