4 Little To No Money Down Financing Options for Home Buyers in Montana

When it comes to buying a home, there’s far more things to consider than just your mortgage payment.

There’s down payments, closing costs, property taxes, HOA fees, insurance, inspections, appraisals and maintenance costs that all can add up to really affect what you can truly afford when it comes to buying a home. 

Not to mention, when you throw in the rising interest rates that the current market is facing, you might find yourself crunching some serious numbers to determine if buying a home is a smart move for you.

It might feel a little something like this:

If you can relate, one: know that you aren’t alone and two: know that you’re in the right place! 

Here at The Real Estate Collective, we understand that the world of real estate can be confusing, especially when things are changing on a daily basis, so instead of you having to calculate math equations in your head and dig through Google for answers to your burning questions, we’re here to make it easy for you!

Because at the end of the day, home ownership is a BIG deal and it’s something that everyone deserves to experience if they choose, which is why providing the education you need to make smart moves is the name of the game around here 💃🏼

So, it’s no secret that the real estate market is crazy right now. People are wondering things like:

• “Is now a good time to buy?!”

• “Should I wait it out?”

• “HOW do I even buy in this market?”

• “Do I have options for financing?”

The list goes on and if you’ve found yourself asking any of those Q’s recently, this post is for you, so let’s get into the good stuff ⬇️

First, let’s address the burning question that seems to be circling the real estate world right now and that is the question of, “is now a good time to buy?”

The truth that you might not want to hear? A “good time to buy” is relative! Every single buyer's situation is completely different, so while I can’t tell you if now is a good time to buy in general, I can confidently say that there is almost always a cost to waiting. 

So, if you think that you might be in a position that is a good time for YOU, now is absolutely the time to make a move. And even if you think it might not be the right time, the cool news for you is that you STILL have options 🥳

4 Little To No Money Down Financing Options for Home Buyers in Montana

Earlier I mentioned how there are far more things to consider when buying a home than just your mortgage payment, with your down payment being one of those things.

If you’re in a position where a mortgage payment feels doable, but you’re worried about the down payment required, there’s 5 possible options that you can take advantage of that many people aren’t aware of. 

1. VA Loans

When buying a home, the only real way to get a mortgage through most major lenders with no down payment required is to take advantage of a government-backed loan.

One of the most common loan types that are insured by the federal government are VA loans. These loans are made available to eligible veterans through the Department of Veterans Affairs and allows qualified recipients to receive a $0-down mortgage.

If you:

• are an active-duty service member

• have actively served during wartime or peacetime for a certain number of consecutive

• are a member of the National Guard or reserves or

• are a surviving spouse of a deceased veteran

You may qualify for this type of loan. Like any traditional loan, you must meet certain requirements, but if you do this is a great option to consider when it comes to home buying!

2. Conventional Loans

Because I know everyone can’t qualify for VA loans, I want to make sure you’re aware of the other options that might be a better fit for you! Another common loan option that allows for a much lower down payment are conventional loans. 

Conventional loans simply mean that the loan is not part of a specific government program, such as the Federal Housing Administration (FHA), Department of Veterans Affairs or the Department of Agriculture.

Instead, these loans are backed by private financial institutions, such as banks and credit unions, which means they are able to provide more variety in the specificities of their loans in terms of the loan interest rate and down payment.

This option is very beneficial to those with high credit scores and low debt-to-income ratios! Navy Federal is one example of a credit union offering loans of this sort and you can qualify for as low as 5% down so you feel more confident buying in this market without having to bring a huge chunk of cash to the table.

3. Montana Board of Housing Loans

If you currently live in or are planning to make the move to Montana specifically, you’ll be pleased to know that there are a few resources you can take advantage of during your home buying process!

For first time home buyers specifically, you can utilize the Regular Bond Loan Program which will provide you with a 30 year, low interest rate loan and then combine that loan with a Down Payment Assistance option provided by the Montana Board of Housing.

There are two Down Payment Assistance programs that have been created in Montana specifically to really help first time home buyers with the extra costs that come with buying a home outside of just the mortgage payment. 

So, if you know that you can afford a mortgage, but the additional costs feel spooky to you, this can be a great option!

4. USDA Rural Development Loans

Lastly, let's dig into the lesser known loan option of USDA rural development loans. These types of loans are specific to certain areas that you are looking to purchase a home in and provide benefits to those who plan to buy in rural and suburban communities, much like many of the areas in Billings, Montana specifically. 

These loans are backed by the United States Department of Agriculture and allow for as little as a $0 down payment, competitive interest rates, low monthly mortgage insurance and flexible credit requirements.

Like most loans, there are still certain eligibility requirements, but this option opens the door for many first time homebuyers and for those who are scared to buy due to high interest rates and large down payments.  

Moral of the story: you have OPTIONS, friend! And the easiest way to know which option is truly the best fit for you is to start the conversation to see what exactly you qualify for and how you can get started with the process without putting your life on hold.

That’s the name of my real estate game and I’m always here when you’re ready!