Down payments often make applying for a loan difficult. While many people afford to pay monthly mortgages, saving hundreds of dollars for mortgage payments isn’t possible for others. Fortunately, there are ways you can use to avoid hefty down payments.

Keep on reading to find the one that best fits your needs and budget.

VA or Department of Veterans Affairs Mortgages

VA or department of veteran affairs offers down payment mortgages to active members of the military and qualified veterans. In the past, VA mortgages used to be an essential part of the home buying process in the USA.

You can obtain the loan via traditional private lenders, which don't contain any mortgage insurance. However, you might have to pay some funding fees to get the VA loan. The fee amount depends on certain factors such as your service tenure, time, and regions you have served.

If you're a first-time borrower, you must pay 2 ½ percent fees. For others, it can be higher as 3.3 percent.

Navy Federal Credit Union Loans

Navy Federal Credit Union is another vital mortgage among other no-down-payment loan types. As the title suggests, the loan is for NFCU members. To meet the eligibility criteria, you must be a military member, civilian-military contractor, defense employee, spouse, or family member of the NFCU servants.

 You don't have to pay a down payment if you’re eligible or qualify for the loan. Like a VA loan, you will have to pay a funding fee that is about 1.7 percent.

USDA Loans

The popular loan type requires applicants to apply early. Its funds finish quickly due to its high demand. USDA loans do not require a down payment, and the program facilitates low-to-moderate-earning borrowers.

Another feature that makes this loan type the most sought-after is that it finances houses in USDA-designated rural locations. But it doesn't mean you can't apply for the loan if you live in a well-built area. As long as the area comes on the development map of USDA, you're eligible to apply for the loan.

However, you must have a certain income to obtain the loan. The US Department of Agriculture (USDA) backs the loan but has a funding fee. You can include it in the loan if you don't want to pay it upfront.

Private Mortgage Insurance

If you don't qualify for the above categories, you will pay a down payment to buy your dream house. But if you get PMI (private mortgage insurance), you can significantly reduce the down payment.

That means if the borrower's down payment is less than 20%, the down payment goes down to 3 percent. The cost of your home can be precisely calculated through a PMI calculator to establish the PMI net cost. Factors such as the size of your home and credit score can influence the total PMI figure.

PMI is relatively cost-effective compared to getting FHA insurance or other conventional loans. You can also cancel private mortgage insurance if you have paid approximately 80 percent of the total value of your home.

Federal Housing Administration Loans          

FHA or Federal, housing administration loans are the correct options if you're looking to save money on a home loan. Federal Housing Administration (FHA) insures this loan. The FHA loans have low down payments. It allows a credit score as low as 570 with a 3.5 percent down payment.

However, it doesn’t come without a cost. It requires FHA mortgage insurance regardless of how much down payment you make. You need to obtain FHA insurance that makes 1.75 percent of the annual cost of the mortgage amount. If you opt for 30 years mortgage, you will pay around $80,000 annually. It can significantly increase your total loan payment.

FHA requires loan applicants to clear an assessment that has comparatively stringent requirements. Despite these requirements, FHA loans offer a 3.5 percent down payment and demand flexible credit scores compared to conventional loans, making it a good option.

Though many loans come with down payments, you may find many options that have low down payment requirements and can help you buy your dream home. You can choose many programs if you don't have a large amount to put down money. Choosing one loan option can enable you to attain home ownership.

Before you decide and dive into the mortgage plan, choose a wise and experienced mortgage counsel that can help you draw a clear picture of your financial compatibility and available options.