12 proven ways to apply for mortgage loans with a low down payment


The ever-increasing cost of new homes has made it more difficult for new buyers to raise enough down payment cash. The standard rule when applying for a conventional loan is that you have to raise a 20% down payment. Unfortunately, as the cost of homeownership keeps soaring, it is not easy raising the down payment. To arrest the situation, home mortgage lenders have come up with low down payment loans for borrowers. This means that we can say hello to the low down payment loans. However, this requires some clever tricks to make sure you qualify for the mortgage loans with a low down payment.  In this post, you will learn 12 proven strategies to apply for a home mortgage with a low down payment. Let us rock and roll!

  1. Know your credit score

When applying for a home loan, you ought to ensure that your credit score qualifies you for the mortgage. This is regardless of whether it is the conventional home loan or mortgage loans with a low down payment. Lenders consider borrowers who have shown a clean record when it comes to defaulted obligations. If applying for the St. George home loan, you should consider visiting the credit bureau to find out your current standing. If you have a very poor credit score, expect that the down payment is going to be high. A large percent of home mortgage applicants end up paying more percent as down payment because their credit score is not good. For FHA mortgage loans, the required credit score is at least 620. 

  1. Work on the debt to income ratio

If you have more debts than you can actually repay using your current earnings, do not expect to be considered for the mortgage loans with a low down payment. Your paycheck should assure the lender that you can actually repay the loan without strain. However, if the number of outstanding repayments and other debts exceeds your monthly paycheck, you do not qualify for the mortgage loans with low down payment. This is because you cannot show the ability to repay the loan. To improve the chances of qualifying for the low down payment st George home loan, work on the debt to income ratio. Therefore, clear the credit card loans and avoid taking new debt, at least while the application is being processed. 

  1. Stay at your job

Lenders approve mortgage loans with low down payment based on the information that is provided on the application form. To ensure the plans to take a home mortgage loan still hold, ensure that you do not quit the current job or take a lower-paying job. Such an act only throws a wrench in the plans, as the lender has to reevaluate your application. 

  1. Know what you can afford

Choose a home that fits comfortably with your budget, even when applying for a low down payment St George home loan. This opens up the possibility of paying a low down payment. Avoid the mistake of letting the home mortgage lender dictate how much to spend on the loan. This is likely to put you into a high down payment loan. 

  1. Choose the right mortgage

The first time home buyers might not be aware of the mortgage types that provide a low down payment option. Therefore, the first time borrower ends up applying for the conventional loan not aware of the existing low down payment mortgage for building a home. The most important factor, is applying for the right mortgage, which is the Government-backed loan. 

  1. Talk to the right St George home loan lenders 

Just as you want to purchase a property that is right for your lifestyle and budget, talking to the right lender increases the chances of qualifying for the best loan. To be assured that you are working with the right lender, ensure you have done some comparison, considering the loan products and the required down payment. The ultimate goal is choosing a home loan product that allows you to pay lower down payments. 

  1. Apply for the Government-backed mortgage

Loans insured by the Federal Housing Administration provide a better choice for borrowers interested in low down payment home loans. Therefore, talk to the financiers to find out one of the Government-backed mortgage products you can apply for. 

  1. Discuss with the lender

Even when you do not want to apply for the Government-insured mortgage loan, you still can qualify for a mortgage with a low down payment. Find out from the St George home loan lenders near you about the products that favor you when it comes to down payments. 

  1. Apply for the Fannie Mae and Freddie Mac`s 3% Down Payment option 

Most St George home mortgage companies have opened to the public the 97% loan to value program that is availed by Fannie Mae and Freddie Mac. This program allows borrowers to take advantage of a low down payment of 3% when taking a mortgage for building a home. If interested, call your preferred lender and ask about this option. 

  1. Are you a current or past member of the US army? Take the VA Loans

Now, if you are an EX military official or you currently work for the US military, the good news is that you qualify for the mortgage loans with a low down payment. The VA loans are insured by the U.S. Department of Veteran Affairs and are a better option if you meet the requirements. 

  1. Understand the mortgage market before applying

The mortgage market has become very dynamic and we see lenders changing the terms to suit the market new requirements. Thus, it is the duty of the borrower staying current with the changing trends. Seek to understand the different mortgage products before you start applying. 

  1. Do all of the above

To qualify for the mortgage loans with a low down payment, make sure you adhere to the guidelines we have laid out here. This is particularly when it comes to choosing the appropriate lenders and the loan product that suits your current requirements.