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...helping to make your mortgage and home loan buying experience a better one.
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Zero down or no down payment mortgages.
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The benefits of a zero down payment mortgage are obvious;
especially to a first-time buyer or any buyer who lacks the funds to be able to make a down payment. Zero down payment mortgage loans are a relatively new innnovation in the conventional, institutional mortgage lending market.
And, these loans are NOT limited only to those borrowers
with perfect credit; but rather, borrowers with just fair credit may also qualify for a zero down payment mortgage. |
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Regardless though of a borrower's credit standing, it's
important to understand that electing a zero down payment option, if it's available, will mean paying a slightly higher starting interest rate on the loan. Borrower's may also be required to have sufficient income, which can be verified, to support the debt obligation on a zero down basis. And usually, these loans are only available on properties which will be owner-occupied when you only have fair credit. |
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It's entirely possible that a zero down payment mortgage loan
can be combined with a loan which features an interest-only option. These loans which actually offer 100% financing, usually consist of two loans... an 80% first loan and a 20% second loan. In the mortgage business, these loans are often called 80/20 combos, and the interest-only option applies to the first (80%) loan which also typically is an adjustable rate mortgage (ARM). The second loan usually features a higher rate than the first, and is a fixed rate loan. |
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To find out if you qualify for a zero down and/or interest-only
mortgage loan, click here for a fast pre-approval. |
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A zero-down loan allows a buyer to purchase a home without
committing any money as a down payment. Thus, if you buy a house for $250,000, your mortgage will be for $250,000. However, you may have to pay loan-closing costs - typically, what could amount to a couple thousand dollars for such things as title insurance and impounds.
Here's a look at the advantages and disadvantages of zero down
mortgages with interest only options... |
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ADVANTAGES:
- Lower monthly costs than almost any principal-and-interest
mortgage. Can be a good choice for people who need or want to reserve cash.
- Allows borrowers to qualify for bigger mortgages. The lender
approves your loan based on your ability to afford the monthly payment.
- Borrowers can pay up to 20 percent of their principal annually
without penalty. That's helpful to those whose income fluctuates during the year - for example, those paid on commission.
- Potentially a good choice for buyers who plan to sell or refinance
before the interest-only period ends, and their payments may go up.
- Allows a buyer with little savings but sufficient income and credit
to purchase a home. When home prices are rising, they often outstrip people's ability to save for a down payment. But by buying a home for no money down, buyers can start building equity quickly. |
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DISADVANTAGES:
- Monthly payments may rise after the interest-only period ends
and will depend on prevailing interest rates.
- May not be a good choice for borrowers who want to know
exactly what their payments will be after the initial interest-only period.
- Not a good choice for borrowers whose goal is to gain equity by
paying down their principal.
- Interest rates for zero-down loans are typically slightly higher
because of the increased risk that the borrower will default. |
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Need a fast answer to your
jumbo or super jumbo mortgage question? |
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...or E-mail us at:
info@iMortgageMatch.com
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The Mortgage Match "Buy Your Home" Express Plan.
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1. Get Preapproved.
2. Receive your Preapproval letter.
3. Find a home to buy.
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4. Fax us your purchase agreement.
5. Sign your closing docs.
6. Take title to your new property.
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Click here for a fast and free preapproval.
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In all
50 states.
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Loans in all 50 states.
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