Zero down, interest only mortgages even with bad credit.

Here are a few key points covering zero down, interest only mortgages. These tend to be topics which we're asked about every day. Even though this info is covered in our FAQ section, we thought it would be convenient for visitors to Mortgage Match if these points were also covered here.

Minimum FICO scores -
Usually a midscore FICO of 580 is required to obtain a zero down, interest only mortgage. Some lenders may make exceptions, but it's up to your loan consultant to know how and where to get an exception. An exception means that a borrower may qualify for a zero down mortgage with a midscore FICO as low as 560, but no lower. The "midscore" FICO refers to that fact that mortgage lenders look at all three of your credit scores through a tri-merged credit report, and use the middle score of the three as your qualifying score. The 580 midscore will earn an approval when a borrower is able to go "full doc", or fully document their income(s) with paycheck stubs and/or W-2s... or in the case of self-employed borrowers... bank statements or income tax returns. Borrowers who for some reason can not document their income will need a higher score of 620 to get approved on a "stated" income basis... the lender does not verify the income you claim to earn.
Sometimes exceptions can be made on the midscore FICO requirement if the borrower's score is not quite there, but again, it's up to your loan consultant to know how and where to get the exception if it can be done.

How zero down, interest only mortgages are structured -
The vast majority of zero down, interest only mortgages approved are 80/20 combo mortgages which require no PMI (Private Mortgage Insurance). The 100% mortgage is split between an 80% first mortgage, and a 20% second mortgage. The 80% mortgage is usually an ARM (Adjustable Rate Mortgage) which can be based on term plans known as 2/28, 3/1, 5/1, and 7/1 to name the most popular. The number in front, like in the case of a 5/1, means the rate is fixed for the first five years of the mortgage, and is then subject to adjustment once per year thereafter. Usually, each one of these term plans differ in available interest rates. To see how these rates may vary, click here to see the most current rates for each plan. The second and smaller 20% mortgage is a fixed rate mortgage which has a rate that is determined entirely by the specific lender. There can be quite a bit of difference between lenders on what this rate might be.

The preapproval and closing times for zero down, interest only mortgages.
Preapproval for zero down, interest only mortgages can be done in 24-48 hours. Preapprovals should be free. A borrower should never pay an application fee or upfront fee for a preapproval. After the preapproval is obtained, the borrower is then well qualified to go shopping and make the purchase. After a purchase contract is signed, the next step is to have the property appraised. Final approval on the mortgage is going to be based on obtaining an adequate appraisal... which means the property should appraise for at least the purchase price or more. What usually requires the most amount of time in the mortgage approval process is obtaining the appraisal. In some real estate markets, appraisers are working as much as 2 weeks out. Obviously, a 2-week wait to get an appraisal slows down the process. Otherwise, closing a loan and funding it can be done in as little as 10 days; provided a reasonably fast appraisal is available.

Questions?
Questions about zero down, interest only mortgages such as... would one of these mortgages be good for me?... what would my payments be with one of these mortgages?... and, what are the pros and cons of these mortgages, if any?... and so on, can be most reliably answered by a loan consultant who's experienced and well-versed in zero down, interest only mortgages. You can speak directly to a Senior Loan Consultant at Mortgage Match now, who can help you with your questions, or you can click here to schedule a free consultation.

For more information on zero down, interest only mortgages, please also see...
Zero down, interest only mortgages and The Home Depot.
Interest only mortgages simplified.
Interest only mortgages... they're a good thing.
The benefits of getting preapproved for an interest only loan.
It's not that hard to get an interest only mortgage.
Why it's hard to quickly quote a rate on an interest only loan.
Zero down, interest only mortgages even with bad credit.
FAQs on interest only mortgages.