Are you dreaming of owning an investment property in Texas but worried about coming up with a hefty down payment? Fear not, because there are options available that require little to no money down. At Texas United Mortgage, we’ve helped thousands of people find their dream homes -and investment properties- even when they don’t have a bunch of cash to put down!
Not everyone knows about zero-down payment mortgages. But if you’re hoping to finance an investment property in Texas with no money down, our team of experts is here to give you the important facts you need to know to proceed.
What’s a Zero-Down Payment Mortgage?
A zero-down payment mortgage is exactly what it sounds like! It’s a type of home loan that allows borrowers to finance the full purchase price of a property without having to make a down payment.
This means that the borrower can obtain 100% financing with no money out of pocket. These types of mortgages are typically available to qualified borrowers who have good credit and can demonstrate the ability to repay the loan.
Zero-down payment mortgages are often used by first-time homebuyers, but they can also be used by smart investors who are looking to purchase an investment property with no money down. It's important to note that zero-down payment mortgages may have higher interest rates and fees than traditional mortgages, so borrowers should carefully consider the costs and risks before choosing this option.
Which Loan Types Require a Down Payment?
Not every type of loan can be formatted as a zero-down mortgage. For example, some loans have specific down payment minimums. Here’s a quick breakdown of mortgage types that do and do not require a down payment:
FHA Loan - 3.5% Down
FHA loans are popular among first-time homebuyers and require a minimum down payment of 3.5% of the purchase price.
Conventional Loan - 3% Down
Conventional loans are not guaranteed by the government and typically require a down payment of at least 3% of the purchase price.
USDA Loan - 0% Down
USDA loans are designed for low-to-moderate-income borrowers in rural areas and require no down payment.
VA Loan - 0% Down
VA loans are available to eligible veterans, active-duty military personnel, and their spouses and require no down payment.
It's important to note that some lenders may require a larger down payment than what is required by the loan program. Additionally, borrowers may choose to make a larger down payment to lower their monthly mortgage payments or to avoid paying private mortgage insurance (PMI) if their down payment is less than 20% of the purchase price.
Can I Get a Down Payment Grant in Texas?
Yes, down payment assistance grants are available in Texas to help eligible borrowers with the funds needed for a down payment on a home or investment property. These grants are typically offered by state and local housing agencies, non-profit organizations, and other entities and can vary in terms of eligibility criteria, funding amounts, and repayment terms.
To be eligible for a down payment grant in Texas, borrowers typically must meet certain income requirements, be first-time homebuyers, and/or complete a homebuyer education course. Some grant programs may also require the borrower to contribute a certain amount of their own funds towards the down payment.
Use a Mortgage Lender Familiar with Texas Grant Programs
It's important to note that while down payment grants can be a helpful resource for those who need assistance with a down payment, they may come with certain restrictions and requirements. For example, some grant programs may require the borrower to live in the property as their primary residence for a certain number of years. Others may require repayment if the borrower sells the property within a certain timeframe.
If you're interested in exploring down payment grant options in Texas, it's a good idea to do your research and work with a knowledgeable mortgage lender who can help you navigate the application process and find the right program for your needs.
Can I Get Closing Cost Assistance?
Yes, once again, closing cost assistance programs are available in Texas to help eligible borrowers with the costs associated with closing on a home or investment property. These programs are typically offered by state and local housing agencies, non-profit organizations, and other entities and can vary in terms of eligibility criteria, funding amounts, and repayment terms.
Closing costs can include fees for things like appraisals, inspections, title searches, and mortgage origination. In some cases, these costs can add up to several thousand dollars, which can be a significant barrier to homeownership for many borrowers.
To be eligible for closing cost assistance in Texas, borrowers typically must meet certain income requirements, complete a homebuyer education course, and/or use an approved lender or real estate agent. Some programs may also require the borrower to contribute a certain amount of their own funds towards closing costs.
Find a Mortgage Lender for an Investment Property in Texas
Finding the right no-money-down mortgage for an investment property in Texas isn’t impossible. But it takes the right set of circumstances and a knowledgeable mortgage lender. When you work with Texas United Mortgage, you’re getting the best service in the industry.
Our team will work hard to find the best mortgage option to finance an investment property in Texas with no money down to help you achieve your dreams. Get started today!