VA Loans Offer Option of Zero Down-payment

Accumulating enough savings for a down payment, closing costs, moving costs and an extra cushion of emergency savings can be the most challenging aspect of buying a home.  VA loans provide a much needed funding stream for people who either can’t afford the usual down payment on a mortgage or for those people who want to use that nest egg for other purposes.

These days, tighter credit means almost no conventional loans are available without a down payment of at least 3-5% of the home price.  Even federally insured FHA loans require a down payment of 3.5% and high monthly PMI. That may not sound like much, but on a $200,000 home, you would need $7,000 just for the down payment.

Zero down payment mortgage loans are a very popular option.  According to VA statistics, over 90% of VA buyers skip the down payment.  Although zero down payment loans provide a great benefit, remember that if you do not make a down payment, you will lack equity in your house until you begin to pay off your mortgage or until the home rises in value.  If you have been unable to save enough for a down payment, at least make sure you have savings that can cover unexpected costs associated with home ownership.

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