Buying a home is a big deal. It’s not just about finding the right house, it’s also about getting approved for a mortgage loan that fits your needs and budget. If you have little or no money down, there are ways to get yourself into the perfect home without busting your budget! Here are 8 steps to buying a house with little or no money down:

1. Know your credit score

Your credit score is a number that represents your creditworthiness. It’s based on the information in your credit report. This can affect your ability to get a loan, so it’s important to know what it means and how to improve it.

Your FICO (Fair Isaac Corporation) score is one of the three most widely used scores by lenders. The other two are VantageScore 3.0 and Experian Scored Risk Score, which each use different algorithms for calculating their scores.

A good FICO score will be about 700 or higher; anything below 660 could cause problems when lenders run background checks on you before approving loans for financing home purchases or refinancing existing mortgages

2. Look into a VA loan

The second step is to look at a VA loan. There are two types of VA loans:

  • VA loans are guaranteed by the government and have no down payment requirements, prepayment penalties, or mortgage insurance requirements.
  • FHA (Federal Housing Administration) loans, which require at least a 3.5% down payment on home purchases with less than $100K mortgage amount, but do not need to be insured by the FHA or other agencies such as Ginnie Mae or Freddie Mac-like conventional mortgages do.

3. Consider an FHA loan

The Federal Housing Administration (FHA) is a government agency that insures home loans and provides financial assistance to qualified borrowers. Not only does this mean that you won’t be responsible for paying the difference between your down payment and the amount of your mortgage, but it also means that you can qualify for a lower interest rate than other types of mortgages.

The FHA loan has three main requirements:

  • You must show proof that at least 3% of your income will go toward housing costs each month.
  • You must be able to document any credit issues or bankruptcy history within three years before applying for a loan

4. Find a lender that works with low- or no-down-payment mortgages

You may think that you have no chance of finding a lender who will work with a low- or no-down-payment mortgage. The reality is that there are lenders out there who will accommodate your needs, and they’re more common than you think.

What types of lenders do these loans?

Mortgage bankers: These folks lend money to others so they can purchase homes themselves; their services include funding loans, negotiating terms and conditions on behalf of homeowners (such as interest rates), collecting payments from borrowers every month or quarter (depending on the type of loan), as well as processing title insurance or escrow accounts if needed.

5. Look into state and local programs

If you’re looking to purchase a home, it’s important to know how much you can afford. It may help to get pre-approved for a loan or talk with your real estate agent about what programs are available in your area.

  • You can take advantage of programs that help with down payments, closing costs, and mortgage insurance.
  • Look into property taxes: Homeowners in some states pay a lower rate than renters or buyers who purchase their homes through an apartment complex.

6. Determine how much home you can afford

  • Determine how much home you can afford

Now that you know what kind of house and neighborhood you want, it’s time to figure out how much home you can actually afford. There are a lot of factors that go into this calculation, so we’ll tackle each one individually:

  • Income: Your monthly income is not only an indicator of your financial stability but also useful in determining if renting or buying makes more sense for your situation. If possible, take stock of all sources (including salary increases) before making this decision as well.
  • Expenses: This includes things like rent or mortgage payments along with utilities and transportation costs—everything else! Make sure these numbers aren’t too far off from your actual situation so there isn’t any room for error later on when trying to qualify for loans/mortgages/etcetera later on down the line (more on this below).

7. Set the right time frame for buying a home

You’ll want to set a timeframe for buying a home. This can help you stay in control, and prevent you from rushing into a purchase before it’s necessary. If you’re ready to move into an apartment or condo, but aren’t sure which one is best for your needs and lifestyle, then consider waiting until after the holidays. This will enable you to make any big decisions about where to live next year.

If there is a house that intrigues me enough and I think it would be perfect for my family, then we will look at renting it out. This will enable us to decide if it’s worth buying one day down the road when our finances are stronger than they currently are right now!

8. Talk to your real estate agent about down payment sources

The next step is to talk with your real estate agent about down payment sources. This can be a little tricky because it’s important to know how much money your lender will want you to put down on the purchase price of the house. If they require more than 20%, then that means they are willing to finance most of their loan out of pocket and only require a small percentage from you as a “down payment” (the rest goes toward closing costs). If they require less than 20%, then this means that the seller will have some equity in their home at closing time, which means less money for you upfront—but there may also be additional fees or penalties associated with buying a home with less cash down than what was originally requested!

The best way around this issue is through negotiation between buyer and seller; however, if all else fails there are still ways around it:

  • Find out how much each side thinks should go towards making payments over time before settling on an amount outright.
  • Negotiate terms where both parties agree upon what percentage amount will go toward each obligation–and then work backward from there.
  • Ask yourself whether any extra funds would make sense since this method could help save them some money over time when compared/compared against other options such as renting versus buying outright without any financial assistance whatsoever!


Buying a home with little or no money is possible, but it takes a lot of work. Make sure to do your research and be prepared for the challenges that come with doing so. If you’re willing to put in the time and effort, then this could be the best option for you.

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