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How to Buy a Home With No Money Down

  • April 6, 2023

Buying a home is a significant investment, but it can often be difficult to come up with a down payment - particularly for first-time buyers trying to understand how to buy their first home. While knowing how much of a down payment to have can help when buying a home, you don't need a large down payment to purchase a home. This step-by-step guide to help you reach your dream of homeownership and buy a home with no money down.

Understanding a No-Money Down Mortgage Loan

Before we dive into the steps, let's take a moment to understand what a no-money down mortgage loan is. As the name suggests, it is a mortgage loan that helps you to purchase a home without putting any money down. This is possible because the loan covers the entire purchase price of the home, eliminating the need for a down payment. However, these types of loans may come with higher interest rates and stricter eligibility requirements, so it's important to balance out the risks and benefits before deciding if it's right for you.

How to Buy a Home With No Money Down

Evaluate Your Financial Situation

To buy a home with no money down, it's essential to evaluate your financial situation and make improvements if necessary. Here are a few things to consider:

  • Check your credit score and improve it if necessary. For example, pay bills on time, pay down outstanding debt, and avoid new debt.
  • Identify how to increase your income . For example, you could take a second job, sell items you no longer need, or start a side hustle.
  • Develop responsible spending habits and budget accordingly. For example, track your expenses and cut back on unnecessary spending.

Research Alternative Financing Options

There are several alternative financing options available for homebuyers who don't have a large down payment. Here are a few to consider when looking for how to get a home loan:

VA Loans

VA loans are available to current or former members of the military and their families. These loans are backed by the Department of Veterans Affairs and offer many benefits to eligible borrowers. To qualify for a VA loan, you'll need a Certificate of Eligibility (COE) and meet certain service requirements. We can get your COE for you when you submit your orders or your DD-214.

USDA Loans

USDA loans are another option available to homebuyers in eligible rural areas. These loans are backed by the U.S. Department of Agriculture and offer many benefits to eligible borrowers.

FHA Loans

FHA loans are backed by the Federal Housing Administration (FHA) and are a popular option for first-time homebuyers. To qualify for an FHA loan, you'll need a credit score of at least 580 and a down payment of at least 3.5%.

There are many different types of home loans, and each loan option has its own benefits and drawbacks, so research them thoroughly and determine which one is right for you. For example, VA loans offer no down payment and no private mortgage insurance (PMI), but they may have higher interest rates.


It’s recommended you speak with a mortgage professional to understand which loan is best for you. We’d be happy to help you begin your home application with Valor Mortgage.

Find a Suitable Property

Once you've secured financing and understand how much home you can buy, it's time to find a suitable property. There are many ways you may go about finding a property that fits your needs:

  • Create a list of your must-haves and deal breakers. For example, you may need a certain number of bedrooms or a backyard for your pets.
  • Use online resources like Zillow or Redfin to search for properties that meet your criteria.
  • Attend open houses and schedule private showings to get a closer look at the homes you're interested in.
  • Conduct a thorough inspection and appraisal to ensure that the property is worth the investment.
  • Negotiate with the seller to get the best deal possible. For example, you may be able to get the seller to pay for closing costs or make repairs before closing.

Close the Deal

After you've found the right property, it's time to close the deal. Closing the deal does require a series of:

  • Submit an offer that reflects the value of the property and any repairs or upgrades that may be necessary.
  • Secure financing by providing the necessary documentation to your lender.
  • Complete the closing process by signing the necessary documents and paying any closing costs. This includes title fees, appraisal fees, and property taxes.
  • Be aware of any potential challenges or pitfalls that may arise during this process, and take steps to avoid them. For example, make sure to read and understand

Buying a home with no money down is possible if you take the right steps. By evaluating your financial situation, researching alternative financing options, finding a suitable property, and closing the deal, you can achieve your dream of homeownership without breaking the bank.

Apply with Valor Mortgage


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