A cell phone. When buying a new car or a house, it is common for the buyer to make a down payment to secure the purchase. However, when purchasing a cell phone, down payments are usually not required. Instead, cell phone purchases are often financed through monthly installment plans.
Final answer: A VA-guaranteed loan generally does not require a down payment, whereas other loan options like FHA-insured loans and conventional loans do require a down payment, albeit sometimes less than the traditional 20%.
The two main types of loans that don't usually require a down payment are VA loans and USDA loans.
Zero-down-payment mortgage options
Two government loans are the primary 100% financing options: VA loans and USDA-backed mortgages.
1. Use a zero-down VA loan or USDA loan. The easiest way to buy a house with no money down is to use a government-backed mortgage. VA loans are designed for veterans and active military members, and they offer the advantage of no down payment and no requirement for mortgage insurance.
With a VA Loan, no down payment is required, it is a loan guaranteed by the US Department of Veterans Affairs (VA).
You'll likely pay more interest over the life of the loan because you're borrowing more money. You may not be able to afford as much home as you could if you put money down. You'll have less equity in your home because you've put down less money.
USDA Loan for Land Purchases
The USDA offers several loan programs that can be used, particularly in rural areas. These loans often feature favorable terms, including low or no down payment requirements.
VA loans or mortgages require zero down and typically offer a favorable interest rate. 3 States also give consumers down payment assistance through a variety of programs. The United States Department of Agriculture Rural Development offers single and multi-family home loans with zero down payments.
A down payment is paid upfront in a financial transaction, such as purchasing a home or car. Buyers often take out loans to finance the remainder of the purchase price.
FHA loans require as little as 3.5 percent, and VA loans and USDA loans have no down payment requirement at all. Most homeowners don't put 20 percent down. In 2023, the median down payment among homebuyers was 15 percent, according to the National Association of Realtors (NAR).
What Credit Score Do You Need for a No Down Payment Home Loan? If you're hoping to purchase a home without a down payment, you'll have to prove a specific income and have a credit score that's at least in the mid-600 range.
The purchase that does not usually require a down payment is a cell phone. While new cars, houses, and land typically require down payments, cell phones are often acquired with payment plans that do not require an upfront cost. Thus, option D is the correct answer.
While you don't have to hand over a down payment, there are benefits to doing so. Many people turn to financing when buying a new or used car. If you don't have the total purchase amount on hand, you can use a loan to pay for your vehicle in monthly installments over time.
You cannot get an FHA loan with zero down. However, the money for your down payment doesn't have to come from your account. You may be able to fund your down payment with FHA gift funds and down payment assistance.
With VA and USDA loans, qualified borrowers can get a construction loan with 0% down. For FHA loans, the down payment could be as low as 3.5% down. Some lenders will issue traditional construction loans with 10% down.
How Do Land Loans Work? You'll typically need a down payment of at least 25% to take out a land loan. You'll need a credit score of 720 or higher to take out a land loan. You may also need to provide your lender with information about how you intend to use the land.
Major Disqualifying Factors for USDA Home Financing
Major structural and safety issues are the most common reasons why homes are disqualified from USDA home financing. These can include foundation issues, a major issue affecting the home's frame, or severe damage to walls and roofing.
How much down payment for a $300,000 house? The down payment needed for a $300,000 house can range from 3% to 20% of the purchase price, which means you'd need to save between $9,000 and $60,000. If you get a conventional loan, that is. You'll need $10,500, or 3.5% of the home price, with a FHA loan.
Conventional loans are most often but not always conforming loans, and they're considered the most common mortgage option. The minimum down payment for a conventional mortgage loan is 3% of the purchase price if you're a first-time home buyer, and it's 5% for repeat buyers.
Many conventional lenders, for instance, offer mortgages with a minimum down payment of 3% of the sale price for first-time homebuyers, and some even require no down payment at all from certain types of borrowers. It may also be worth considering government-insured mortgages.
Conventional mortgage lenders and FHA mortgage lenders forbid the use of personal loans as a down payment for a home. If you were to take out a personal to use as a down payment, you'd be on the hook for two debts — the mortgage payments and repayments for the personal loan.
Typically, a credit score of 700 or above is considered good for obtaining an auto loan with no down payment. However, the exact score can vary based on the lender and current market conditions.