10 Down Mortgage Loans for Homebuyers

For homebuyers, getting a 10 down mortgage loan can be a game-changer. It's a great option for those who can't afford a 20% down payment but still want to avoid paying private mortgage insurance (PMI).

With a 10 down mortgage loan, you can qualify for a lower interest rate and lower monthly payments compared to a loan with a lower down payment. This can save you thousands of dollars in interest over the life of the loan.

A 10 down mortgage loan is also a good option for first-time homebuyers who may not have a lot of savings for a down payment.

A 10 down mortgage loan is a type of conventional loan that allows you to put 10% down on a home purchase. This means you finance the home purchase with a single loan equal to 90% of the purchase price.

With a 10% down conventional loan, you'll require private mortgage insurance (PMI), but the PMI cost is much lower compared to putting 3-5% down. Your mortgage rate could also be lower.

The 10% down conventional loan has no income limits, and you don't have to be a first-time buyer. This makes it a popular option for many homebuyers.

Here are some key benefits of a 10 down mortgage loan:

Keep in mind that you'll still need to provide in-depth income, employment, credit, asset, and debt documentation for approval, as is typical for conventional loans.

Making a larger down payment on a 10 down mortgage loan can have several benefits. It can lead to a better mortgage interest rate, which can save you money over the life of the loan. A larger down payment also gives you more equity in your home right away, which can be a valuable asset.

With a larger down payment, you'll also have a lower monthly mortgage payment, as you'll be borrowing less of the home's price. This can be a significant advantage, especially if you're on a tight budget. Additionally, you may be able to avoid some of the upfront and ongoing fees associated with low- or no-down-payment government-backed mortgage programs.

Here are some key benefits of making a larger down payment:

The Homebuyers Choice Loan offers several features that make it an attractive option for homebuyers. With a fixed interest rate, your monthly payment to principal and interest will remain the same for the life of your loan.

One of the benefits of this loan is that it doesn't require Private Mortgage Insurance (PMI) unless you put down less than 20%. This can save you a significant amount of money each month.

If you're concerned about interest rates dropping in the future, you'll be happy to know that this loan offers a no-refi rate drop. This means you can lower your rate without refinancing for a one-time $250 fee.

Here are some key features of the Homebuyers Choice Loan:

Physician mortgage loans offer several advantages, including no private mortgage insurance (PMI) required with a down payment as low as 0-10%. You can also get 90-100% financing, depending on property location, credit score, and loan amount.

These loans have higher loan limits than conventional mortgages, typically allowing for loan amounts of up to $1 million with 95-100% financing, and up to $2 million with 90% financing.

Special treatment of student loans is another benefit, allowing you to still buy a house even with hundreds of thousands of dollars in student loan debt.

You can close on your home before you begin working, with some lenders allowing you to qualify for a mortgage loan even 30-90 days before starting employment.

However, using physician mortgage loans comes with some disadvantages. For one, it may not be the best idea to rush into buying a house without saving up a real down payment.

You may end up buying more house than you should, just because you can borrow the money. And if you already have a lot of debt, adding more to that burden may not be the best decision.

Here are some specific reasons to consider carefully:

Low and no down payment mortgages can be a good idea, especially in today's housing market where prices are skyrocketing.

Saving for a 20% down payment can take decades, and home prices are rising faster than ever before. You can't save fast enough to keep up, and rent is also increasing.

These 100% financing home loans allow you to shortcut the saving process and buy a home now, as long as you have decent credit and prove yourself financially responsible.

With a zero-down loan, you start to benefit from home appreciation rather than being penalized by it. For example, if you buy a $300,000 home with a zero-down loan and it appreciates by 3% per year, you'll have over $64,000 in net increased wealth after five years, even after subtracting PMI costs.

Here's a breakdown of the benefits of low and no down payment mortgages:

Overall, low and no down payment mortgages can be a good idea for those who are ready to buy a home now and don't have the savings for a 20% down payment.

Conventional loans require a minimum down payment of 3%.

For FHA loans, the minimum down payment required is 3.5% with a credit score of at least 580, but it increases to 10% for credit scores between 500 and 579.

The minimum down payment requirements for VA and USDA loans are both 0%.

If you're planning to buy a house, you'll need to meet certain minimum requirements.

The type of mortgage you choose affects the minimum down payment required.

For conventional loans, the minimum down payment is 3%.

FHA loans require a 3.5% down payment if you have a credit score of at least 580. With a credit score of 500-579, the minimum down payment increases to 10%.

VA and USDA loans are a bit more lenient, with 0% down payment required for both.

Jumbo loans, on the other hand, require a minimum down payment of 5-10%.

Keep in mind that these requirements can vary depending on the type of loan and your individual circumstances.

Qualifying for a Doctor Mortgage is a bit more complex than other types of loans. Student loans can impact your ability to qualify, but some programs offer special treatment.

Income Dependent Repayment (IDR) programs, such as IBR, PAYE, and REPAYE, get special consideration. Mortgage underwriters will allow the lower income-driven repayment, rather than defaulting to a fully amortizing payment.

Deferred student loans can also be excluded from consideration, as long as they've been deferred for at least 12 months from the date of closing. This can make it easier to qualify for a doctor mortgage.

The HomeReady program is a great option for those who need a low down payment mortgage. It only requires 3% down, which can come from a family member or eligible down payment assistance program.

Qualifying for HomeReady may be easier than with other loans, as it allows you to count income from a household member as a compensating factor, even if they're not on the loan. This can be a game-changer for people who have a roommate or family member contributing to their income.

You can even count your roommate's rent payments as future income if they've been paying rent for at least 9 of the last 12 months and plan to live with you in the new home. For example, if your roommate paid $300 per month in rent, you can add $300 to your existing income to help you qualify.

Fannie Mae HomeReady is a mortgage program that allows for a 3% down payment, which can come from a family member or eligible down payment assistance program.

Qualifying for a HomeReady loan may be easier than with other loans, as it allows you to count income from a household member as a compensating factor, even if they are not on the loan.

You can also count the rent your roommate has paid towards your qualifying income, as long as it's documentable by canceled checks or bank transfers, and doesn't exceed 30% of your qualifying income.

For example, if your roommate has paid $300 towards the rent for each of the last 12 months, you can add $300 per month to your existing income to help you qualify.

Your income must be at or below 80% of your area's median income to qualify for a HomeReady loan.

If median income is $80,000 per year, you must make $64,000 or less to qualify.

Home Possible is a 3% down program that allows you to use gift funds for the entire down payment. This means you could become a homeowner with little or no money out of pocket.

You can use roommate income to qualify under certain conditions, similar to the HomeReady program. If your roommate has paid rent for at least 9 of the last 12 months, you can count that as future income.

Sweat equity can also be used toward your down payment with Home Possible. This means you can put DIY work into a home in lieu of making a down payment. The appraiser will estimate the value of labor, or the lender may use another cost estimating service.

The value of labor plus materials must add up to 3% of the home price to cover your entire down payment. This can be a great option if you're handy and willing to put in the work.

Home Possible is not a loan type itself, but an assistance program that can be combined with other Freddie Mac programs, such as Home Possible or HomeOne.

The 80/20 and 80/10/10 Loans are back in action, and they're worth considering if you want to put less than 20% down without mortgage insurance.

These loans have been around since the 80s, but they disappeared after the 2008 Global Financial Crisis. They're making a comeback, and they work by getting an 80% loan at a slightly higher rate than a 20% down loan.

The 80/10/10 loan structure is a variation of this theme, with a down payment required. The idea is to avoid PMI by replacing it with more interest.

You can get away with less than 20% down with these loans, but be aware that rates are likely higher on the smaller second mortgage.

The 80-10-10 piggyback loan structure is as follows:

This structure can be a bit of a juggling act, as you need to coordinate with the second mortgage lender and inform them of the exact closing date.

If you're not sold on a traditional 10 down mortgage loan, you're in luck because there are plenty of alternatives available. You can usually get most of these options from the same lenders who offer physician mortgage loans.

One alternative is a conventional loan, which has its own set of benefits and drawbacks. Conventional loans typically require a 20% down payment, but some lenders may offer lower down payment options or more flexible credit requirements.

If you're a doctor, you may also want to consider alternatives to physician mortgage loans, which can provide more competitive interest rates and terms.

You can use a physician loan as many times as you want, but each bank has its own rules, and some may stop offering loans to doctors more than 10 years out from school or residency.

Physician loans can be used multiple times, even on different homes, but they're typically only offered on owner-occupied properties, not investment properties.

Some lenders may allow you to have more than one physician loan at a time, which can be helpful if you're moving to a new home.

You can tap into personal accounts such as savings and checking accounts to fund closing costs. These accounts can provide a quick and easily accessible source of funds.

You can also liquidate assets, such as a high-value vehicle, to invest in an appreciating asset like a home. This can be a good option if you have an asset that's not being used.

Closing costs can range from 1-5% of the home's price, and include expenses such as title insurance, escrow, and appraisal. These costs can add up quickly, so it's essential to factor them into your budget.

Prepaid items, such as 6-12 months worth of property taxes and homeowners insurance, are also required by lenders. This can be a significant expense, ranging from $3,000-$5,000.

Here are some ways to cover closing costs:

You can get down payment assistance from the government, which can be a game-changer for first-time homebuyers. Nearly every city, state, and county offers some sort of homebuying assistance, which can be used for down payment and/or closing costs.

Government programs can cover your down payment, closing costs, or both. You can find these programs by Googling "down payment and closing cost assistance in [city] [state] or [county]". Many programs have income limits and assistance maximums, but they can be a great option for those who qualify.

Some popular government programs include the Good Neighbor Next Door program, which offers homes at 50% of list price for certain professions, and the USDA home loan, which offers zero-down mortgages for homes in rural and suburban areas.

FHA loans can be a great option for borrowers with lower credit scores and limited savings for a down payment. You can qualify for an FHA loan with a 580 credit score and a minimum 3.5% down payment. The FHA loan limit in most U.S. counties is set at $420,680 for single-family homes, while high-cost areas have a limit of $970,800.

Mortgage insurance premiums are mandatory for most FHA borrowers, and you'll pay them for the life of your loan unless you refinance into a conventional loan after building at least 20% equity. However, if you put down at least 10%, you'll only pay premiums for 11 years.

FHA loans have some great benefits, including being available to first-time and repeat buyers, with no income limits and easier qualification than conventional loans. On the other hand, you must live in the property, even if you rent out other units, and loan limits are lower than some conventional loans.

Here are some key pros and cons of FHA loans:

Ideal for borrowers with lower credit scores and limited savings for a down payment, FHA loans can help you get into a home sooner.

The USDA offers a zero-down loan option for homebuyers who want to purchase a home in a rural area. This loan is a great option for those who don't have a lot of money saved up for a down payment.

To qualify for a USDA loan, you must purchase a home in a designated rural area. You can check if your area is eligible by visiting the USDA's property eligibility map.

One of the best things about USDA loans is that they don't require a down payment or mortgage insurance. This can save you a lot of money upfront.

However, there are some limitations to USDA loans. The home must be your primary residence, and there are income limits to qualify. In some areas, the property must also meet certain size and amenity requirements.

Here are the key benefits and drawbacks of USDA loans:

The Good Neighbor Program is a fantastic option for those in the right profession. It offers homes at 50% of list price for teachers, firefighters, EMTs, and law enforcement officers who are employed full-time and meet other requirements.

To qualify, you'll need to live in the home for at least three years, as per HUD's website. The program is a great way to make homeownership more accessible to those who serve their communities.

If you use an FHA loan to purchase the property, you may be able to put down just $100. This is a huge advantage, especially for those who might not have saved up for a traditional down payment.

Here's a quick rundown of the eligible professions:

Keep in mind that the Good Neighbor Program is just one of the many government assistance and incentives available to homebuyers.

Government Assistance is a game-changer for homebuyers. It can help you cover down payments and closing costs, making it possible to buy a home with little to no money out of pocket.

You can tap into down payment assistance programs in your area, which can cover your down payment, closing costs, or both. Nearly every city, county, and state in the U.S. has some sort of program, so it's worth doing some research to see what's available in your area.

FHA loans are a great option for those who need down payment assistance. In fact, about 40% of all FHA homebuyers use some kind of down payment assistance. With an FHA loan, you can use a financial gift from family, an employer, or a down payment assistance provider to cover the entire 3.5% down payment.

USDA loans are another option for those who want to buy a home in a rural area. These loans don't require a down payment or mortgage insurance, but there are income limitations. The USDA also has a zero-down home loan program that's available to low- and moderate-income buyers.

Here are some government assistance programs you might be eligible for:

Government assistance programs can be a huge help when it comes to buying a home. By exploring these options, you might be able to buy a home with little to no money out of pocket.

You'll need to consider your financial situation and goals when deciding on a 10% down mortgage loan. The right down payment for you depends on your goals and financial situation.

Conventional mortgages usually require private mortgage insurance (PMI) if you put down less than 20%. This means you'll have to pay for PMI, but the cost is lower if you put 10% down compared to 3-5% down.

To calculate how much house you can afford, run the numbers to see what kind of mortgage you'd qualify for. For example, a doctor with a $400,000 annual pre-tax income could have a mortgage of up to $800,000 with a 20% down payment.

Using the 2X rule of thumb, our doctor could have a mortgage of up to $800,000, which would equal a $1 million house with a 20% down payment. If you're in a high-cost area, you may need to stretch this rule to 3-4X gross income, but be aware that you'll need to make up for it elsewhere in your financial life.

Here's a rough estimate of the costs associated with a 10% down mortgage loan:

Keep in mind that these are just estimates, and your specific situation may vary. It's essential to carefully consider your financial situation and goals before deciding on a 10% down mortgage loan.