Buying a home is one of the most significant financial moves many people will make in their lifetime. Traditionally, putting down a deposit—a lump sum of cash upfront—has been a key requirement for securing a mortgage. But for some buyers, especially first-timers or those with limited savings, that down payment hurdle can make homeownership feel out of reach.
So what does it mean to buy a house without a deposit? Simply put, it involves securing a home loan with little or no money down at closing. Rather than saving up 10%, 15%, or even 20% of the purchase price, buyers in this position use alternative strategies to either completely eliminate or creatively structure the deposit requirement to move forward with the purchase.
This route appeals for obvious reasons: affordability and access. But it often introduces other factors—such as stricter lender conditions, higher long-term costs, or more regulatory complexity. The key challenge is balancing the immediate advantage of a lower upfront cost with a clear understanding of what it might mean in the bigger financial picture. That’s why approaching the topic thoroughly and with clear awareness is both smart and necessary.
Is Buying a House Without a Deposit the Right Move?
Buying a house without a deposit can make real estate more accessible, but it’s not universally the best choice. For the right buyer—typically one with strong credit, stable income, and limited savings—it can open the door to homeownership sooner rather than later. That’s especially relevant in housing markets where rent is rising faster than mortgage costs or where saving a deposit could take years.
This option is particularly worth exploring if you’re eligible for special mortgage programs, like VA or USDA loans, which are designed to serve buyers who meet certain requirements but may not have large cash reserves. Some conventional lenders may also offer low or zero down payment options for qualified buyers, especially those purchasing their first home or with moderate income.
However, no-deposit financing often comes with trade-offs. You’ll typically face higher monthly payments, possibly pay private mortgage insurance (PMI), and start your homeownership journey with less equity. These risks don’t necessarily make it a bad idea—but they do mean it’s not a shortcut to skip reviewing the numbers carefully.
Understanding Zero-Down Financing in Practice
In practical terms, buying a house without a deposit usually involves either special loan programs or creative financing techniques. Government-backed programs like VA or USDA loans allow for 100% financing. In other cases, buyers may use down payment assistance grants or receive funds as a gift from family members or employers.
Regardless of the strategy, lenders still have to see that you’re financially ready for homeownership. That means a good credit score, manageable existing debt, and a reliable income. And because some no-deposit scenarios may raise red flags, lenders may scrutinize the rest of your application more closely. Solid documentation and clear communication can make a real difference here.
How Buying a House Without a Deposit Fits into Today’s Housing Market
In today’s housing climate, affordability challenges have made the idea of buying without a deposit more relevant than ever. Home prices have climbed in many regions, and inflation has made saving feel harder for many households. For some buyers, securing a mortgage without a deposit might be the only path to stop renting and start building equity.
The good news is that this option has more public and policy support than in previous decades. Organizations like HUD offer information on housing assistance and financing tools, and some state-level agencies promote local programs aimed at lowering the barrier to entry for first-time buyers. Lenders, too, are more familiar with structuring loans that serve unique financial profiles.
Still, it’s important to recognize that just because no-deposit options exist doesn’t mean they’re simple. Regulatory oversight, mortgage insurance structures, and broader economic factors—like interest rate movement from the Federal Reserve—all play into whether these options are available or advisable in a given window of time.
What Rising Interest Rates and Inflation Mean
When interest rates are on the rise, the financial equation around buying a home without a deposit shifts. Higher rates often increase monthly mortgage payments, which can further strain buyer budgets. Those with very limited upfront funds might find it difficult to handle both a full loan amount and increased interest costs.
That’s why many experts recommend thinking long-term when considering no-deposit financing. Even small percentage changes make big differences over the life of a loan. Tools from sites like Bankrate can help you project real-time mortgage terms and understand how costs may vary based on deposit size and borrowing amount.
How to buy a house without a deposit: A Step-by-Step Guide
Yes, it’s possible to buy a house with no deposit — but it takes strategy, persistence, and knowing which financing options truly fit your situation. This step-by-step guide will walk you through the paths available, what paperwork you’ll need, who to talk to, and what financial programs might help.
Expect this journey to involve careful planning and conversations with lenders and professionals. You’ll be balancing trust, proof of income, and creative financing — but with the right approach, you can get the keys to your new home sooner than you think.
Step 1: Review your credit and financial position
Start by analyzing your credit score, outstanding debts, and current income—because even without a deposit, lenders want reassurance that you’re financially reliable. Your credit profile will influence what types of no-deposit options you may qualify for.
Pull your credit reports from all major bureaus and look for any discrepancies or negative items you can dispute or resolve. Pay down any small debts or collections, and avoid applying for new credit in the months before mortgage applications. Solid credit is your best leverage when a cash deposit isn’t on the table.
Step 2: Understand your zero-deposit financing options
Explore the available loan types and assistance programs that don’t require upfront cash. These include government-backed options like USDA loans or VA loans, as well as special programs from credit unions, local housing agencies, or lenders offering 100% financing.
Every option comes with eligibility requirements—often tied to income level, location of the property, or employment background. Some focus on first-time buyers, while others support rural living or veterans. Educate yourself on which categories you meet so you’re not misdirected later on.
Step 3: Get pre-approved by a lender familiar with no-deposit loans
Work with a lender who specifically offers or understands zero-down mortgage options. A general pre-approval letter isn’t enough—you’ll want a tailored plan linked to a no-deposit route like USDA or VA financing.
Be ready to provide documentation including pay stubs, tax returns, credit history, and proof of consistent income. Pre-approval helps you define your price range and strengthens any offer you make, especially when you can’t compete with buyers waving large down payments.
Step 4: Look into using a guarantor or co-borrower
Consider asking a trusted friend or family member to act as a guarantor, which provides lenders with additional security for your loan even without a deposit. In some cases, a co-borrower with stronger finances can also increase your approval odds.
This route requires honest conversations and legal clarity, as the guarantor becomes responsible if you default. It isn’t for everyone, but it’s one way to offset the lack of cash and still access conventional mortgage products.
Step 5: Check if you qualify for down payment assistance or grants
Investigate programs that offer down payment grants, forgivable loans, or matched savings programs—many of which functionally eliminate the need for a personal deposit. These vary widely depending on location, income limits, and homebuyer status.
Some programs require attending a homebuyer education course, while others are tied to specific properties or neighborhoods. Be proactive about deadlines and documentation requirements, since funds are limited and often first-come, first-served.
Step 6: Explore seller or lender contributions to cover your down payment
Negotiate with the seller to include concessions or contributions that can be used toward closing costs or even the down payment. In a buyer’s market, some sellers are willing to help close the deal, especially if the offer is clean in other ways.
Lenders may also offer options like lender-paid mortgage insurance or adjusted interest rates that offset upfront costs. Be clear with your agent and lender about what’s allowed under the loan program you’re using—some place strict limits on seller contributions.
Step 7: Leverage equity from a family member or existing property
If you or someone close to you owns property with equity, it may be possible to access that value to secure your new purchase. This can function in place of a traditional deposit and strengthen your financial position in the transaction.
Talk to a loan officer about whether cross-collateralization or a gifted equity sale makes sense. It’s more complex than handing over cash, but when structured properly, it’s a viable way to sidestep saving for a down payment.
Step 8: Shop for homes within your approved financing range
Once financing is lined up, be realistic about the home price range you can pursue—especially with tighter loan parameters. Stick to properties that meet your loan criteria on location, type, and condition. For example, USDA loans have strict geographic and occupancy requirements.
Use patience here. Finding a home that fits the loan program, passes appraisal, and doesn’t require major cash reserves might take time—but it’s a critical part of avoiding surprises from lenders or inspectors later.
Step 9: Make a compelling offer that compensates for the lack of deposit
Your goal is to craft an offer that appeals to sellers, even without a typical cash down payment. This could mean offering flexibility on closing timelines, waiving minor repairs, or showing rock-solid financing backing with your paperwork.
Sellers may hesitate with zero-down buyers, so everything else must inspire confidence. A strong pre-approval, a sincere personal letter, or a willingness to cover additional fees can help you stand out against other buyers even in a competitive market.
Step 10: Prepare for closing costs and ongoing expenses
Although you may avoid a down payment, closing costs still apply—covering lender fees, title services, insurance, and more. These typically range from 2% to 5% of the purchase price, so plan to source those funds unless you secure assistance or negotiate them into the loan structure.
Also budget for initial home expenses like moving costs or necessary repairs. Owning a home always costs more upfront than people expect, so the more detail in your post-purchase budget, the smoother your transition will be.
Step 11: Review all documents before signing the final contract
Before closing day, carefully review the loan terms, repayment schedule, and contingencies in your purchase agreement. Zero-deposit financing often includes caveats or extra qualifications that traditional buyers don’t face, so double-check everything.
Ask your lender and agent to walk you through the final documents—including the closing disclosure—so you’re not surprised at the table. Your goal is full confidence in the deal you’re signing, with no hidden costs or misunderstandings.
Once you understand the key strategies for buying a house without a deposit, the next step is figuring out whether those methods suit your circumstances. It’s also worth looking at the bigger picture—how lenders approach zero-deposit buyers, how to prepare financially, and what options may be available if a no-deposit path doesn’t align perfectly with your finances or goals. Let’s unpack the details so you can proceed with confidence and clarity.
How Lenders View Zero-Deposit Buyers
Many first-time homebuyers wonder how feasible it is to secure a mortgage with no deposit, especially with lenders tightening requirements in certain markets. Traditional lenders prefer low-risk borrowers who show a history of savings and financial responsibility, typically reflected in a down payment. However, this doesn’t mean you’re out of options without one.
Lenders increasingly consider other indicators of borrower reliability, such as employment stability, income-to-debt ratio, credit score, and rental payment history. Programs designed for first-time homebuyers or those backed by government agencies often allow for minimal or zero down payments if criteria are met.
In some cases, a guarantor—like a parent agreeing to absorb liability—or the use of equity from another property can also reassure lenders. Flexibility varies by region and lender, making it crucial to explore multiple financing options or consult with a mortgage advisor who understands no-deposit pathways.
The Role of Government and Special Loan Programs
State and federal assistance programs play a major role in helping buyers purchase homes without a deposit. Programs like FHA loans (in some cases combined with down payment assistance grants), VA loans for veterans and active-duty service members, or USDA loans for rural-area buyers offer qualified applicants the chance to secure financing with little or no money down.
These programs are structured to make homeownership more accessible, especially for low- to moderate-income individuals and families. Each comes with its own set of qualifications, such as income thresholds, property location, or specific service requirements. While they can be immensely helpful, buyers should understand the fine print—such as fees, insurance premiums, or resale stipulations—to avoid surprises later on.
Choosing the right program depends on your background, household income, and long-term plans for the property. Even if you don’t initially qualify, staying informed about evolving eligibility criteria or new legislation can open future opportunities.
Considerations for Partner Financing and Shared Ownership
If traditional financing routes feel out of reach, shared equity or partner financing may provide a workaround. These arrangements involve partnering with a family member, investor, or even a co-buyer to purchase property together. You split the costs—and sometimes the eventual profits—based on the agreement terms.
This method doesn’t always require a personal deposit from you if the partner provides initial capital. However, it does require a clear and legal agreement on ownership shares, responsibilities, and exit strategies. Whether structured through formal joint mortgages or private agreements, transparency is crucial.
Shared ownership programs offered by housing authorities or private developers are another variant. In such cases, you purchase a portion of a home (often between 25–75 percent) and pay rent on the rest. Over time, you may have the opportunity to buy a larger share—or the full home—when your finances allow.
Preparing to Maximize Affordability Without a Deposit
Even if you’re confident in a zero-deposit strategy, it’s essential to prepare financially in other ways. Your credit score will carry significant weight in loan approval and interest rates, so take time to pay down debts, resolve errors, and avoid new credit inquiries if a home purchase is on the horizon.
Budgeting for closing costs, moving expenses, inspection fees, and potential immediate repairs is also smart. A no-deposit purchase isn’t necessarily a zero-cost event. Setting aside some funds—even a modest emergency cushion—can help you navigate the early months of homeownership more comfortably.
If your plan involves non-traditional strategies such as gifts, grants, or partnership deals, begin documentation early and understand what waivers, certifications, or paperwork will be required to satisfy lenders or legal parties.
Pros and Cons of how to buy a house without a deposit
Pros
The most obvious benefit is accessibility—buying a house without a deposit opens doors for individuals who may not have had the opportunity to save tens of thousands of dollars. This can be especially empowering for first-time buyers or those coping with high rental costs in urban areas.
Some government-backed loan options not only eliminate the need for a deposit but also provide favorable interest rates, support resources, and protections for buyers. This makes long-term homeownership more feasible for people with limited upfront funds.
A no-deposit home purchase allows you to secure property sooner, possibly even before local prices increase further. Acting quickly could save money in the long run, particularly in fast-appreciating housing markets.
Cons
Skipping a down payment often means paying higher interest rates or private mortgage insurance, increasing your total monthly expenses. Over the life of the loan, this can add up to significantly more than you would pay with a traditional deposit.
No equity from the start also means less financial flexibility. If property values drop, you may end up “underwater,” owing more than the home is worth. This can complicate refinancing, selling, or accessing credit lines down the road.
Additionally, buyers may face stricter income documentation requirements, capped loan limits, or limited provider options when pursuing zero-deposit routes. Not every lender offers these products, and qualifying can be more complex than it initially seems.
Alternatives to how to buy a house without a deposit
Lease-to-Own Agreements
Lease-to-own or rent-to-own agreements allow you to rent a property with the option to buy it later, often with a portion of the rent credited toward the purchase. These arrangements can create a deposit over time while locking in a purchase price early.
This option benefits buyers who need time to improve credit scores or accumulate savings but want to secure a home today. However, the structure of these agreements varies widely, so it’s important to review terms carefully and consult legal professionals before signing.
Gifted Down Payments from Family or Friends
In many loan structures, it’s acceptable to use gift funds as a down payment, provided the funds are documented correctly and meet the lender’s guidelines. This can serve as a workaround for building your own deposit from scratch.
While this isn’t the same as a no-deposit buy from a cashflow standpoint, it achieves similar results without draining your personal reserves. Ensuring a formal gift letter is completed is typically required for compliance.
Low Down Payment Loans
Some conventional loans allow down payments as low as 3% for qualified buyers. When compared to saving 10–20%, this lower threshold can offer a more attainable path to becoming a homeowner without needing to go completely zero-dollar down.
These loans are often paired with homebuyer education programs or support services, helping buyers understand responsibilities and financial expectations before and after closing.
Why beycome Is the Smartest Option for how to buy a house without a deposit
At beycome, we understand that buying a home—especially without a deposit—requires creativity, confidence, and the right tools. Our platform is built to provide those tools, letting you explore zero-deposit options while saving on costs typically embedded in the homebuying process. Whether you’re buying your first home or exploring a lease-to-own opportunity, beycome puts modern, intuitive technology at your fingertips to make it happen efficiently and affordably.
We’ve helped over 18,000 people successfully close on homes, saving buyers and sellers more than $213 million in commissions. That’s why a home is sold through beycome every 30 minutes, and why users consistently leave thousands of 5-star reviews. With resources such as the home value calculator and a modern flat fee MLS listing model, beycome gives you more control while keeping more money in your pocket.
On average, sellers on our platform save $13,185—savings that can sometimes be passed on to buyers through closing incentives or reduced purchase prices. Exploring homes via beycome can also connect you with FSBO and flexible sellers open to creative financing structures such as lease-to-own or gifted equity—all of which can support a zero-deposit pathway.
Frequently Asked Questions About how to buy a house without a deposit
Can I really buy a house with no money down?
Yes, it is possible under specific conditions. Government-backed loan programs like VA, USDA, and some FHA options allow buyers to purchase a home with zero or very low down payments, provided they meet eligibility requirements.
Do I still have to pay closing costs if I don’t have a deposit?
Yes, closing costs are separate from the down payment. These expenses—such as appraisal fees, title insurance, and legal costs—typically total 2–5% of the home’s purchase price. Some buyers negotiate with sellers to cover these, but without a deposit, it’s wise to have funds set aside.
Is it harder to qualify for a zero-deposit mortgage?
Generally, yes. Without a deposit, lenders rely heavily on other financial markers such as income stability, credit score, and debt levels. While not impossible, approval criteria may be stricter and require more documentation.
What is private mortgage insurance (PMI), and will I have to pay it?
PMI is an extra cost required by lenders when buyers don’t put down at least 20%. It protects the lender if the borrower defaults. Most buyers using low or no deposit loans will be required to pay PMI monthly until a certain equity threshold is met.
Can a family member give me money for a down payment?
Yes, many lenders allow gifted funds from family members to count toward your down payment, as long as the gift is well-documented. You’ll usually need a signed gift letter stating the money does not need to be repaid.
What if I don’t qualify for government loan programs?
If you don’t qualify, alternatives include shared ownership programs, lease-to-own arrangements, or finding lending institutions with flexible guidelines. It’s also worth working with a mortgage broker to explore other creative financing options.
Are there risks if I buy a home with no deposit?
Yes, mainly around financial flexibility and potential loan costs. Without equity up front, you may have limited refinancing options and less protection if property values fall. It’s crucial to understand your full financial picture before committing.
How can beycome help me if I don’t have a deposit?
Beycome connects you with sellers and tools that support flexible buying strategies. You can browse FSBO properties, work directly with sellers, and use our platform to facilitate transactions that might include lease-to-own or low-down-payment arrangements.
Other FSBO Resources That You May Be Interested In